- In 2008, a protracted global depression began, criminally
manufactured by Wall Street and Washington scoundrels, complicit with major
- Why? To permit greater financial and other corporate
consolidation, more power, and ability to buy favored assets cheap, profiting
hugely at the expense of millions of working households.
- At the same time, Washington's got it own agenda. As
White House chief of staff, Rahm Emanuel (now Chicago's mayor) told the
Wall Street Journal on November 6, 2008:
- "You never want to let a serious crisis go to waste.
What I mean by that is that's an opportunity to do things you couldn't
- He didn't mean populist ones. He meant hardline neoliberal
austerity to make working Americans bear the burden of bailing out banks,
responsible for what trends analyst Gerald Celente calls the Greatest Depression.
- How? The usual IMF way, including layoffs, wage freezes
or cuts, fewer benefits, less social spending, tax cuts for the rich and
corporations, crushing trade unionism, mass privatizations, deregulation,
and harsh repression against opposition to a system incompatible with social
democracy, civil and human rights.
- In the 1980s, it was Reaganomics, trickle down, and Thatcherism.
Today it's "shock therapy" called austerity, a destructive dead
end, the same scheme pitting capital against people - disposable workers
tossed out for big money's gain.
- It's how predatory capitalism works, harming many for
so few - snake oil masquerading as good policies, corrupted politicians
and central bankers force-feeding harmful ones, wrecking economies and
human lives so corporate favorites benefit. Their short-term losses, in
fact, are considered investments for greater gains.
- As a result, expect rising unemployment, growing poverty,
greater human deprivation, and accelerated transfers of more wealth from
working households to corporate favorites and elites.
- Destroying America's social contract also is planned,
incrementally with multiple cuts for perhaps years. Principally, Social
Security, Medicare, Medicaid and publicly funded pensions are on the chopping
block for elimination.
- Also targeted are all other New Deal/Great Society programs
to return America to 19th century harshness. An Obama-led bipartisan conspiracy
assures it. In fact, he was chosen to do what no Republican would dare
- a classic reverse Nixon goes to China moment, pulled off at the 11th
hour as planned. The fix was in, theatrically orchestrated, then consummated
as both sides agreed.
- At the same time, on August 4, the specter of 2008 repeating
hit global financial markets hard, plunging on fears of a a greater economic
- On July 31, Boston-based GMO investment analyst Edward
Chancellor headlined his Financial Times article, "A hapless union
has lost its direction," saying:
- "There are many economic challenges around the world
today. The US teeters on the brink of default (in fact, decline because
of years of bad policies), deleveraging continues across the west, cracks
are appearing in China's fixed asset investment boom, Japan remains stuck
in the deflationary doldrums (its economy heading south), while inflation
is picking up in emerging markets. None of these problems, however, are
as intractable as those facing the eurozone."
- At issue are nations like Greece, Ireland, Portugal,
Spain and Italy vulnerable to default from over-indebtedness, besides numerous
other problems at a time global contraction seems imminent.
- Moreover, "(a)fter a little more than a decade,
the European Monetary Union resembles a very unhappy marriage." However,
its members "find the prospect of divorce even more traumatic. No
one, it seems, quite knows where this hapless union is heading," or
perhaps America as well, based on plunging August 4 financial markets,
awakening belately perhaps to a reality earlier unacknowledged.
- Whether so or not, only time will tell, but what's clear
is that bad policy begets bad results. Only their timing, duration, and
degree are uncertain.
- On August 5, New York Times writers Matthew Saltmarsh
and Bettina Wassener headlined, "Markets Fall as Global Worries Multiply,"
- "Stock markets dropped again Friday in Europe following
sharp sell-offs in Asia and on Wall Street, as fears about weak growth
in the United States piled onto longstanding worries about debt levels
in the euro area."
- Nonsensically, a Murdoch-owned Wall Street Journal editorial
headlined, "The Global Rout," blaming it on failed Keynesians,
saying they "fired all their ammo and here we are."
- In fact, they "fired" $16.1 trillion to Wall
Street and global banks (producing no economic growth), and trillions more
to the Pentagon and war profiteers, producing death and destruction - harmful,
not productive, "bang for the buck."
- The combined weak economic data, growing layoffs, rising
unemployment, consumer pessimism, a European sovereign debt crisis, and
counterproductive policies assuring much worse to come, awakened investors
to fear hard times, despite rosy scenario analysts saying a repeat of 2008
- They're the same ones saying then that good times were
straight ahead after a normal market correction that, in fact, turned into
a rout, teetering world economies on the brink of collapse. As a result,
they can't admit that what's ahead may prove more disastrous because policies
chosen papered over grave problems, assuring greater ones perhaps arriving
sooner than expected.
- July employment numbers provided more clues, less rosy
than the headline 117,000 jobs gained and U-3 unemployment falling to 9.1%
(belying nearly 23% unemployment based how calculated in 1980).
- In fact, the broader Household Survey showed 38,000 jobs
lost, putting employment at its lowest level since fall 2007. In addition,
200,000 discouraged workers stopped looking. Notably, from when Obama took
office until now, Americans aged 16 or older out of the labor force increased
by nearly 3.6 million - a clear sign of economic deterioration, not recovery,
growth, or a good sign for what's coming.
- On August 2, economist Paul Craig Roberts titled his
article, "The Decline and Fall of the American Empire," covering
some salient issues, including:
- (1) Waiting until the 11th hour to raise its debt limit
left world nations "worr(ying) about the judgment and sanity of the
country with the largest nuclear arsenal in the world," putting politics
above sound policy.
- (2) America's public debt is rising because its economy
isn't, "but war expenditures are."
- (3) Economic decline results from offshoring manufacturing
and key service sectors to low wage countries, hollowing out America in
- (4) Only Wall Street, other corporations, and investors
benefit at the expense of trashing America over time.
- (5) Deregulating the fire sector (finance, insurance
and real estate) was "(t)he other destroyer of American economic prospects."
Out-of-control speculation followed, reckless casino capitalism, assuring
eventual economic chaos, perhaps collapse, bankruptcy and ruin.
- (6) "So in America, the light unto the world, American
citizens are thrown out of their homes," so banks can "bulldoze"
them, leaving them homeless like in third world countries.
- Notably, the multi-trillions of dollars America spends
waging wars, bailing out banks, and enriching other corporate favorites
could have been used productively for economic growth, more employment,
higher wages, decent benefits, shoring up education, providing other essential
services, and making the nation a model for others.
- Instead, policy makers destroyed the America that was
by policies guaranteed to fail. It's only a matter of when the chickens
come home to roost. Rest assured they will, hurting ordinary people hardest.
- A Final Comment
- In his book titled, "Capitalism, Socialism and Democracy,"
economist Joseph Schumpeter (1883 - 1950) coined the term "creative
destruction" to denote "a process of industrial mutation that
incessantly revolutionizes the economic structure from within, incessantly
destroying the old one, incessantly creating a new one."
- He defined capitalism as an evolutionary process "brought
about by innovation," what he called "Economic Evolution."
From it, he believed progress results, living standards rise, and improved
technologies create new industries and developments over time. "There
is no reason to expect slackening of the rate of output through exhaustion
of technological possibilities," he said.
- As a result, "(c)apitalism's greatest accomplishment
is that it progressively raises the living standards of the masses. Nobody
ever got rich selling just to the rich. (Prosperity depends on) mak(ing)
your product affordable to the masses....raising the general welfare."
- Schumpeter called intellectuals capitalism's greatest
enemy. His "paradoxical conclusion" was that it was being killed
by its achievements, that it "inevitably educates and subsidizes a
vested interest in social unrest."
- Could he have imagined what's ongoing today, a much different
process than he envisioned. Capitalism's greatest enemies are within, gaming
the system destructively, wrecking economies for short-term gains, bribing
politicians to go along for their own self-interest, and leaving future
ones and CEOs to clean up perhaps an unfixable mess.
- Moreover, devolution, not evolution, is happening. General
welfare is absent. Living standards aren't rising, they're declining, and
with that growing human suffering. Blame unchecked greed and Lord Acton's
prescient warning that, "Power corrupts, and absolute power corrupts
- Reaping the whirlwind results, affecting ordinary people
most, not perpetrators, their fortunes secure in offshore tax havens.
- Serious economic trouble and decline are assured. Only
their timing, duration and degree can't be predicted, nor can policy measures
implemented as a result.
- Given how destructive they've been so far, expect nothing
better ahead, not for working households for sure. They're on their own
and out of luck under America's first Black president promising change.
He didn't explain what kind or who'd benefit.
- Stephen Lendman lives in Chicago and can be reached at
- Also visit his blog site at sjlendman.blogspot.com and
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