The latest bank bailout of start up speculators to stop a panic spread at banks again reminds the larger public that today’s capitalism is not capitalism at all. This is a repeat of the bailout of 2008, 2002’s dot com bubble burst, and the rescue of savings and loan banks in 1989. On top of that, there was a massive tax cut of 2017 for the corporate sector, corporate bonuses, cheap money for them to gamble with, and finally, stock buybacks (not investment in people)
I am supposed to scream — “Workers of the World” unite right here but it is futile. That might resonate in some countries but I live in America. People kind of don’t care as long as their Wi-Fi signal is strong and the coffee at their local Starbucks is hot.
Capitalism is not capitalism. Repeat: Capitalism is not capitalism. In capitalism, the whole point is you invest, take a risk, and if you lose, you’re done. An ex-NBA basketball player opened a restaurant night club in Washington D.C. years ago. It did fine for awhile and then it went out of business. I know others who had businesses for years and then one day, they were out of business.
Today’s capitalism is for the tiny few mostly. Big giant banks and insurance companies who have bribed and bought influence and had the rules changed in their favor. Even if they do dumb things and lose billions and effectively go out of business, they don’t go out of business. They get labeled “Too big to fail” and the government comes in with a lifeline of cash.
After the housing bubble burst and many big banks failed, they have actually increased their power. They now control 37 percent of banking deposits today as opposed to the 20 percent they controlled in 2008 at the time of the crash. They are too big and have too much power. The government is weak and corrupt on this specific issue and is not representing the people.
In 1979, the U.S. Congress bailed out Chrylser. Lee Iacocca famously begged for money and the U.S. government concluded that Chrysler was too important to fail. So, they bailed them out. At the time the automobile industry was in transition. It was no surprise they couldn’t hack it.
Competition from Japan automakers was putting pressure on the big automakers in Detroit. David Halberstam wrote about all of this in his book, The Reckoning:
Ultimately, for Chrysler, they got the money. Federal guaranteed loans that put the company back on track. No one gets treated like that in the world today but the tiny few, the corporate sector.
In 2008, when mortgage holding families needed such assistance to save their homes, they got nothing. They got an application to apply for assistance with no guarantees. Most people did not get saved.
Time to confront the new capitalism?
Back in the 1960s, the poet Gaston Neal feeling like Washington D.C. needed a political and economic upheaval remarked: “everybody is ready to riot here but the Black man who is supposed to start it.” Neal knew there was tension in the city, anger, and frustration. But who would start it? How would it start? Dr. King was murdered and the city exploded and part of the city was burned to the ground.
With this modern state supported capitalism that keeps the neoliberal model and the markets purring all day long without a worry, who will challenge it for real.
Vladimir Lenin (yes, I am about to quote a Communist, it is that bad, folks) described it like this in his book, Imperialism: The Highest Stage of Capitalism:
“Scattered capitalists are transformed into a single collective capitalist. When carrying the current accounts of a few capitalists, a bank, as it were, transacts a purely technical and exclusively auxiliary operation. When, however, this operation grows to enormous dimensions we find that a handful of monopolists subordinate to their will all the operations, both commercial and industrial, of the whole of capitalist society…” (Vladimir Lenin)
This is where we are now. America is run by the tiny few and it is not a secret. It is right in our faces. They are laughing at us.
When I was a Finance major in college, the banking industry was just in the first stages of deregulation. Small banks were quite important and your relationship with those banks was the foundation of your family’s future.
Now your family’s future and your future as a person and as a citizen seeking to provide sustenance for your family is in the hands of a tiny few, greedy, immoral ideologues, politicians, and reckless financial executives. They own the government. They own the state. Somehow we have to collectively change this paradigm. It is time to devote more time to that than worrying about government scandals and trolls on Twitter. Find out how to educate yourself and get involved.
This post was previously published on Brian G (aka ‘bumpyjonas’) – he/him.
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