Why the left should support the bailouts

Socialist Unity

If the left publicly opposes the bail out of the banking system, so that we are actually encouraging the collapse of the economy, the tens of thousands of redundancies that would entail, the poverty and homelessness, then we just prove that we are idiots who should never be listened to.

There are, I think, three main reasons why some on the the left oppose the bailouts.

1) It’s a hoax, the crisis is not real, Naomi Klein is right. It’s disaster capitalism, a mild problem exploited for political gain.

Response: After the collapse of the biggest mortgage players in the US, the biggest insurance company in the world, several major US investments banks, a major German mortgage lender, a Brit bank or two, and Iceland, only the most Black Helicopterish would say this is somehow a manufactured crisis.

2) It helps the rich only.

Response: Bank failures and credit market freeze ups affect everyone. Call me crazy, but I like going to the ATM, withdrawing $100, and having the machine give it to me.

3) A collapse would mean the end of capitalism and thus the birth of a glorious new day for socialism.

Response: This is the unfortunate subtext of why some lefties oppose the bailouts. They want the system to collapse, and are secretly cheering on this “crisis of capitalism.” That millions would suffer during such a collapse with no guarantee they would turn to socialism just shows how deluded and self-serving such lefties are. Inept too. Standing on the sidelines clucking about how Marx (or anarchist theory) predicted this would happen, instead of coming up with answers that will help those worst affected, is worse than useless.

The current crisis is a perfect organizing platform for the left. Everything they’ve been saying is right out in the open. Class. A tiny few grabbing the money. The bulk of the population getting screwed. But to organize on it, they need to leave the leftie enclaves and make themselves useful to those who are getting shafted. That’s how to build a mass movement. First, help them. Then deliver the message. Not the other way around.

  • cheryl

    If you get a chance – listen to this week’s This American Live on NPR. SOme interesting info. They not only explain what was happening on Wall Street but what caused it and what could possibly fix it and what could prevent it from happening again.

  • Why support the bailout when there is no guarantee in Hades that the money will ‘tickle down’ to the working people trying to survive a mortgage or what have you.

    Why not argue that IF you are going to expend that amount of money to bail out anyone — spend it on the most deserving while nationalizing finance capital “to the nails in the soles of their boots ” (as Castro once said).. The feature you miss is that the bail out only addresses the symptom. That’s all — and at that there’s not one guarantee that it will deal with that in way of flow on…or it will work becase there’s no supervision built in.

    As tWanda Sykes has wisely noted: “Poor people are bailing out rich people…It’s welfare for the rich!”

    So do you then argue that this ‘left’ should oppose the protests and mobilisations around the country dedicated to demanding “no money for Wall Street!”. Don’t you think that’s a good and progressive perspective? Don’t you think thats’ the way to proceed?

    The Bail Out is only an answer relative to all the other loses on the finance market because that’s capitalism’s preferred fix at the moment. Foreclosures, bankruptcies and the like are embedded in the system and happen every day of the week. The Bail Out is a quick fix to salve the consequence of a diseased system of capital management.

    To campaign FOR the Bail Out would be a disastrous political tactic because it will obscure who is at fault. Anyway the Bail Out will proceed because thats’ the one option the system has at its disposal –so let it stew in its own contradictions.

    (I fear you are a touch shallow on your understanding of Marxist economics as this snippet of fact may enlighten you in regard to the burgeoning mountain of Fictitious Capital: In 1980, world financial assets (bank deposits, government and private securities, and shareholdings) amounted to 119% of global production; by 2007 that ratio had risen to 356%. Even in the 1980s, the US Treasury spent $124 billion on rescuing the savings and loan industry . So shouldn’t you also argue , that this sort of intervention should become standard for managing US finance capital? That what we need is a return to Keynesianism or something –as thats’ your logic.: Capitalism with fetters.)

    “The current crisis is a perfect organizing platform for the left” because it had to come to this not because it is something to be welcomed as a bit of system management but because the system had no choice in the matter because thats’ its usual way of doing business — bailing out its mates.

    The same argument could be also advanced in regard to Iraq & Afghanistan: [Obama]”We’ve spent $750 billion on these wars but to save the effort from ruin we need to spend another $700 billion.”

    Or down at the local Casino — “Shit! I lost $700 billion on the poker machines, give me another $700 billion so I can keep on playing otherwise my kids will starve.”

    Or consider the confessional:” Bless me father because i have sinned and squandered billions of the family estate. Please don’t give me penance — just give me another go and see if I can do better next time.”

    And while you’re at it why not bail out the banks in Ireland, Germany and Iceland who are also going under…Hell! why don’t we just give em all a bit of cash so that they can all end their year in the red. Neo-Capitalism relies on the state to do it anyway anyhow so let’s cut through the crap and pay the money up front and in the open this time around.

  • Simon

    I have nothing against A bailout, but this one was just not done properly… here’s what I think.

    You want 700 billion? Don’t worry, we’ll give you a 1000 billion or more!

    Whats the interest rate the average Joe pays on his/hers credit/mortgage/loan?
    The same will apply here… the repayment of this bailout (credit for all the rich guys) will follow the same rules, repaymnet into a fund where by the end of each tax-year, the total sum will be divided by all taxpayers in the country. If WE the PEOPLE are giving credit, WE the PEOPLE should collect the interest… after all, it’s what they do.

    Don’t leave it in the hand of those guys in Washington, a fund will be created, some capital will be maintained for when these guys mess up again in about 70 years (1929-2009-2079) and in the meantime we’ll collect our profit from the crisis…

    P.S. This is the right wing version.
    Left wing version is to permanently and indefinitely cap profits for banking institutions at US$ 1 per employee and all the rest goes to the fund, but I’m just that nice guy 😉

  • The current US bailout is vague and Paulson has made no effort to explain it. Not sure how it would help. So I don’t support that one.

    But something is needed. If the credit markets don’t unfreeze quickly then thousands of businesses are at risk of failure. That means millions will lose jobs. It’s hard to see how that helps anything.

    If I, an American who was in a Marxist group for a while, has a foggy view of socialism, then maybe that shows just how difficult advancing socialist ideas is in the US. Most people here know little about it and want to know even less.

    I think it’s JP Morgan who holds $8.1 trillion in notional value of financial instruments. Yes, it’s madness.

    Are you saying a socialist government wouldn’t intervene massively in such a crisis too?

  • your website is good but i think this post is highly questionable. support the bailouts? Dave Riley’s response already exposed the sheer insanity of that, i just want to respond to the idea that we as leftists should want to preserve capitalism.

    nonsense, the system is responsible for all the horrors we’re against.. war, environmental destruction, oppression of women and nationalities, and yes, poverty. there has never been, nor will there ever be again, so many people living on the brink of starvation, in horrible poverty, as right now, at the height of global capitalism.

    why? because the system requires the exploitation of those on the bottom for the luxury of those on top. the end of capitalism can ONLY be a good thing in the long run for the huge majority of humanity and the planet, just as was the collapse of the Roman Empire, Mayan, etc.

    does that mean we cheer the collapse, sit back, and wait for socialism to arrive? no, of course not. we organize, just like we always do. we do as you said, “First, help them. Then deliver the message.”

    exactly. now, how can we help?

    how about if some of that $850 billion went towards health care, or education (i’m a student organizer and college debt is skyrocketing, why not bail us out?), ending foreclosures, providing millions of green jobs for low-income folks… things like urban organic gardening, home weatherization, refitting suburbia to something sustainable, etc. that need to be done anyway? there’s unemployed people right there already in the community, just need the funds.

    bush vetoed $6 billion for children’s health insurance, then finds $850 billion for the largest and wealthiest banks.

    and what have they spent it on? well, AIG took a vacation to a resort and spent hundreds of thousands of taxpayer dollars with their bailout check.

    anyway, i’m sure everyone already agrees with all these points. the only one that i really want to stress is that there’s absolutely nothing inherently bad about the end of capitalism – the worst plague in human history.

    the only question is, what will replace it, a system trying to maintain the privileges of the powerful, i.e. fascism, or a system based on freedom, justice and democracy? it’s up to us to decide.

    students for a democratic society

  • DJ

    “the system is responsible for all the horrors we’re against.. war, environmental destruction, oppression of women and nationalities, and yes, poverty.”

    It’s good to know that China and the former Soviet Union have never had such problems as war, environmental destruction, and oppression of minorities. I’m sure the Soviet Jews, Tibetans and Chinese Muslims will be happy to hear that. And all those troops on both sides of the Sino-Soviet border for all those years were just vacationing. The polluted rivers of the Eastern block (China’s Yellow River is now one of the most polluted in the world)– well, that’s probably just America slipping something into the water.

    Oh, but none of them were doing it “our” way. If I was running the country, things would be different…

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