Monday brought fresh news from the Class War Front. The stock market leaped forward nearly 500 points on news of another advance by capital. The president of the Securities Industry and Financial Markets Association – a spokesperson for big capital speculators – hailed the news: “For the first time in seven months, I can say they’ve done it right.”
What provoked this euphoria from markets and market players?
The Obama administration’s economic czar, Treasury Secretary Timothy Geithner, betrayed the majority standing on one side of the class divide and surrendered the government and the people’s resources to the banking industry. Of course Geithner disguised the massive betrayal as a necessary rescue of the financial industry, posturing the self-induced collapse of fictitious financial capital as the stumbling block for full recovery of the world economy.
Following the Bush administration and former Treasury Secretary Paulson, Geithner and Obama’s economic team locate the economic problem in the disposal of what, for lack of a better expression, economists have come to call “toxic assets”. While an odd choice of words, “toxic assets” does suggest that those responsible for creating them should be held responsible for eliminating them. But that would be logical and fair to the vast majority of the US citizens who had little to do with the financial mess. Instead, Geithner, dutiful to his corporate cronies, and enabled by a President either oblivious to the consequences or fully compliant, chose to socialize an enormous pile of crap created and unwanted by the private sector. The Geithner proposal would pull the virtually worthless paper residing in dusty corners of big financial corporations– untenable mortgages, securities constructed from these mortgages, and bets made on them - and place them back in the market place. As irresponsible as this may sound, Geithner would offer the big financial players bags of public funds to purchase this junk with the prospect of selling it at a later date for a profit. To reduce the risk to these players to next to nothing, the government would guarantee the loans secured for the purchase of this toxicity. As a result, those who would participate in this obscene plan would engage virtually no risk for the remote possibility of making a profit. Commentators agree that, at best, a private financial corporation participating in this scam would risk $7.00 for every $93.00 of public money. It’s no wonder that Wall Street and the financial sector have started their victory celebration. Cowboy capitalism is alive and well.
For details of this obscenity, one has only to turn to the writings of liberal economists Paul Krugman and James Galbraith. Their well-reasoned exposure of the Geithner deal is notable for its passionate and uncommon outrage at the plan’s audacity. Galbraith contends that there can be no other explanation for following the Geithner option other than political opportunism. The campaign contributions from the financial sector are simply too important to resist. The same could be said for the Administration and Senate’s tamping down of the outrage over the AIG bonuses. The good Senators are slinking away from answering the public anger and they’re doing it with the encouragement of Barack Obama.
The larger question is: When will this now one-sided class struggle be joined by forces equal to this challenge from capital? There should be no doubt that the outcome of the class war being waged mercilessly by capital will have consequences for working people that approach or surpass the damage from aggressive wars. Clearly there is a need for a movement on the scope of past anti-war mobilizations. Yet the organized labor movement has been unable to separate its cause from the rescue of capitalism, showing undeserved deference to the Obama economic team. Likewise, liberals have failed to find the energy to combat this economic assault on our future with the same fervor that they find for many of their single issues. Thus, the popular anger goes largely unorganized.
While this covert war on future living standards is masked by policy double-talk and technical jargon, a clear response is urgent: Geithner and his team must go!