‘Dr. Doom’ Roubini. ‘Karl Marx was right’

Economist Nouriel “Dr. Doom” Roubini, the New York University professor who four years ago accurately predicted the global financial crisis, said one of economist Karl Marx’s critiques of capitalism is playing itself out in the current global financial crisis.

“Karl Marx had it right,” Roubini said in an interview with wsj.com. “At some point capitalism can self-destroy itself. That’s because you can not keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand. We thought that markets work. They are not working. What’s individually rational…is a self-destructive process.”

This process is made worse by compliant, captured governments and an elite class mostly devoid of ethics and primarily concerned with looting the middle and lower classes. Roubini makes the key point that the Arab Spring uprisings are economic in origin. So, I would say, are the recent riots in Britain.

Roubini doesn’t think there will be an “imminent collapse” of capitalism but that we are definitely in one of those crises of capitalism that Marx predicted.

The Doomsday machine, a capitalism that doesn’t work

Green Party activist and sometimes Polizeros contributor Derek Wall, filmed at the Coalition of Resistance conference Nov 27th in the UK. “I believe in nonviolence, but if the windows have got to go, then the windows have got to go. Nonviolence is about defending life, it’s not about defending property. We have a capitalism that doesn’t work… We need imaginative direct action.”

Is capitalism doomed? – Part IV

Stuart Bramhall continues his series about capitalism and socialism

In general, Marxists believe the economic laws that govern capitalism make it inherently flawed – dooming it to eventual failure. They also see a grave risk that the collapse of capitalism will bring down civilization with it. Which is why they argue for workers to hasten its demise and prepare to replace it with some other form of social organization.

Yes, capitalism has been wobbling lately. But what many socialists (and anarchists) don’t get is that capitalism can and well reinvent itself overnight, if need be. “Socialists have predicted eleven out of the last seven capitalist crises” yet somehow capitalism keeps one.

Also, in an era where the state is demonstrably hollowing out, how can a monolithic state enterprise somehow revive itself then run things so as to benefit workers?

I think the socialist model made sense 100 years ago. I’m not sure it does in 2010.

The great depression and the revolution of 2017

Washington, 7 November 2017*. Yesterday Speaker of the House Dennis Kucinich was sworn in as President, replacing President Jeb Bush, who had fled to Riyadh, Saudi Arabia, aboard Air Force One seeking asylum in his father’s well guarded compound on the grounds of the Bin Laden family’s palace. Vice President Dick Cheney, who has been in a coma since August after suffering his fifteenth heart attack, was declared incompetent. President Kucinich immediately announced a wide-ranging package of policies designed to bring an end to the Great Depression, which began with the global financial crisis of 2007. He called for calm and pleaded with leaders of the Revolutionary Tea Party Army that has encircled Washington to call off the attack that had been planned for today, the 100th anniversary of the Bolshevik revolution. Commandant Dick Armey said he is willing to meet for a discussion of a ceasefire so long as his militia can take their weapons home.

President Kucinich apparently ordered the Marines to invade Goldman Sachs headquarters in Manhattan early this morning. While there were some reports of small arms fire, most of the 6000 employees were reportedly removed without struggle and are on their way to various jails and prisons in the greater New York area.

Be still my heart.

*Disclaimer: Some of the events reported here have not been fact-checked**.

**Disclaimer: Actually, none of the events reported here has yet occurred, although some are quite likely.

Indeed, it’s clear capitalism isn’t functioning at all well now. Unemployment is soaring, people are losing homes, and incredibly, the threat of sovereign defaults looms. All this was result of a greed frenzy, aided and abetted by comatose governments, which ended up cratering the economy.

But if capitalism isn’t working, then what would? Some say what we have isn’t capitalism at all, or certainly not what was envisioned by Adam Smith, but more like theftocracy, with a wealthy class siphoning off money from the rest of us. Indeed, the gap between rich and poor is growing, something which historically has generally led to social unrest and sometimes revolution.

Could socialism work? It sounds good in theory but the socialist and communist experiments of the last century weren’t exactly glowing successes. It’s the same problem as capitalism. An entrenched few seize control and don’t let go. But under communism, they control everything, the state as well as business. Besides, a centrally run and managed economy is probably not doable or practical. Such a behemoth would move too slowly to be much use in our ever fast-changing world. Besides, the opportunities for corruption and cronyism are huge and apparent.

Destination unknown. That’s where we’re heading. No one really knows what will come next, except that the old ways aren’t working any more.

What do you think?

Pushing Back

(Vanessa Pike-Russell photo .)

This is the third post in a series examining avenues available for creating change.

Where we buy our food can be a revolutionary act.  It can continue to support the Wall Street-based system of national chains, agribusiness, and investment banks.  Or it can instead support small farmers, cooperatives, and local businesses.  The choice is ours.  We have to eat– who will we give our money to?

To most fully support a revolutionary economy, we would need to look not only at where we get our food, but also what is in it.  Giant agribusinesses get billions of dollars in subsidies each year– our taxes at work.  With that money, they produce cheap corn and soy, which in turn produces high fructose corn syrup and hydrogenated oils.  Without debating the health merits of these ingredients, let’s observe that the more we eat of these industrially-produced food ingredients, the more we support the corporate system that created them.  By avoiding corn syrup and hydrogenated soy oil, we’re taking a bite out of the profits of some of the most influential corporations in Washington.

Let’s take another aspect: it’s lunch time and I’m in a rush.  Do I eat at McDonalds of KFC, or choose instead my local burrito shop?  For coffee, do I patronize nationwide Starbucks, or the locally-owned coffee shop that offers live music in the evenings?

As we review our lives, we will find that we are intertwined with national and multinational corporations– sometimes unnecessarily.  Sure, it’s pretty difficult to buy a car or an insurance policy through a local company (unless you live in Michigan or Connecticut, respectively).  But I found a local company to provide my internet service.  My bank is local– and it not only gives me free checking, it pays me 2.25% interest on my balance, and they know me by name when I walk in!

There are some products that I can’t buy from a local company, but I can buy them from a small company elsewhere.  Ebay, Paypal,  and the internet in general have opened up worlds of opportunity for small businesses.  I’ve bought stainless steel equipment from Wisconsin and Nebraska, cheese cultures from Wisconsin, Massachusetts, and Ontario, and cheese molds from the UK– all choosing small businesses over the national or international “big guys.”

Home Depot, Staples, and Verizon Wireless are probably here to stay– there aren’t very many alternatives.  But for much of what I buy, I can make the choice to support my local economy over Wall Street.

There’s another aspect of Wall Street that permeates our lives: investment.  Whether for our retirement savings or our nest egg, most of us turn to stocks or stock-based mutual funds.  (Remember the Bush proposal that would have put even our social security into Wall Street based investments?)  It’s no surprise, really: the companies we work for offer Wall Street stock-based investment vehicles in their 401(k) plans.  Advertising campaigns by Morgan Stanley, Charles Schwab, TD Ameritrade, and others accept as a given that stocks are the only place to invest our money for the long term.  We’ve been raised on a steady diet of the idea that what’s good for Wall Street is good for us.

I know people who invest only in Small Cap stocks, those small businesses that people are betting will turn into large businesses.  But why invest in Wall Street at all, when there are so many investment opportunities closer to home? To my mind, if a company is big enough to be traded on a public exchange, it’s probably too big for me to invest in,  I’ve pulled almost all my savings and retirement funds out of stocks and stock-based mutual funds,and put them instead into local investments.

Here are some of the investment vehicles that I’ve chosen, and some that my clients have used:

  • Real estate investments (raw land)
  • Rental real estate, alone or in partnership with others
  • Loans to small businesses
  • Creating a small business
  • Loaning money secured by property
  • Purchasing a mortgage from a private lender
  • Collectibles

Whether you know it or not (and Wall Street hopes you don’t), you can even invest your IRA or Roth-IRA in these investments.  And by partnering with others, most of these can be accomplished with no bank loans.  Why put the bank first in line if there’s a problem?  A cash-only deal is another way to keep Wall Street out of our affairs.

Wall Street wants us to believe they are indispensable. But why do they spend so much money reinforcing that image, unless it’s open to question?  By voting with our wallets, we can dispel that image and put them back in their place.