• How to Kill Goyim and Influence People: Israeli Rabbis Defend Book’s Shocking Religious Defense of Killing Non-Jews (with Video)

    Posted on September 4th, 2010 Chris No comments
    A rabbinical guidebook for killing non-Jews has sparked an uproar in Israel and exposed the power a bunch of genocidal theocrats wield over the government.

    When I went into the Jewish religious book emporium, Pomeranz, in central Jerusalem to inquire about the availability of a book called Torat Ha’Melech, or the King’s Torah, a commotion immediately ensued. “Are you sure you want it?” the owner, M. Pomeranz, asked me half-jokingly. “The Shabak [Israel's internal security service] is going to want a word with you if you do.” As customers stopped browsing and began to stare in my direction, Pomeranz pointed to a security camera affixed to a wall. “See that?” he told me. “It goes straight to the Shabak!”

    As soon as it was published late last year,Torat Ha’Melech sparked a national uproar. The controversy began when an Israeli tabloid panned the book’s contents as “230 pages on the laws concerning the killing of non-Jews, a kind of guidebook for anyone who ponders the question of if and when it is permissible to take the life of a non-Jew.” According to the book’s author, Rabbi Yitzhak Shapira, “Non-Jews are “uncompassionate by nature” and should be killed in order to “curb their evil inclinations.” “If we kill a gentile who has has violated one of the seven commandments… there is nothing wrong with the murder,” Shapira insisted. Citing Jewish law as his source (or at least a very selective interpretation of it) he declared: “There is justification for killing babies if it is clear that they will grow up to harm us, and in such a situation they may be harmed deliberately, and not only during combat with adults.”

    In January, Shapira was briefly detained by the Israeli police, while two leading rabbis who endorsed the book, Dov Lior and Yaakov Yosef, were summoned to interrogations by the Shabak. However, the rabbis refused to appear at the interrogations, essentially thumbing their noses at the state and its laws. And the government did nothing. The episode raised grave questions about the willingness of the Israeli government to confront the ferociously racist swathe of the country’s rabbinate. “Something like this has never happened before, even though it seems as if everything possible has already happened,” Israeli commentator Yossi Sarid remarked with astonishment. “Two rabbis [were] summoned to a police investigation, and announc[ed] that they will not go. Even settlers are kind enough to turn up.”

    In response to the rabbis’ public rebuke of the state’s legal system, the Israeli Attorney General and Prime Minister Benjamin Netanyahu kept silent. Indeed, since the publication of Torat Ha’Melech, Netanyahu has strenuously avoided criticizing its contents or the author’s leading supporters. Like so many prime ministers before him, he has been cowed into submission by Israel’s religious nationalist community. But Netanyahu appears to be particularly impotent. His weakness stems from the fact that the religious nationalist right figures prominently in his governing coalition and comprises a substantial portion of his political base. For Netanyahu, a confrontation with the rabid rabbis could amount to political suicide, or could force him into an alliance with centrist forces who do not share his commitment to the settlement enterprise in the West Bank.

    On August 18, a pantheon of Israel’s top fundamentalist rabbis flaunted their political power during an ad hoc congress they convened at Jerusalem’s Ramada Renaissance hotel. Before an audience of 250 supporters including the far-right Israeli Knesset member Michael Ben-Ari, the rabbis declared in the name of the Holy Torah that would not submit to any attempt by the government to regulate their political activities — even and especially if those activities included inciting terrorist attacks against non-Jews. As one wizened rabbi after another rose up to inveigh against the government’s investigation of Torat Ha’Melech until his voice grew hoarse, the gathering degenerated into calls for murdering not just non-Jews, but secular Jews as well.

    “The obligation to sacrifice your life is above all others when fighting those who wish to destroy the authority of the Torah,” bellowed Rabbi Yehoshua Shapira, head of the yeshiva in the Tel Aviv suburb of Ramat Gan. “It is not only true against non-Jews who are trying to destroy it but against Jewish people from any side.”

    The government-funded terror academy

    The disturbing philosophy expressed in Torat Ha’Melech emerged from the fevered atmosphere of a settlement called Yitzhar located in the northern West Bank near the Palestinian city of Nablus. Shapira leads the settlement’s Od Yosef Chai yeshiva, holding sway over a small army of fanatics who are eager to lash out at the Palestinians tending to their crops and livestock in the valleys below them. One of Shapira’s followers, an American immigrant named Jack Teitel, has confessed to murdering two innocent Palestinians and attempting to the kill the liberal Israeli historian Ze’ev Sternhell with a mail bomb. Teitel is suspected of many more murders, including an attack on a Tel Aviv gay community center.

    Despite its apparent role as a terror training institute, Od Yosef Chai has raked in nearly fifty thousand dollars from the Israeli Ministry of Social Affairs since 2007, while the Ministry of Education has pumped over 250 thousand dollars into the yeshiva’s coffers between 2006 and 2007. The yeshiva has also benefited handsomely from donations from a tax-exempt American non-profit called the Central Fund of Israel. Located inside the Marcus Brothers Textiles store in midtown Manhattan, the Central Fund transferred at least thirty thousand to Od Yosef Chai between 2007 and 2008.

    Though he does not name “the enemy” in the pages of his book, Shapira’s longstanding connection to terrorist attacks against Palestinian civilians exposes the true identity of his targets. In 2006, Shapira was briefly held by Israeli police for urging his supporters to murder all Palestinians over the age of 13. Two years later, according to the Israeli daily Haaretz, he signed a rabbinical letter in support of Israeli Jews who had brutally assaulted two Arab youths on the country’s Holocaust Remembrance Day. That same year, Shapira was arrested under suspicion that he helped orchestrate a rocket attack against a Palestinian village near Nablus. Though he was released, Shapira’s name arose in connection with another act of terror, when in January, the Israeli police raided his settlement seeking the vandals who set fire to a nearby mosque. After arresting ten settlers, the Shabak held five of Shapira’s confederates under suspicion of arson.

    Friends in high places

    Despite his longstanding involvement in terrorism, or perhaps because of it, Shapira counts Israel’s leading fundamentalist rabbis among his supporters. His most well-known backer is Dov Lior the leader of the Shavei-Hevron yeshiva at Kiryat Arba, a radical Jewish settlement near the occupied Palestinian city of Hebron and a hotbed of Jewish terrorism. Lior has vigorously endorsed Torat Ha’Melech, calling it “very relevant, especially in this time.”

    Lior’s enthusiasm for Shapira’s tract stems from his own eliminationist attitude toward non-Jews. For example, while Lior served as the IDF’s top rabbi, he instructed soldiers: “There is no such thing as civilians in wartime… A thousand non-Jewish lives are not worth a Jew’s fingernail!” Indeed, there are only a few non-Jews whose lives Lior would demand to be spared. They are captured Palestinian militants who, as he once suggested, could be used as subjects for live human medical experiments.

    Otherwise, Lior appears content to watch Palestinians perish as they did at the muzzle of Dr. Baruch Goldstein’s machine gun in 1994. Goldstein, who massacred 29 Palestinians and wounded 150 in a shooting spree while they prayed in Hebron’s Cave of the Patriarchs mosque, was a compatriot and neighbor of Lior in the settlement of Kiryat Arba. At Goldstein’s funeral, Lior celebrated the massacre as an act carried out “to sanctify the holy name of God.” He then extolled Goldstein as “a righteous man.” Thanks to Lior’s efforts, a shrine to Goldstein was constructed in center of Kiryat Arba so that locals could celebrate the killer’s deeds and pass his legacy down to future generations.

    Though Lior’s inflammatory statements resulted in his being barred from running for election to the Supreme Rabbinical Council, according to journalist Daniel Estrin, the rabbi remains “a respected figure among many mainstream ZIonists.” By extension, he maintains considerable influence among religious elements in the IDF. In 2008, when the IDF’s chief rabbi, Brigadier General Avichai Ronski, brought a group of military intelligence officers to Hebron for a special tour, he concluded the day with a private meeting with Lior, who was allowed to revel the officers with his views on modern warfare — “no such thing as civilians in wartime.”

    Besides Lior, Torat Ha’Melech has earned support from another nationally prominent fundamentalist rabbi: Yaakov Yosef. Yosef is the leader of the Hazon Yaakov Yeshiva in Jerusalem and a former member of Knesset. Perhaps more significantly, he is the son of Ovadiah Yosef, the former chief rabbi of Israel and spiritual leader of the Shas Party that forms a key segment of Netanyahu’s governing coalition.

    Yaakov Yosef has brought his influence to bear in defense of Torat Ha’Melech, insisting at the August 18 convention in Jerusalem that the book was no different than the Hagadah that all Jews read from on the holiday of Passover. The Hagadah contains passages about killing non-Jews and so does the Bible, Yosef reminded his audience. “Does anyone want to change the Bible?” he asked.

    Bibi buckles

    Only days before direct negotiations in Washington between Israel and the Palestinian Authority planned for early September, Yaakov Yosef’s 89-year-old father, Ovadiah delivered his weekly sermon. With characteristic vitriol, he  declared: “All these evil people should perish from this world… God should strike them with a plague, them and these Palestinians.”

    The remarks have sparked an international furor and earned a stern rebuke from Palestinian negotiator Saeb Erekat. “While the PLO is ready to resume negotiations in seriousness and good faith,” Erekat remarked, “a member of the Israeli government is calling for our destruction.”

    Palestinian Israeli member of Knesset Jamal Zehalka subsequently demanded that the Israeli Attorney General Yehuda Weinstein put Yosef on trial for incitement. “If, heaven forbid, a Muslim spiritual leader were to make anti-Jewish comments of this sort,” Zehalka said, “he would be arrested immediately.”

    Here was a perfect opportunity for Netanyahu to demonstrate sincerity about negotiations by  shedding an extremist ally in the name of securing peace. All he had to do was forcefully reject Yosef’s genocidal comments — a feat made all the easier by the White House’s condemnation of the rabbi. But the Israeli Prime Minister ducked for political cover instead, issuing a canned statement instead of a condemnation. “Rabbi Ovadiah Yosef’s remarks do not reflect Netanyahu’s views,” the statement read, “nor do they reflect the position of the Israeli government.”

    By refusing to cut Yosef loose, his party remains a central actor in the Israeli government. Thus the statement by Netanyahu was not only weak. It was false.

    Max Blumenthal is the author of Republican Gomorrah (Basic/Nation Books, 2009) has just been released. Contact him at maxblumenthal3000@yahoo.com.
  • The Obama Deception: Change Change to More of the Same!

    Posted on September 4th, 2010 Chris No comments

    This documentary breaks through the change rhetoric to the fact that behind the facade of change it is the same corprotocracy. However, being made by Alex Jones there is some things mentioned in this documentary on Obama that is a little far out and needs to be taken with great Critical Thinking. One needs to remember how much of a Fundementalist Alex Jones is and that he accuses the left of all the ills.  Yet, the corpotocracy he describes is very real, but it comes from a far-right Neo-Liberal/Neo-Con Corporate Elite and from the vileness of the Statist Capitalist system of Authoritariansim in general.

  • Anarchism: Necessary But Not Sufficient

    Posted on September 4th, 2010 Chris No comments

    Posted by Anna Morgenstern on C4ss.org

    In discussion with a few people, talking about the extra-anarchistic aspects of various forms of social justice, I said “Anarchism is necessary, but not sufficient, to create a just society.”  It seemed like a statement that warranted a bit of expansion, so here we go.

    Anarchism is necessary, we can say, to create a just society.  As far as I can tell, the best definition of anarchism is “the belief that no one has any special authority to do anything that anyone else doesn’t have.”  Anarchy, then, is a society in which this principle is widespread enough to be a truism.  If one group of people can arrogate special authority to themselves to rule over others, this alone is a vast injustice in and of itself.  But it also creates a cascade of further injustices.

    Under statism, the overall socioeconomic system tends to divide into classes, some more privileged than others.  This allows people in the more privileged classes to use their power to bully others or manipulate them, even without direct coercion.  An example of this is “survival prostitution”.  There are people who are so abject and miserably poor that they are willing to do anything for enough money to survive until tomorrow.  They do not have the option to say “no”, if they want to live, they must say yes.  Wage slavery in the modern corporate capitalist world is, for many people, merely a more extended version of this.

    Now yes, the state can and does sometimes offer marginalized groups protection from some of the worst effects of their marginalization, but it is the state which put them in the position of needing that protection in the first place.  It is the state which makes people economically dependent.  It is the state which destroys the wealth of the lower middle class and poor.  It is the state which shifts the supply/demand balance of the labor market so workers are chasing jobs, rather than the other way around.  And though everything in our world is not economic, in the sense of being about trade and production, economic freedom gives people more space to carve out social freedom.  It is difficult if not impossible to wield social power if you’re barely subsisting.

    Also, the state even at best is a double edged sword.  If you’re an LGBT person in the USA you know what I’m talking about.  Laws against sodomy, laws against gay marriage, indecent exposure and attempted solicitation laws being applied unjustly against MTF trans people, and much, much more.  Let’s not forget schools.  Public schools under statism are state schools.  If a pressure group can take over the school board, they can impose their will on the curriculum, as they have in Texas.  This pattern applies to just about anything in a statist society.  The immigration laws in Arizona are a good example.  Even though there are plenty of nice, non-racist people in Arizona, they aren’t the ones in control over the state, and they still have to live under those laws, or dare to defy them.  And even when the state passes a law that most people believe will bring about “justice”, some innocent people are going to get fucked over by it.  There’s no getting around that, because justice is situational and fluid.  There is no centralized legal code that can avoid fucking people over.

    And then there are the ethical implications of statism itself.  Statism tends to favor the social manipulators, the bullies and the ass-kissers of the world.  It rewards the fraudulent and the corrupt, and creates a myth of elitism that is not removable as long as there is a state.  The primary view of humanity that the state espouses is Neo-Hobbesian.  That humans left to their own devices are inherently self destructive and deplorable, but that there is an elite group of people, such that if they are in charge of the world, they can uplift the rest of us, or at least force us all to live relatively peacefully with one another.

    Over and beyond all that you have the problem of selective enforcement.  When the rubber meets the road, the state means cops.  This means that the law gets enforced when the cops want it to.  Every state in history has eventually reached a point where the sheer volume and overlap of contradictory laws allows the police to act as local dictators of a sort.  Most people of color will know just what I’m talking about.  Anecdotes abound about getting pulled over for DWB:  Driving While Black.  Arrest to Conviction ratios clearly seem to show a pattern of racial and class bias.  And this is not likely to change as long as there is a state.  Sure, some places might be better than others, but no matter how fluid, the state holds a territorial monopoly over law enforcement, and so there will always be a certain scale of injustice built into the system.  There aren’t many, if any statist societies I’ve seen in which “resisting arrest” isn’t a crime, for example.

    Under anarchism, people at least have a fighting chance to achieve widespread justice.  However, anarchism alone is not enough.  There might still be racists and homophobes under anarchism, there might still be sociopaths and liars.  Without a statist economy, and a centralized code of laws, it will be much harder to get away with unjust acts on a large scale, over a long period of time, however.

    But the question of selective enforcement and/or selective defense will still exist.  Transgendered people, for instance, make up a very small fraction of the overall population.  Even accounting for the fact that transgenderism is vastly underreported due to the current social milieu, it will still most likely be a tiny fraction of the human race.  It would not be impossible for systematic crimes against transgendered people to go largely unpunished, even in anarchy.

    And the question of population distribution also matters.  A pocket of black people who live surrounded by white people who are determined to make life difficult for them will have a hard time fighting back even without a state imposing on them.

    In the thinnest of thin anarchisms, in which there is no state, but nothing develops in the vacuum left behind, packs of extremely clever sociopaths could roam the land, draining community after community of their resources and good will, like a vampire gang.

    So there will still be a need for social awareness and ethical debate even after the concept of “the state” has been destroyed.  The arguments between the ancaps, ansocs, and the rest of us anarchists about how a valid anarchic society deals with money, contracts, property, ownership and various torts will go on after the state has become a ridiculous fiction in the mind of most people.

    The good news is that a stateless society synergizes with all these other things.  The amount of energy that your cause puts into getting the state to protect you from some other aspect of statist society will do much, much more good in direct action without the state getting in your way.  And the amount of solidarity you’ve seen from other people is a fraction of what you’d see if people weren’t crushed under the heel of the state.  A person who is slaving away to keep themselves going does not have the time or energy to help other people very much, even if they are sympathetic.  And the “I gave at the congress” mentality prevails.  In a statist world, where people expect the state to provide for them, even kind and sympathetic folks will expect the state to provide justice, as rough and unjust as it may turn out to be.

    In an anarchist world where people feel like the buck stops with them, they’ll be more able and willing to help each other.

    And there is one other factor to consider.  Over time, people in an anarchist society will tend to begin to develop their own quirky interests.  That thing you’ve always been into, but never had the time or money to pursue, well you will now.  This unleashing of the inner weirdo that lurks within us all will tend to make people more tolerant of differences in general.

    Under anarchism, if you have an idea you share with other people, you can put it into practice NOW.  You don’t need permission; you don’t have to force other people to agree with you, you can just start doing it.  Then you will find out what it’s like in practice.

    As Allan Thornton said, “What will happen under anarchism?  EVERYTHING.”

    Now sure, some people are sociopaths or psychologically crippled by irrational hate and fear.   And those people are always a threat.  They might get together and form a small pocket of hell.  But in a sense, they’ve imprisoned themselves.  On that note, I can imagine anarchist “extraction teams” developing who extract people from communities in which they are being held against their will.

    Again though, a lot of this psychological corruption comes from living in a state which imposes its values on you.  Not only are the state’s values inherently corrupt because of the built-in elitism and hero worship and hatred of the “masses”, but those who resist this early indoctrination are tortured and torture often makes people psychotically hateful and sadistic.  A world in which most children grow up without forceful indoctrination, will yield a much healthier, more positive group of people.

    There is another aspect of things that I have hinted at before, but I think hasn’t really been totally understood or accepted.  I believe that large scale, widespread economic injustice is impossible under anarchism.  This is at the heart of the matter.   I believe that economic anarchy is its own economic system, apart from what most people think of as either “capitalism” or “socialism”.  It will have aspects of both, in the best sense of each of them.  But it will also be much fuzzier and less rigid than either of those systems in their statist form.  Public will no longer equal “owned by the state” and Private will no longer equal “owned by a small elite (who happen to run the state)”.  Basically, to put it crudely, an anarchist doesn’t let a corporation or a syndicate or a commune tell them jack shit.  Things like property rights and debts and contracts will be much more nebulous than they are in a system where they are predefined by a strict centralized law code enforced by cops, but more tangible and solid than they are in a system where an elite group can willy-nilly revoke them at will.

    It will be much harder to hold onto capital in some places, but much easier in other places.  A lot of it may depend on good will.  Likely, any sort of currency, no matter what it’s backed by ostensibly, will practically function much like “obs” in E.F. Russell’s wonderful “And then there were none”.  The economy will be situational, fluid and creative, like we will be.  There will be trial, and there will be error, but there will be change, and we will learn how to “do it right”.  Because we will be able to.

    C4SS Contributing Writer Anna O. Morgenstern has been an anarchist of one stripe or another for almost 30 years. Her intellectual interests include economic history, social psychology and voluntary organization theory. She likes piña coladas, but not getting caught in the rain.
  • How Corporations Make Profits by Associating Themselves with Charitable Causes

    Posted on September 4th, 2010 Chris No comments

    Companies like Starbucks have figured out that they can make more money by attaching their profits to causes that people care about.

    September 4, 2010 | Alternet.org

    I want to develop a line of thought about one point: why, in our economy, charity is no longer just an idiosyncrasy of some good guys here and there, but the basic constituent of our economy. …

    In today’s capitalism more and more the tendency is to bring [making money and charity] together in one and the same cluster, so that when you buy something, your anti-consumerist duty to do something for others, for the environment and so on, is already included into it.

    If you think I’m exaggerating, you have them around the corner. Walk into any Starbucks Coffee, and you will see how they explicitly tell you — I quote their campaign: “It’s not just what you are buying, it’s what you are buying into.” And then they describe it to you. Listen: “When you buy Starbucks, whether you realize it or not you are buying into something bigger than a cup of coffee. You are buying into a coffee ethics. Through our Starbucks ‘Shared Planet’ program, we purchase more fair-trade coffee than any company in the world, ensuring that the farmers who grow the beans receive a fair price for their hard work. And we invest in and improve coffee growing practices and communities around the globe. It’s a good coffee karma.” And a little bit of the price of a cup of Starbucks coffee helps furnish the place with comfortable chairs, and so on.

    This is what I call cultural capitalism at its purest. You don’t just buy a coffee, you buy your redemption from being only a consumerist. You know, you do something for the environment, you do something to help starving children in Guatemala, you do something to restore the sense of community here.

    I could go on — like, the almost absurd example of this is so-called Tom’s Shoes, an American company whose formula is “one-for-one.” They claim for every pair of shoes you buy with them, they give a pair of shoes to some African nation. One act of consumerism, but included in it, you pay for doing something “[good].”

    This generates a kind of — how should I put it? A semantic over-investment or burden. You know that it’s not just buying a cup of coffee. It’s at the same time you fulfill a whole series of ethical duties. This logic is today almost universalized. …

    So my point is that this very interesting short-circuit where the very act of egotist consumption already includes the price for its opposite.

    Based against all of this, I think that we should return good old Oscar Wilde, who still provided the best formulation against this logic of charity. Let me just quote a couple of lines from the beginning of his The Soul of Modern Men Under Socialism, where he points out that, a quote: “It is much more easy to have sympathy with suffering than it is to have sympathy with thought.”

    [People] find themselves surrounded by hideous poverty, by hideous ugliness, by hideous starvation. It is inevitable that they should be strongly moved by all this …. Accordingly, with admirable, though misdirected, intentions, they very seriously and very sentimentally set themselves to the task of remedying the evils that they see. But their remedies do not cure the disease: they merely prolong it. Indeed, their remedies are part of the disease. They try to solve the problem of poverty, for instance, by keeping the poor alive; or, in the case of a very advanced school, by amusing the poor.

    But this is not a solution: it is an aggravation of the difficulty. The proper aim is to try and reconstruct society on such a basis that poverty will be impossible. And the altruistic virtues have really prevented the carrying out of this aim….The worst slave owners were those were kind to their slaves, and so prevented the horror of the system being realized by those who suffered from it, and understood by those who contemplated it….Charity degrades and demoralizes….It is immoral to use private property in order to alleviate the horrible evils that result from the institution of private property.

    I think these lines are more actual than ever. Nice as it sounds, basic income, or this kind of a trade with the rich, is not a solution.

    There is, for me, another series of problems. This is for me the last desperate attempt to make capitalism work for socialism: let’s not discard the evil, let’s make the evil itself work for the good. 30, 40 years ago, we were dreaming about socialism with a human face. As it is today, the outmost, radical horizon of our imagination is global capitalism with a human face. We have the basic rules of the game, we make it a little bit more human, more tolerant, with a little bit more welfare.

    Let’s give to the devil what belongs to the devil, and let’s recognize that, in the last decades at least, until recently, at least in Western Europe. I don’t think that in any moment in human history such a relatively large percentage of population live in such a relative freedom, welfare, security, and so on.

    I see this gradually, but nonetheless seriously, threatened.

    I’m just saying that the only way to save the [cherished values of liberalism] is to do something more. I’m not against charity in an abstract sense. Of course it’s better than nothing. Just, let’s be aware that there is an element of hypocrisy there. .For example, of course we should help the children. It’s horrible to see a child whose life is ruined because of an operation which costs twenty dollars. But, in the long term, you know, as Oscar Wilde would have said, if you just operate on the child then they will live a little bit better, but in the same situation which produced them.

    Slavoj Zizek is a philosopher and critical theorist, and author of many books.
  • No Substitute for Economic Justice

    Posted on August 20th, 2010 Chris No comments

    In 1919 Frank Crane pointed out (in “Justice,” one of his Four Minute Essays) that charity was a poor substitute for justice. Charity, he said, is a palliative which leaves injustice — privilege — in place, while helping the most unfortunate. Charity makes it possible for the poor and unemployed to scrape by, thus enabling the system of privilege to continue. But justice makes charity unnecessary by removing the root causes of poverty and unemployment.

    Today, we could say of the welfare state and Keynesian fiscal policy what Crane said of charity.

    A whole host of statistics indicate that the current recession is unlike any other since the Great Depression. The number of long-term unemployed, and the number of people competing for each available job, are both more than double their levels in the recession of the early 1980s. While I think Obama’s stimulus package probably stopped the free-fall in job loss that occurred in First Quarter 2009 — just barely — we can see that as soon as the money stops being spent the economy stagnates again. So we’re probably headed either into the second leg of a W-shaped recession, or into a long-term period of stagnation and zero job growth.

    Our old ideas on what it takes to overcome the state capitalist economy’s inherent tendencies toward excess capacity are becoming obsolete. And the causes go back to Frank Crane’s understanding of justice.

    Injustice is at the heart of our economic problems.  By making capital and land artificially scarce and expensive, the state forces workers to sell their labor in a buyer’s market and thereby reduces the bargaining power of labor. The owners of land and capital are thereby enabled to collect scarcity rents.

    The economic effects are destabilizing. Income shifts from workers, who work mainly to meet their consumption needs, to rentiers with a high propensity to save and invest.  The result is a chronic tendency toward overaccumulation and underconsumption.

    At the same time, the state subsidizes the most centralized, capital-intensive forms of production, leading to mass-production industry with overbuilt plant and equipment that’s constantly plagued with idle capacity.

    The problem was “solved” for a while by World War II, which blew up most of the plant and equipment outside the U.S. and created a permanent war economy to absorb a major part of the destabilizing economic surplus. But by 1970 the industrial capacity of Europe and Japan had been rebuilt, and the old tendencies toward chronic stagnation were resumed.

    Since then the tendencies toward stagnating economic growth, excess capacity, and jobless recoveries have increased from one decade to the next. The economy has become increasingly dependent on speculative bubbles to soak up surplus capital, and on growing consumer debt to absorb excess industrial output.

    Given state capitalism’s inherent tendencies toward stagnation, the welfare state and Keynesian demand management are absolutely necessary parts of it.

    State intervention creates maldistribution of purchasing power and excess production capacity. Government attempts to remedy the resulting destabilizing tendencies by taxing a small fraction of what was originally shifted from the producing classes to the rentier classes, and giving it to the most destitute portion of the exploited classes, in order to prevent politically destabilizing levels of  unemployment and homelessness.  It runs a deficit during economic downturns in order to provide sufficient demand to compensate for the shortfall in purchasing power.

    The problem is that the relative periods of downturn keep getting longer, and the deficit spending required to correct for the chronic demand shortfall keeps getting larger.

    Once the state substitutes privilege for justice, it inevitably creates destabilizing tendencies that must be met by one of two possible courses of action. One is to remove the privileges and allow the natural operation of justice, so that the chronic instabilities don’t arise. The other is to add secondary interventions like the welfare state and Keynesian fiscal policy, so the destabilizing tendencies don’t get too bad — and to keep increasing the level of such intervention when it no longer works the way it should.

    So to the “conservatives” who want to “cut spending” and “balance the budget,” I give this warning:  Understand the implications of what you demand. If you will  not have a welfare state and deficit spending, you must have a free market — a genuine free market, not the kind of fake “free market” the U.S. Chamber of Commerce, AEI and Heritage Foundation call for. You must cease to enforce monopoly rents to the owners of land, capital and “intellectual property.”

    If you go only halfway, removing the palliative measures without removing the injustice — if you choose a fake corporatist version of the “free market” — you will only give us another Great Depression worse than the last one.

    The choice is clear. If you will not have justice, you must have welfare and Keynesian stimulus spending. There is no third way.

    C4SS Research Associate Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: An Individualist Anarchist Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.

  • The Capital Conundrum

    Posted on August 20th, 2010 Chris No comments

    While much is up for debate about the capitalistic system, we are assured of one fundamental truth: the worker cannot purchase his own product. At the end of the day, he comes up short.

    In fact, the driving motivator of the capital system, second only to the search for ever increasing monopoly profit, is the search for someone, anyone, to buy the results of production. For if the worker who produces the product can’t buy the product, who will?

    It has been suggested that the capitalist system is simply a re branded version of the Monarchial system, with the serfs toiling away in the third world while the noble Euros and Americans divvy up and devour the produce. While this is a decent observation, it misses a fundamental point. The physical product of monopoly capital is primarily infinite multiples of run of the mill consumer items. While the system copiously rewards its controllers with great wealth, the system cannot operate without the worker, not only to toil but to buy.

    How can this be achieved when labor cost of the finished product can run as low as ten percent and seldom over thirty percent of the product’s selling price? How to do this when American corporate industry profits seldom run below fifty percent of selling price? How to do this when the bulk of profits are recapitalized, driven back into the process with the intent of increasing production efficiency, increasing profits and in the process further lowering the ability of the worker/consumer to purchase and consume?

    The initial answer came unwittingly from Monopoly Capital itself in the form of price competition. While the wage was always suppressed below market value, the product pricing was initially subject to market competition. This had the effect of nullifying some of the wage loss and allowing the worker to at least purchase what was minimally necessary and alleviate inventory accumulation.

    But by the twenties, price competition had been eliminated in many sectors through collusive industry cooperation and government intervention. Counteracting this trend was union progress which had increased purchasing ability for those protected by unions.

    Still there was a great capital surplus, much of which was invested in stock paper Ponzi schemes. When the house called in the chips and the economy sank, the days of Monopoly Capital seemed numbered.

    While infinite war spending was credited for pulling the nation out of the depression, two factors continued the expansion and fed the capital machine; the advent of large scale social spending and the long term decline of oil prices that lasted through the mid seventies. Social spending allowed many to purchase goods that were unaffordable left to their own devices. The sustained fall of the price of oil allowed industry to base profits on energy consumption and forego for a time dismantling the labor pool. The massive energy subsidies and incentives provided by the government helped push industry in this direction.

    The reversal of oil prices in the mid seventies changed the game. Capital went on the warpath to raise profits by scaling down labor costs. Reaganomics, the revival of the robber baron mentality, exacerbated the perennial problem of monopoly capital, finding consumers who can afford to purchase the product, by concentrating ever increasing capital in the hands of the capitalists.

    Debt became the “modern” solution; both government and personal debt. Debt enables the purchase of what is unaffordable now with the notion it will become affordable in the future. To the wage earner, it is similar to the pension, the promise that his inadequate wage will be made whole again at some future point. Debt is a justification of monopoly pricing.

    But, the capital machine is always trying to consume itself. It strives to profit not only from the productive output of industry but also from the non productive output of its financial arm. Laws require debt to be repaid with interest, whether the result of investment is profit or loss.

    And the flow of non productive interest is almost always from the capital poor class to the capital rich class, further undermining the balance. Even when the capital rich class stumbles and falls over one of their harebrained alchemy schemes to magically produce capital from capital, the state refuses to allow the inevitable capital losses to tip the scales back a bit and intervenes with socialized loss insurance known as “bailouts”.

    Such is the “capital conundrum”: the continuing effort of Monopoly Capital to undermine its own stability by depriving the wage class of the ability to purchase its own product.

    The interesting paradox is that while the primary inclination of the controlled system is to concentrate capital and ultimately starve itself by withdrawing too much from the labor side of the production mode, the solution, diverting capital back to the labor/consumer force, if left to its own natural course, eventually has the reverse effect but the same outcome: dispersion of capital and the disintegration of monopoly capital.

    It seems the long term outlook for Monopoly Capital, no matter how you look at it, is not so good. What a shame!

    C4SS Contributing Writer Gene DeNardo is a carpenter, woodwooker, jazz musician and writer living in the Pacific Northwest. He randomly selected a political theory class in college to fullfill a requirement and in the process kindled a life long passion. His writings can be found on the net at sites such as “The Nolan Chart”.

  • Economic Development Without the State

    Posted on August 20th, 2010 Chris No comments

    American political debate has recently centered on manufacturers that relocate overseas and “abandon” American workers — and the alleged need for government to stop them from doing it.  But maybe we need to figure out a way to abandon the corporate employers, instead.

    Conventional community economic development policy — this is equally true of Chambers of Commerce, state industrial development commissions, and World Bank technocrats — starts from the assumption that the path to economic development is colonization: Get a giant corporation to set up an outpost in your community and provide a lot of jobs (preferably with government seed money to lure them in).

    The rationale was simple: For a couple of centuries, the propertied classes’ privileged access to big piles of capital and millions of acres of stolen land made them a chokepoint on economic development.

    But technological developments in recent years — the desktop/Internet revolution in the information sphere, and the revolution in cheap digitally controlled machine tools in manufacturing — are freeing us from this dependence.

    The main material reason for the factory system and predominance of wage labor was the technological shift a couple hundred years ago from relatively inexpensive, general-purpose artisan tools to expensive machinery.  Only the very rich could afford the machinery required for production, and they then hired wage laborers to operate it.

    The computer revolution, and the revolution in cheap garage-scale machine tools, have reversed this shift.  The computer is a cheap, general-purpose artisan tool that destroys the quality gap between what a person can produce at work and what he can produce at home, in a whole range of industries:  Software, recording, and desktop publishing among them.

    And now cheap digital machine tools mean the same thing for manufacturing.  Open-source hardware hackers have cooked up homebrew versions of CNC routers, cutting tables, milling machines, lathes, 3-D printers, etc., that cost one or two thousand dollars (or less) to build — compared to tens of thousands for commercial, proprietary digital tools, and millions for a factory equipped with old-style mass production machinery.

    A garage “factory” with $10k worth of homebrew machinery can do most of what used to require a million-dollar factory.  And with a network of open-source hardware designers, it can design its own products, and produce “lean” style:  Producing in small batches and switching back and forth between lots of different products as the orders come in, and gearing production to a local/neighborhood market.  That means low overhead, no inventory, drastically reduced shipping costs, and no mass-marketing costs.

    In a lot of manufactured products, a major portion of price is either brand-name markup or embedded rents on patent and copyright, rather than labor and material cost (Tom Peters crowed, in The Tom Peters Seminar, that 90% of his new Minolta’s price was “intellect”).  Competition will strip out that part of price (along with the portion of your work hours that go toward earning money to pay tribute to the owners of artificial property rights).

    It helps that relocalizing manufacturing to “a hundred thousand garages” essentially makes proprietary designs unenforceable. The costs of industrial patents are such that they only pay for themselves if you produce in large batches, and enforcement costs are minimized by the fact that a handful of oligopoly firms distribute their products through a handful of corporate retail chains.  When thousands of garage factories are producing knockoffs or riffing off of proprietary designs, in small batches at the neighborhood level, the costs of enforcement will destroy the patent regime.

    Patents are also the main legal support to planned obsolescence, as well as to the whole model of price-gouging on parts and accessories (e.g. cheap phones and expensive service plans, cheap printers and expensive toners, etc.).  With no patent restrictions on competition, there would be no legal barrier to competitors producing generic modular accessories and spare parts for other companies’ platforms.  So the competitive pressure would be toward developing products that were compatible with other companies’ stuff and easy to repair by simply replacing one modular component — instead of designing products that only work with your own marked-up accessories, and can’t be fixed without throwing the whole thing away.

    And all this renders the conventional strategy for community economic development totally obsolete. A low-capital, low-overhead approach to development is an enormous force multiplier for the community’s own resources. When the capital outlay for building a factory to produce everything you need falls a hundredfold, the propertied classes’ longstanding advantage in access to land and capital is completely nullified — communities can bootstrap local economies, starting with almost nothing, without begging a Daddy Warbucks for help.

    So maybe this is the beginning of a shift away from the idea of “jobs,” and back to work as something working people do for ourselves and for exchange with each other.

    C4SS Research Associate Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: An Individualist Anarchist Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.

  • No War But Class War!

    Posted on August 20th, 2010 Chris No comments

    Frédéric Bastiat nailed it when he defined the state as “the great fictitious entity by which everyone seeks to live at the expense of everyone else.”

    If that was as far as it went, political government would pretty much be a wash. We’d all get back about what we put into it, less the “friction” of transaction costs and such. Eventually we’d presumably notice that the state is a hamster wheel and get off it.

    Unfortunately, that’s not as far as it goes. Any state — even (or perhaps especially!) the most putatively egalitarian or democratic one — eventually metastasizes under the pressures created by the competition of “everyone to live at the expense of everyone else.”

    Even if first intended as a mere abstract transactional crossroads across which mutual aid assets or reciprocal rights protections pass on their way to and fro, the state is quickly reified by its more clever admirers. It becomes a concrete entity with its own interests. A new class of keepers, tenders and purpose-evolved parasites — the political class — emerges to make those interests its own.

    Eventually the state drowns in the waste generated by its parasitical classes. The French monarchy collapsed beneath the weight of the Bourbon dynasty’s wars and palaces and intrigues. The Soviet Union’s apparatchik class drained its blood until that reddest of red states became a pale, lifeless husk — whiter than Kolchak’s armies! — ready to be blown away by the slightest gust of popular discontent.

    It is for this reason that I’m very much encouraged by the American situation. After more than 200 years, the United States seems to be reaching the end of the same rope.

    Its politicians have racked up more than $13 trillion in direct debt, at least $100 trillion in “unfunded liabilities” (i.e. promises of future payments), and at present are borrowing and spending $150-$200 billion more per month than they can figure out how to forcibly extract from the populace through taxation.

    Where’s all that money going?

    “At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn …” (“Federal workers earning double their private counterparts,” by Dennis Cauchon, USA Today, 08/10/10)

    “We have already spent close to $1 trillion in Iraq …. When all is said and done, the combined cost of caring for veterans, continued Iraqi operations, replenishing and transporting equipment and paying interest on the debt will bring the final tally to well over $2 trillion. Including the economic costs — both to individuals and to the economy as whole — the bill easily tops $3 trillion.” (“Iraq war winds down, but costs soar,” by Linda J. Bilmes, San Francisco Chronicle, 08/15/10)

    “We spend $7 billion a month on the war in Afghanistan and every day it becomes more and more clear that we are pursuing a failed strategy that doesn’t make America any safer …” (US Rep. Chellie Pingree [D-ME], quoted in “Mitchell meets, greets,” by Susan M. Cover and Rebekah Metzler, Kennebec Joural, 08/02/10)

    This, my friends, is what we call “not a tenable situation.” But the state keeps doubling down, as with last week’s $26 billion payout to save 300,000 government employees from falling off the teat.

    America’s politicians, by habit, frequently call upon the populace to eschew “class warfare,” by which they are generally understood to mean war between the rich and the poor.

    Left unsaid, but becoming increasingly clear even to those who generally take little interest in matters political, is the fact that every operation of government is, by definition, an exercise in “class warfare” — a raid by a political class whose very survival depends on its continued ability to loot your wallet, your wealth, your work.

    Like everyone else, the political class has to eat.

    Unlike everyone else, the political class proposes to eat us.

    Now that the pesky mosquitoes have mutated into gnawing rats and threaten to grow into rabid wolves, more and more Americans are finally starting to take notice.

    It’s class war, to the death, like it or not — a war for survival, the political class or us. Personally, I’m for us.

    C4SS News Analyst Thomas L. Knapp is a long-time libertarian activist and the author of Writing the Libertarian Op-Ed, an e-booklet which shares the methods underlying his more than 100 published op-ed pieces in mainstream print media. Knapp publishes Rational Review News Digest, a daily news and commentary roundup for the freedom movement.

  • The Cognitive Biases of Hierarchy

    Posted on August 20th, 2010 Chris No comments


    In a recent column (“Why Networks Defeat Hierarchies,” C4SS, Aug. 12), I examined the tendency of hierarchies to suppress negative feedback on their own performance.  Paranoia over leaks and the obsessive desire to protect the leadership’s monopoly on information leads to knowledge being denied those in the organization who need it to make effective policy.  Data from below is systematically filtered to create a false image of the world at the top of the pyramid.  And the discretion that subordinates need to cope with the unexpected, against a background of information overload, is hampered by management’s need to have a finger in every pie.

    Another, related problem is the cognitive biases that authority itself implants in the mind of the individual manager.

    In an essay at (of all places) The Wall Street Journal (“The Power Trip,” August 14), Jonah Lehrer describes the findings of psychologists’ experiments on how power affects one’s view of the world. According to Lehrer, the experiments found that people in a position of power display behavior patterns commonly associated with damage to the portions of the cerebral cortex that govern empathy and the ability to imagine the world from others’ perspective.  Power, in other words, kills the ability even to understand that there are other perspectives than those of the hierarchy.

    One part, in particular, was interesting:  after being assigned to superior and subordinate positions in a role-playing game, participants were exposed to fake cell phone ads.  Some of the ads emphasized product quality and price, while others “featured weak or nonsensical arguments.”  Interestingly, subjects who’d been role-modeling positions of authority “were far less sensitive to the quality of the argument.”  Lehrer writes:

    “This suggests that even fleeting feelings of power can dramatically change the way people respond to information. Instead of analyzing the strength of the argument, those with authority focus on whether or not the argument confirms what they already believe. If it doesn’t, then the facts are conveniently ignored.”

    So if you wonder why the MBAs at corporate seem to be literally unaware of any alternative to the Nardelli/Fiorina/”Chainsaw Al” model of downsizing everybody and giving themselves a bonus, the answer is:  they probably are.  Their own power has made them stupid.

    I think part of the explanation for the outcome of the cell phone experiment might be that people in power are encultured to shut off the capacity to critically evaluate communication based on internal logic or sense, and instead to evaluate it based on how authoritative the source is. After all, if they’re not at the very top of the pyramid,  they’re expected to “buy in” to whatever comes from above and uncritically pass it along down the conveyor belt.

    And applying critical thought processes to policies or other communications from management is, for ordinary workers, clear evidence that one doesn’t have his mind right. To evaluate communications from above in terms of their content, rather than simply tucking one’s head and saying “I obey,” suggests (however faintly) that the evaluator views the source of the communication as in some sense their equal or peer, and sees the communication as an attempt at persuasion by an equal rather than someone under whose authority they have been set.

    In conversations with authoritarians about the stupidity of the pointy-haired bosses, I frequently encounter statements  that “they’ve been put in authority for a reason, and it’s been decided that blah blah woof woof.”  Note the passive voice.  The people in authority, and their policies, are just part of “the way things are,” embedded in the nature of the universe.  If you state it instead in the active voice (“So-and-so says to do this”), there’s the danger that someone will see the issuer of the order as a mere mortal with individual goals and desires and subjective judgment.  Then, rather than accepting “the rules” as something that’s “been decided” like tablets handed down from Mt. Sinai, they might start actually examining the motivations and judgment of their superiors, and evaluating — from the standpoint of an equal — whether they’re good or bad.

    Once you start viewing as equals the people who set the speed limits for a particular stretch of highway or write the instructions on a box of mac and cheese, or who send you all those idiotic memos every day, and you evaluate their communications based on whether they make sense rather than the authority of their source, your mind is no longer right.  Once you view the makers of rules as your equals, and their rules as arguments or suggestions to be evaluated and followed based on your own judgment of their merits (If it’s not “a good idea,” I don’t CARE if it’s “the law”), you’ve established that you’re a dog with too much ancestral wolf DNA to be safe around humans.

    C4SS Research Associate Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: An Individualist Anarchist Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.

  • Been there, done that – a look at the US banking “reform”

    Posted on August 17th, 2010 Chris No comments

    by John E Jacobsen

    There’s a reason American workers aren’t paying much attention to the new financial regulations. And no, it isn’t out of “apathy.”

    Despite making a combined $18 billion in profits last quarter alone, major banks are still doing all that they can avoid new consumer protection legislation – and, we might add, new legislation hasn’t made it too difficult for them.

    Much like the recent CARD Act, banks are quickly finding loopholes in the new legislation to recoup any of their potential losses. A new Bank of America program in Georgia, for example, is now charging customers to simply receive bank statements in the mail.

    Amongst other plans in the works, banks may begin raising arbitrary “minimum balance requirements” for consumers, charging people for simply not having enough money in their accounts.

    New Oversight:

    Amongst the bills more popular attributes is its creation of a new Bureau of Consumer Financial Protection. And here is where the liberal rallying cry “more regulation!” falls apart.

    The idea that government regulators are any better suited to watch out for our best interests than corporations are is baseless.

    It is, in fact, not an issue of good or bad regulation, but the philosophy of government regulation itself which is absurd.

    These days, we are extremely hard pressed to find where the line between politician and CEO lies; the place where being a regulator ends, and being a lobbyist starts. The fact of the matter is, no government agency in the United States today is immune from the insidious influences of the wealthy.

    The newly created Bureau of Consumer Financial Protection (BCFP), for example, is already set to change from a regulatory agency to yet another revolving door for wall street insiders – and, I might add, it hasn’t even officially been established yet!

    Just a casual glance at the news reveals what a heated political battle is already being waged over the appointment of a new director.

    But of the dozens of people recommended to take up the new position, one in particular stands out to Democratic party leaders: the current chair of the Congressional Oversight Panel for TARP, Elizabeth Warren.

    But Democrats, looking to appoint Warren, are stuck between a rock and a hard place. As political analyst Ezra Klein correctly points out, Obama’s administration needs to demonstrate to his disillusioned base that he and his party can deliver on promises like more consumer protection. But doing so will anger our Wall Street masters of the universe, who may react to the appointment of Warren by slowing our already stagnate credit supply.

    Republicans, with a different strategy but for similar reasons, are gearing up to possibly filibuster the nomination of Warren, a woman too whole-heartedly skeptical of the financial sector for their liking.

    Both parties, you’ll note, are still fundamentally trying to please Wall Street, who after all does pay their bills – and even regularly writes their legislation.

    “…the special interests opposing us contributed to the failure of the financial system. They’re trying to preserve the system that failed, and Congress is listening to them in some respects,” observed Ed Mierzwinski, consumer advocate for US PIRG.

    It only makes sense that politicians listen to their Wall Street backers – they are not only their financial benefactors, but often their close colleagues and business partners.

    Take for example the case of Micheal Paese, Goldman Sach’s top lobbyist in Washington D.C. who managed to become head staff member to House Financial Services Committee Chairman Barney Frank – the man who Time magazine pointed out “presided over the negotiations on financial reform.”

    Similarly, former Goldman lobbyist Mark Patterson has weaseled his way into the Treasury Department, and is now currently serving as its chief of staff.

    The revolving door, of course, goes both ways: a former adviser to Senator Chris Dodd (both the chairman of the Senate Banking Committee and author of many financial regulatory reforms), Janice O’Connell, has recently been hired onto Goldman’s lobbying firm.

    These close relationships prompt the Christian Science Monitor to recall that “[In] all, the finance, insurance, and real estate industries spent a record $475 million on campaign contributions to congressional candidates in the 2008 cycle and are ramping up for 2010 midterm elections.”

    What, given the recent history of our country’s government, could possibly make anyone believe the BCFP will be any less subject to the pressures of Wall Street than any other office in government? Wasn’t also Wall Street able to tear down the post-depression era Glass-Steagel Act, and if so, what in these reforms will stop them from doing the same to the Dodd-Frank Bill?

    New derivatives and mortgage regulations:

    Perhaps just as important as, although less popular than, the creation of a new consumer protection bureau, are the new regulations governing derivatives and mortgages.

    Both new sets of regulation offer positive steps forward. Derivatives, for example, will now be traded publicly, in much the same way stocks are, and new mortgage regulation prohibiting NINA sales (selling mortgages without proof of income) will offset the likelihood of another massive housing bubble.

    But in regard to these regulations’ original purpose – to fix the underlying problems that led to our current economic crisis – at most we can only call these reforms band-aids.

    To begin with, the housing bubble and the derivatives which helped create it were only the trigger for a much larger underlying problem.

    As we discussed in a previous article, the real problem with the American economy, the real reason we were hit so hard by the recession, is that we have had to rely so heavily on consumer credit.

    Since the early 1970?s, American workers have been forced to take on more and more debt as their wages have stagnated and declined. Slowly, this debt had been building up into an unwieldy and destabilizing force in our economy.

    Banks and employers were willing to ignore the dangerous nature of this increasing debt problem, however, because it meant that 1. employers could continue to lower their workers’ wages and 2. banks could find new ways of making money off of desperate workers – such as making payday or NINA loans.

    This arrangement, however, could only last so long.

    It was convenient for banks to make more and more ridiculous loans to increasingly poor workers as the years went on, in order to keep up consumer spending in the economy – but eventually, you can guess, those absurd loans are going to catch up with us.

    It doesn’t take a rocket scientist to figure out (or an economist, for that matter) that if you’re loaning more and more money to people whose wages are dropping lower and lower, eventually they won’t be able to pay anything back at all. This is exactly what happened to us when we were hit with a wave of mortgage defaults and bankruptcies.

    The massive amount of debt U.S. households had been forced to take on in this country over the past 40 years was a ticking time bomb. A massively overinflated housing bubble, powered by new financial innovations like collateralized debt obligations, wasn’t the problem at all. They were just the straw that broke the camels back.

    Nothing, to date, has been done to remedy this issue – certainly nothing in the current financial regulation.

    Conclusions:

    These supposed “fixes” to the American financial system, of course, are anything but.

    It fails to address systemic problems in our economy, fails to address the inevitable Wall Street fight back against the bill itself, and fails to adequately address some of the biggest concerns citizens have about the last bailout.

    Many outraged workers are rightly asking whether or not the new legislation will prevent another massive bailout. The answer is a resounding “theoretically!”

    As New York Times author Steven Davidoff notes,

    “The bill will still allow the government to fashion ad hoc remedies in the case of a failing financial institution. It also erects a financial insolvency regime that will allow the government to punish failing financial institutions and their creditors.

    “However, it appears there is enough wiggle room in the bill and elsewhere in the laws that the government will still be able to structure unique one-off solutions in any financial crisis. We just won’t know until the law is tested.”

    I’m not holding my breath.

    For the original article, and more like it, feel free to visit the Trial by Fire.