Can capitalism survive the current world economic crisis?

"...under the current capitalist model, the performance of big companies, from time-to-time meet a dead end, because, at some point, the continuous seeking of profit in and of itself, with no concern for how the success of the business relates to progress of people in communities - aside from the latter’s consumption - and how people live, will, invariably, lead to the dilemma where the “market” must necessarily reach a 'saturation point',.."

Dear friends,

The big banks decided back in the late 19th Century to allow businesses to depend on them for capital (called finance capital), rather than the latter getting their own capital (called industrial capital) by earning it. Actually, only the largest companiies of certain industries were given the privilege of getting finnce capital. It was a neat trick, because it meant that no one smaller could compete with them, since they (big companies) did not have to worry about waiting for revenues to keep daily operations, buying new equipment, setting up subsidiaries, or providing paychecks for their workers. As a result, monopolies were formed that made sure that there was no "free market".

Yet, under the current capitalist model, the performance of the big companies, from time-to-time meet a dead end, because, at some point, the continuous seeking of profit in and of itself, with no concern for how the success of the business relates to progress of people in communities - aside from the latter’s consumption - and how people live, will, invariably, lead to the dilemma where the “market” must necessarily reach a “saturation point”, as it were, where there are either less or no customers (i.e., consumers), since there will come a time when people will not buy, if for no other reason than the fact that everyone has all of that particular items that they want. Hence, the constant wars in which, especially, the US, Britain, France, and Germany engage, so that they can establish new markets (i.e., new consumers).

In other words, you cannot have an infinite growth of the market, because there are only so many consumers who will want a product. Then what do you do? People who are really thinking about the future of humankind have to change the values of society, so that the market reflects those values, instead of vice versa (which is where the US ad other big capitalist nations now stand). But that means giving up either power or wealth to maintain legitimacy. To be sure, the Bush family and others shun that idea.

G. Djata Bumpus Read full post

Was George Carlin right?

"By the way, George Carlin, a contemporary of Richard Pryor, at least to me, was often as insightful and funny as the beloved Pryor..."

Dear friends,

I read this piece on the blog of a buddy of mine and thought that I would share it. It reminds us of the reality with which we are all familiar, regarding our nation's constant economic predicament.

By the way, George Carlin, a contemporary of Richard Pryor, at least to me, was often as insightful and funny as the beloved Pryor.

Cheers!

G. Djata Bumpus
http://www.lewrockwell.com/cooper/cooper8.html Read full post

The Federal Bailout - a panoply of illusions (originally posted 12/11/08)

Teacher: Consider, oh child, whence these talents?
You cannot have them from yourself.
Child: Well, I have everything from Papa.
Teacher: And he, from whom does he have them?
Child: From Grandpa.
Teacher: Now look! From whom did Grandpa get them?
Child: He took 'em.
(Johann Von Goethe from "Katechisation")

Dear friends,

At the heart of the present world crisis in both banking and business is the illusion that value is something outside of what is socially accepted as such. Here, of course, I am defining an illusion (which should not be confused with the medical term “delusion”) within the Freudian context as: An idea or belief that is based upon wishful thinking that has no relation to reality, and does not admit to needing such a connection.

Nevertheless, roughly two and one-half centuries ago, Italian political economist Fernando Galiani insisted that “Value is a social relation.” For example, if you fill a room with either gold bullion or billions of dollars in cash, neither has any value, unless, at least, two human beings engage themselves with either of the aforementioned items during a process of exchange.

In other words, the value of any particular object or activity (i.e., commodity) is solely based upon imaginary notions of “value” that are concocted by buyers and sellers alike during commercial transactions. After all, as a dear friend of mine, Denny Wolfe, says: Other than the three elements that we call oxygen, hydrogen, and carbon, which in combination provide sustainable life to both fauna and flora, no substances or objects on Earth have intrinsic “value” for us.

On a more tangible level, for humans, it is food that is the most significant matter that has intrinsic value. Consequently, in his classic book called "The Principles of Black Political Economy", Professor Lloyd Hogan insists that food, which he also calls the “elixir of life”, is "wealth in the abstract".

All people, regardless of either income or social status, must eat in periodic intervals or surely we will succumb. Period. Moreover, unless we are farmers, we must acquire our food by exchanging something for it that is useful to the seller of food. The item of exchange must not only be of use to the seller of the food, but it also must be of use to the seller of whatever the food-seller needs other than food - since it is presumed that this food-seller already has enough food and is merely selling surplus product(s) in order to acquire other things.

Hence, a universal item of exchange is needed. That is, an object or substance must be agreed upon that represents value in the abstract. Food is perishable; therefore, it has to be something that can withstand time. Gold once served that purpose, meaning all commodities shared the same quality in relation to gold, only quantitative factors, regarding how much gold any particular commodity represents was the issue.

And so, this is where money – like Dorothy in Oz - appears in the marketplace. In other words, it is not something "inevitable"; rather, it is pure chance. This is particularly so, because at the point of exchange, the food-seller mentioned above simultaneously alienates himself or herself from his or her ward (food commodity) and transforms it into that universal exchange value (money). At this point of metamorphosis, even the outward appearances disappear, only quantitative factors distinguish the values of commodities. That is precisely why any phenomenon can serve as money (e.g., paper, gold, plastic cards, and so forth).

This also explains why the Federal Reserve System can create money, like gangsters in a cellar, regardless of whether or not the aforementioned currency has any value to it outside of its name. But the more money that you "make", the less valuable existing money becomes. That means that the value of the money is inflated. Most people think of "inflation" in terms of "price". However, a higher price is only the affect that inflating the economy with more dollars has on the representative value of any given commodity. As a matter of fact, ultimately, it is military puissance that determines the validity and value of money. It is sad to say.

Knowing this, nevertheless, a handful of unscrupulous billionaires met on Jekyll Island (Georgia) in 1913 and formed the Federal Reserve System. However, they could not do it by themselves, so they got some seedy politicians to support their endeavor. In the wake of industrial capital being replaced by finance capital (banks fronting money to businesses in lieu of the expected future earnings of the latter), this was the grand opportunity to make sure that overall competition in US banking - and industry - was almost non-existent.

To be sure, it also allowed big banks and companies to determine the progress of the economy based upon their profit margins. That is why whenever we hear that the "economy" is doing bad, it simply means that the profit margins of the aforementioned large enterprises are not as favorable as their owners/managers wish them to be. The labor of everyday people makes the economy, after all. Therefore, as long as folks are healthy, how can the economy be bad?

One of the difficulties in maintaining a healthy economy is: There is no "free" market in the United States. Instead, combines, monopolies, cartels, and other such organizational forms eschew competition. Yet, free competition presupposes free trade. Free trade presupposes a free market. So about what is all of this talk of “free” enterprise that gets bandied about so much in this country through the opinion-making, government- and corporate-controlled mass communications media?

Moreover, today, both our federal government and the corporate media promote the word capitalism as a concept that can be used interchangeably with terms like freedom, democracy, or the magical phrase "market economy." Due to the illusions of politicians, businesspeople, and the overall citizenry, the idea of capitalism as "eternal" is popular as well.

“...the notion of ‘obedience’ to the ‘natural laws’ of a free-market economy has been represented not as reflecting solely the dictates of prudence and the calculus of self-interest, but rather as possessing far loftier ethical overtones. In times of economic crisis this residual naturalism inhibited business and political leaders from ‘interfering’ with the supposedly unalterable laws of the market: its principles were thought to be ordained by nature rather than by men, and men believed that to violate them was to court social disaster. Only the severe breakdown during the Great Depression effectively destroyed this archaic naturalism and prepared the way for the widespread acceptance of a managed capitalist economy in which market mechanisms are assiduously manipulated through the offices of government." - The Domination Of Nature, by William Leiss

Currently, we are in a similar situation as the Great Depression economically. However, the general population is exponentially more educated (only about 3 out of 8 people even finished high school, in those days). Presumably, one would then think that that means either power or wealth will have to be relinquished by the government, banks and corporations, in order to maintain their legitimacy. Yet, that does not seem to be the case.

Please remember, that the whole purpose of the original North American venture by the British ruling class was to extract as much wealth as they could from the land and animals (both human and non-human), for the good of their class - not their so-called "race" (another illusion).

Nevertheless, beginning with the complete falsehood about “Pilgrims” coming to this land in order to be able to express their religious beliefs more freely, while, for generations, their alleged descendants fought “Indians” over “un-inhabited” territory, North Americans have lived under the illusion that the United States was always the United States, it just had another name.

Still it has been up to those in power to remain so. As Professor Hogan explains, "It must be emphasized that Wealth Accumulation is not done in the abstract. Indeed, it must be carried out by the exercise of the conscious will of people acting in the role of wealth accumulators. These wealth owners have the onus of preserving the form of their wealth while, at the same time, striving to increase its magnitude. Just as important, is the necessity for continuous control over the Wealth Accumulation Process by the wealth owners”. (Hogan, ibid.)

But the “Bailout” is using taxpayers’ money, we are told. "Taxpayers' money?", I ask. It is taxpayers’ sweat and blood! It is an illusion to either think or believe that a great deal of the money that the federal government absconds from us under penalty of law goes towards the commonweal. Besides, does all of this mean that the big banks and companies are saving their own money, while they waste ours? Well, perhaps, that just means that, as Professor Hogan has insisted, they are simply doing what they are supposed to do, that is, protect their wealth.

Finally, at least to me, the biggest problem with any illusion is: It can neither be proven nor disproven. This is especially true, because, occasionally, illusions are realized. For example, state lottery games and gambling casinos proliferate, because so many people are willing to embrace their illusions of acquiring great wealth and prosperity, at almost any cost. Yet, there are people who actually “hit”, now and then. The banks and corporations, along with their servants in the US Congress are certainly hoping for that to be the case with the "Bailout". Therefore, it is an outright lie for Krugman, Wolfson, Bernanke, or any of the other apologists to suggest that any of this is about either logic or reason, much less that it makes sense. In any case, it will not work.

Cheers!

G. Djata Bumpus Read full post

Obama's "State of the Nation" address ignores reality (originally posted 2/24/09)

"...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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Black Church Puts All of Its Assets in Black-owned Bank

"Johnson said that this move represented a desire to contribute to the economic development of the African-American community. He also spoke of the warmth of doing business with a black-owned business.,,"

Dear friends,

On the link below is a beautiful piece by one of the Philadelphia Daily News' standout columnists, Julie Shaw. The story points to one of the ways that African American communities can truly develop ourselves by, through, and for ourselves. ENJOY!!!

G. Djata Bumpus
http://www.philly.com/dailynews/local/20091015_Bright_Hope_Church_puts_all_its_money_in_black-owned_bank.html
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Elmer Smith On Bernie Madoff's Recent Sentencing

"Additionally, perhaps, part of Madoff’s plea bargain was for the government to leave his wife and kids alone, if they did not want to hear him start singing like a grease monkey in a shower stall."

Dear friends,

If Bernie Madoff conspired with others, in order to pull off a 60 billion dollars Ponzi scheme, then it would seem reasonable, at least to me, that along the way he encountered - if not colluded with - people who were/are either directly linked to our federal government or, at least, in some way connected to it. Would he then also know about other happenings involving the US government’s shady dealings and contractors, for instance? Maybe the powers-that-be just want him to shut up. Additionally, perhaps, part of Madoff’s plea bargain was for the government to leave his wife and kids alone, if they did not want to hear him start singing like a grease monkey in a shower stall.

Nevertheless, as far as I am concerned, the inevitable trillion dollars-plus “Bailout” for big banks and companies makes Madoff’s “take” of 60 billion dollars look like chump change, especially since our government has both the right and threat capacity (police and military) to legitimize printing up as much money as they see fit, at any time. Dig?

In any case, on the link below, you will find an inquiring piece from my very dear friend Elmer Smith who is both a columnist and member of the editorial board of the Philadelphia Daily News. Here, Elm questions Bernie Madoff’s recent sentencing. Check it out!

G. Djata Bumpus


G. Djata Bumpus
http://www.philly.com/dailynews/columnists/elmer_smith/49489737.html
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Smith on the progress of the "Stimulus" Package

"...the only "stimulus" that has been mentioned by the government seems to be about big banks and companies getting billions of dollars of "bailout" money. What is going on?"

Dear friends,

Throughout the recent presidential campaign and all the way up to the inauguration we heard about part of the new administration's "Stimulus Package". Supposedly, it would involve a massive employment projecct for "infrastructural improvement" like repairing roads and fixing old bridges.

Yet, the only "stimulus" that has been mentioned by the government seems to be about big banks and companies getting billions of dollars of "bailout" money. What is going on?

Fortunately, on the link below, the incomparable Elmer Smith of the Philadelphia Daily News provides us with some clarity.

Cheers!

G. Djata Bumpus
http://www.philly.com/dailynews/local/20090609_Elmer_Smith__To_see_stimulus_at_work__follow_the_______if_you_can.html
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Brief note to the New York Times about the "Economy"

"...the intention for infinite growth in a finite market of consumers must necessarily go bust, at some point."

To the Editor:

The article called “Geithner Calls for Major Overhaul of Financial Rules” By EDMUND L. ANDREWS and LOUISE STORY, Published: March 26, 2009, proves that neither Obama nor anyone in his administration knows anything about the financial system, much less how to improve it. The problem is not hedge funds or “greed” on Wall Street. Rather, it is the proliferation of finance capital which allows businesses to survive even when they are no longer creating customers. Moreover, the intention for infinite growth in a finite market of consumers must necessarily go bust, at some point.

G. Djata Bumpus
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AIG giving back money...what's that all about?

"At least to me, from "gay marriage" to "global warming" to the latest red herring issue "AIG bonuses", our federal government has yet to provide any relief to everyday citizens, in a variety of areas..."

Dear friends, At least to me, from "gay marriage" to "global warming" to the latest red herring issue "AIG bonuses", our federal government has yet to provide any relief to everyday citizens, in a variety of areas. Only the big banks and equally large businesses from here to Europe seem to be receiving benefits. Meanwhile, the consistently useless politicians of the US Congress are cashing in on our illusory "tax dollars", by holding "committees" and other such nonsense about making sure "the people's money" is being spent properly. Right.

What a laugh. The same Congress that enabled the impropriety now has imposed punitive taxes on the same people that the former were claiming to be helping by authorizing the "Bailout" in the first place. Worse yet, at least some of these people who received bonuses are not even in this country. Moreover, what will "giving back the money", which is 165 million dollars out of a “Bailout" package of almost 800 billion dollars, do for the current economic shortfalls of Americans?

The fact of the matter is: none of the "Bailout" money has any genuine "value" anyway. That is, through unconscionable maneuvering that makes Bernie Madoff look like a petty thief, the president. Congress, and the Federal Reserve Bank, like gangsters in a cellar, are simply printing up more and more money and giving facilitating more and more credit to big banks and companies.

And so, , for example, Treasury Secretary Timothy Geithner said about one aspect of the "Bailout", called the Supplier Support Program, "...will help stabilize a critical component of the American auto industry during the difficult period of restructuring the lies ahead...The program will provide supply companies with much-needed access to liquidity to assist them in meeting payrolls and covering their expenses, while giving the domestic auto companies reliable access to the parts they need."

In other words, the "Bailout" money is simply more finance capital (please peruse my post called "The Federal Bailout - a panoply of illusions", re-posted on Tuesday, Feb. 24, 2009). Allowing banks to control the flow of capital of businesses will, inevitably, lead us right back to the present situation. Businesses must perform. Otherwise, let them go out of business! That is the way that it works for ordinary (i.e., smaller) businesses, after all.

Still, it is no accident that former Treasury Secretary Henry Paulson who was Bush's guy and Geithner both have intimate connections with Goldman Sachs, a recipient of "Bailout" dollars. So why is Goldman Sachs not being asked to return their "Bailout" money, in what is so obviously a conflict of interests? Meanwhile, the other day, Bloomberg.com reported, "March 18 (Bloomberg) -- Goldman Sachs Group Inc., the largest U.S. securities firm to convert to a bank, closed above $100 in New York trading for the first time since Oct. 24 as investors gained confidence the company will become profitable. "

Finally, we are being told that American taxpayers own 80% of AIG? They also told us about Santa Claus. It is only military might that matters. Everything else is hogwash. That answers the question from my dear friend in the previous post.

One Love,
G. Djata Bumpus
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Elmer Smith on Madoff versus Ali Baba and the rest (originally posted 1/28/09)

"It's hard to gauge another man's needs. But after the first $30 billion or $40 billion, you'd think he could push back from the table..."

Dear friends,

There has been much fanfare, deservedly so, about Bernie Madoff, a person who is accused of bilking investors out of some $50 billion. On the link below, the incomparable Elmer Smith of the Philadelphia Daily News articulates this whole affair, as only he does. Enjoy!!!

G. Djata Bumpus
http://www.philly.com/dailynews/local/20090116_Elmer_Smith__Madoff_deserves_respect_-_from_other_inmates_serving_life_terms.html
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What is really going on with the Auto Industry?

"...every one of us must carefully scrutinize American businesses to see if they are actually working in the best interest of the nation, or only themselves..."








Dear friends,

The current “help” for which the Big Three US automakers are asking from our government would not be so, if they did two things. They are: 1) Appreciiate the fact that the purpose of a business, if it wants to last, is to "create customers" - not maximize profits. In other words, if the only interest of a business is “profit-maximization”, then the results will not be any different than they are for an illegal drug dealer. To be sure, the “entrepreneur” just mentioned is only thinking about NOW - not the future. It should be no surprise then why the business of drug dealing always ends the same way: Dead. 2) "Innovation" should be part of the operation of any business that plans on being competitive. That is, if a company is not constantly striving to refresh both what it produces or services and the way that it then provides and distributes its commodities, it will, eventually, begin to lag behind other companies in its specific industry.

Nevertheless, on the link below, Fatimah Ali of the Philadelphia Daily News - who, as far as I have experienced - is not one to smooth over her beliefs - provides a brilliant analysis, regarding the quandary in which Ford, Chrysler, and GM currently find themselves.

Cheers!

G. Djata Bumpus
<http://www.philly.com/philly/opinion/20081209_Fatimah_Ali__Detroit_s__Model_A__mindset.html?adString=ph.opinion/opinion;!category=opinion;&randomOrd=121108101536
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