"...President Obama’s current solution is to give the big banks money, if they need it."
Dear friends,
Now that President Obama’s Stimulus Plan is in force the obvious question is: Will it work? In a previous post I insisted that it would not. However, I waited until its passage to elaborate more on why it cannot possibly do anything but repeat what has been happening ever since 1873.
As I mentioned in the earlier post, President Obama is going to put lots of money into the hands of big banks and very large companies. He is not sending out money to individuals, as George Bush did. Rather, Obama is giving the money to the parties to whom he feels beholden - directly. There is no pretense.
Nevertheless, the main problem is: Ever since the end of the Civil War, big banks began to take on a new role. That is, they started loaning money to large companies, so that the latter could maintain operational costs like wages and inventory, with the intention of the former receiving payment that included interest from the latter in the near future. Also, banks started lending money for investments like new industrial facilities. Such practices re-defined the way that businesses work, since now, instead of worrying about gaining capital based upon performance (known as industrial capital), large companies could appeal to banks to “watch their backs”, as it were. This kind of capital is called finance capital. Unfortunately, it (finance capital) also allowed certain companies to be able to monopolize entire industries. So much for “free enterprise”.
To be sure, during the late-19th Century, all of this made a lot of sense, because ships (also financed by the banks and insured by the giant insurance institutions) were being sent to places like Ireland, Poland, and Italy in order to bring people here to work in all of the factories that finance capital was allowing to be developed. Of course, it is interesting that such “affirmative action” was used that way. After all, millions of African Americans, former captive workers (so-called slaves) were already here languishing on Southern plantations as “sharecroppers” (a situation that didn’t end until around 1965).
In any case, the dilemma which occurred then, as well as now is: The banks were stretching their coffers to the point of insolvency, since, if one of the large companies mentioned above did not procure the amount of revenues that had been expected, then that enterprise would not be timely with repayment. Meanwhile, workers would have to be laid off and, consequently, production slowed, so that money could be freed up to go towards paying the banks. Of course, the companies do not always give the aforementioned money to the banks, for whatever reasons.
So President Obama’s current solution is to give the big banks money, if they need it. Wow! How “neat”. Presumably, they will then be able to “help” either new or current clients (i.e., companies). Additionally, he will give money to specially-chosen large corporations. The question then becomes: How will President Obama deal with the next inevitable “economic/financial disaster” cycle? Will he simply print up more money, at our expense, and pass it out to the same parties? Or, will he show leadership and courage, allowing citizens, instead of the market, to make our own course? Perhaps, that is why he has not made a peep about getting rid of either The Patriot Act or The Homeland Security Department. Let’s face it. It seems like the government would not want folks getting any crazy ideas like wanting to determine their own destinies. Eh?
One Love,
G. Djata Bumpus
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