And so it has begun, a phony foisted crisis created out of whole cloth has now become real. The partisans played political games of chicken to see who could stick their fingers closest to the fan have now been stung. Capitalism will now cull the herd and sentence more of the innocent to poverty and hunger.
It has upon closer inspection the look of a desired intention — the Tea Party, the debt ceiling and the President. The Tea Party is an imaginary creation headed by out of work Republicans. It claims that it is aligned with the Republicans but not of the Republicans. Its purpose is to distance itself from the Bush Administration, the Bush debts and the Bush wars while still advocating Bush tax cuts and Bush economics.
These are more truthfully barbecues for vegetarians, gays for Michele Bachmann, and those screwing for virginity. These politicians have the look of Republicans, the talk of Republicans and vote like Republicans and yet, they claim independence from the Republicans. They claim to be both fish and fowl; they supported a continuation of the Bush tax cuts while at the same time advocating the need to cut the budget deficit. They favor higher defense spending and want all the budget cuts to come from social spending, and they become apoplectic over any proposed tax increases.
They push hard right policies and excoriate traditional Republicans who make any concessions or accommodations. In the White House, we have in Obama, a moderate center-right Republican who ran for office as a moderate Democrat. Obama governs with Republican policies while being painted as a liberal Democrat by the Republicans and this impression is parroted by the complicit media corporations. No matter how far Obama moves to the right, he will always be painted as a liberal or even as a Socialist. In truth, Obama throws Mardi Gras beads to the left and gold bracelets to the right.
Obama’s health care reform was wrapped up with ribbons and bows as a gift to the poor and struggling, but was actually a give away to the insurance and hospital industries. Tax credits to buy new homes were a sop for the home building industries. Cash for clunkers was a plan once tried by the Ford Motor company during the 1930s. A glut of used cars on the market drove down used car prices. New car sales plummeted because the prices on used cars continued to fall while the price of new cars was fixed by cost. Ford began to buy up used cars and crush them in an attempt to eliminate the glut, but it failed as the falling prices only illustrated the dire straights of the economy.
This time around the Obama administration replaced Ford Motor Company and the net effect was a temporary bump in new car sales and increased prices for used cars for those unable to afford to purchase new cars. It also illustrates Capitalism’s primary weakness; it pits people against each other in our society. In an attempt to assist auto companies, the Obama administration rewards the affluent and punishes the struggling. We live in a corporate welfare state, a ruling triad of center right Obama, traditional right Congress and hard right Tea Party/Republican Congress. When viewed in this light you can see the importance of the imaginary Tea Party.
The more the Tea Party pushes, the lower their popularity numbers fall and Republicans in Congress are able to play a now you see them, now you don’t game. When it suits them, the Tea Party members appear in the media as Republican statesmen while shaking the crazy stick on other more partisan media outlets. Balking at raising the debt ceiling was a creation of the Republican/Tea Party, an opening salvo in the Presidential campaign. Suddenly, just six months after the same Republican/Tea Party interests pushed to continue the insane and senselessly expensive Bush tax cuts, they draw a line in the sand over raising the debt limit.
Obama, in his role as professional punching bag, folds on the Bush tax cuts. He appoints a committee to address deficit reduction stacked with opponents of social programs and then declares its forgone conclusions as a good place to start. On the very day the Congress begins debt ceiling negotiations, Standard & Poor’s announces that an unsuitable outcome to negotiations could cause the US to lose its AAA credit rating. Why would they make such an irresponsible announcement if not to improperly influence the negotiations?
The Obama administration reacted by giving Congressional Republicans more than what they had asked for, then the administration was faced with a revolt from his own party! John Conyers complained that Obama was behind proposed cuts to social programs more than the Republicans were. The traditional and hard right Republicans called Obama’s position intransigent, but then, they always do. The Republicans began by calling for $4 trillion in cuts but Obama answered by drawing a line in the sand and offering $3.7 trillion.
It was the classic Hollywood standoff with the mission of scaring of the plain folks and those dependent upon Social Security checks. Then with a Mighty Mouse conclusion, the White House and Congress reach a prearranged eleventh hour solution. Obama claims victory, the Republicans claim victory and the Tea Party claims victory. By this time the international markets were spooked, European debt problems and Asian inflation problems were made worse by the creation of a debt problem that wasn’t really there.
Wall Street’s recovery since the collapse of 2008 had been based entirely on easy and nearly free money from the Federal Reserve. Austerity means less money, lower profits and a bear market and Wall Street was awakened from the sleepy dreams of TARP and Quantitative easing which pumped literally trillions of dollars into the banking industry for fractions of one percent interest. With interest rates kept so artificially low, there is little money to be made in traditional banking. The money was forced into Wall Street and other speculative markets as it was the only game in town for investors and since everyone is buying in, what other way could the stock market go but up?
The US economy as a whole has languished, with over ten million home foreclosures and a fourteen trillion dollar commercial Real Estate crisis. In California, hotel repossessions rose by 91 percent and in Silicon Valley, the floor space equal to two Empire State buildings lies empty. Real unemployment in
the United States is close to 20 percent and forty-six million Americans are now receiving food stamps. The problem is simple: the solutions taken by the government are in a word, wrong. A society based on capital creates decisions based on capital rather than out of any concern for the people.
The Hoover administration tried austerity in the face of a collapsing economy and it failed and Wall Street knows that. This is the clash of ideologies: center right, traditional right and hard right. Obama has cut more taxes for business than Ronald Reagan, he has given more money away to big business than Herbert Hoover, and now the hard right declares the era of austerity and all bets are off. They have broken the fragile illusionary spider web of recovery and now the collapse will accelerate.
In a fit of unmitigated hubris, the Standard & Poor’s rating agency has cut the US credit rating to AA+. Is it hubris, or is it intentional? In the claws of Capitalism somebody always wins. Ten million home foreclosures plus a million more expected this year equal the largest transfer of assets in human history.
Higher rents and lower tax deductions for the middle class means forty to fifty million Americans who will now pay those higher taxes, higher rents and become Americans who are less likely to vote.
Standard & Poor’s cut the US credit rating on Friday evening, giving the markets the weekend to think about it. On Monday morning the market begins to fall and at ten o’clock S&P announces specific cuts to other government backed lenders. Then around noon, S&P announces still more cuts to Fannie May and
Freddie Mac. The timing had all the looks of the intentional kicking of the market, dropping the bad news in bomblets. The downgrade of the credit rating will move through the secondary markets and municipal markets. Cities, counties and states will now pay more to borrow money at a time when they can least afford it, at a time when revenue is tight, and with austerity plans it will decline. The snowball rolls down hill and gets larger.
As the markets fall, these commercial investors who made their profits speculating in an artificially inflated market can rest easy. The people of this country who have worked every day of their lives must tremble with fear. The system of government and finance which pits man against man will have clear
winners and clear losers. A system whose blood is money guarantees the victory of blood money.
Benito Mussolini once said, “Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.” So when an illusionary faction in a political party claims that it is not of that political party creates a political crisis which then becomes a manipulated financial crisis, what would you call that?
After more than two years of a pump-and-dump stock market and with quantitative easing now at an end, what would a Corporate Fascist party promote to advance their own goals? The collapse of Wall Street and the corresponding rise in gold means that for those on the inside the harvest came early. The long term goals of the so called Tea Party are a revision of the tax codes; Obama offers
them cuts in Capital gains and corporate tax rates and cuts to social spending.
Obama began his news conference Monday by claiming the Standard and Poor’s downgrade was incorrect and said, “Investors still thinks America is a AAA country.” The President then declares Standard & Poor’s to be wrong, yet before his own words have time to hit the back of the room the President said, “I hope that Friday’s news motivates lawmakers to make the hard choices for a long term
solution.” Obama supposedly spoke to the public to calm their fears and then used the event to compound them, to use the economic fear to gain a political goal.
Locked arm-in-arm, the traditional right, the moderate right and the Tea Party right, are pushing the economy towards draconian budget cuts. The worse the economy gets, the greater the pressure to do the wrong thing as Corporate Fascism marches on only… this is the beginning of a new day. The kindly benevolence of Capitalism has become an ugly shouting match that is waking those still sleeping, and makes it possible for a better world to come to into being. The death throes of Capitalism are the labor pains of Socialism.
“If you who own the things people must have could understand this, you might preserve yourself. If you could separate causes from results, if you could know Paine, Marx, Jefferson, Lenin, were results, not causes, you might survive. But that you cannot know. For the quality of owning freezes you forever into ‘I,’ and cuts you off forever from the ‘we.’” — John Steinbeck
David Glenn Cox is a staff writer for TLR and an award winning author and musician; he is the author of the novel, The Servants of Pilate.