Third World America: The Collapse of American Capitalism

As most working class Americans realize, the American capitalist system is collapsing, along with the "middle class" and the "American Dream" (home ownership, living wages, college, etc.)

As profits soar on Wall Street and among the financial institutions the American working class bailed out, workers and the middle class are losing wages, jobs and living standards. While demand is falling, the U.S. political and media elite are still focused on giving more tax breaks to the wealthy corporate elite who have declared war on labor and the middle class.

The irony is that while Obama and the corporate Democrats focused on saving American capitalism, they will suffer the wrath of the American voters as the system collapses.

Arrianna Huffington: Third World America--Chronicling the Assault on America's Middle Class

Eight Facts About the Shrinking Middle Class

Economic Fears Rise as Disappointing Figures Pile Up

Jobless Millions Signal Death of American Dream for Many

James Petras: What Crisis? Profits Soar!

Capitalism in Crisis

As Marx predicted, Capitalism has been a crises prone economic system since its beginnings. Bascially, capitalism has an inherent contradiction between accumulation of capital/profit and increasing demand (wages, etc.) which creates a constant struggle between labor and capital. Here's a video presentation of radical Marxist sociologist David Harvey summarizing the Marxist analysis of the crises of capitalism:


Here's more evidence of the growing crises and the class struggle between labor and capital:

U.S. Experiencing the Worst Period of Prolonged Unemployment Since the Great Depression

Brutal Unemployment Report: Economy Sheds 125,000 Jobs

Unemployment Rate Above 10% for Past Year

The Unemployment Crisis in Charts

On the Road to a Jobless Recovery

Myths of Austerity

No Age of Austerity for the Rich

Sticking the Public for the Bill for the Bankers' Crisis

The Lost Decade

The past decade was a rough one for American workers. Wages have declined, and millions of jobs disappeared. We can thank George W. Bush and the Republicans for most of the misery, though the corporate wing (and breast) of the Democratic Party is also partly to blame (NAFTA, etc.)

Here's the consequence of Reagan--Bush onomics:

Aughts Were a Lost Decade for U.S. Economy, Workers

"The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth.

It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism -- there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well."

No wonder, Americans' Job Satisfaction Falls to Record Lows

The Beginning of the End of Capitalism?

From Thom Hartman, Black Tuesday:
"80 years ago today, on October 29th, 1929, Wall Street saw the worst day in its history. The shock of “Black Tuesday” came to an end, but the misery of the Republican Great Depression was just beginning. As a result of the disaster that followed three successive Republican administrations – and their cutting regulations and dropping taxes on the most wealthy from over 70 percent to under 30 percent – the Roosevelt administration through most of the 1930s re-regulated the economy and raised taxes on the very rich back up to 91 percent. That led to fifty years of growth and prosperity, which came to an end with Ronald Reagan re-introducing the Harding/Cooledge/Hoover tax cuts and supply-side economics. Hopefully the Obama Administration will soon learn the lesson of the last Republican Great Depression and follow in FDR’s footsteps."

Doesn't look like it Thom!

Thousands Protest Bank Power and Abuse in Chicago

Geithner Defends Collapsing Banking System 115 Banks Fail This Year. "Recovery will be choppy"

Inside the Bank Bailouts

Obama Goes Wobbly Over More Stimulus
Unemployment swelled to 9.8 percent, "with nearly nearly 26 million workers—17 percent of the workforce—unemployed or underemployed," according to economist Mark Zandi. The economy remains extremely weak and is expected to lapse back into recession if the Obama administration fails to provide a second-round of stimulus.

Propping Up a Broken Capitalist System

Mat Taibbi (Rolling Stone), Wall Street's Naked Swindle

Related: McClatchy series on How Goldman Secretly Bet on Housing Crash

Economic Crisis: It's Worse than Before

Nobel-Prize Winning Economist Joseph Stiglitz: Post-Lehman Things are Worse than Ever

"In the U.S. and many other countries, the too-big-to-fail banks have become even bigger," Nobel Prize-winning economist Joseph Stiglitz said in an interview today in Paris.
Stiglitz leveled his criticism directly at the Obama administration for not placing stricter limits on the largest institutions or requiring them to simplify their structure.
"The problems are worse than they were in 2007 before the crisis." The statements come on the anniversary of the collapse of Lehman Brothers.
"We aren’t doing anything significant so far, and the banks are pushing back," he said.

Stiglitz: The Financial System Isn't Fixed

The Big Plunge Is Just Ahead

How the Federal Reserve Bought the Economics Profession

Arianna Huffington: Why Obama Won't Be Able to Reform Wall Street

Robert Reich: The Continuing Disaster of Wall Street, One Year Later

Financial Crisis (On Huffington Post)

Scenes of The Great Recession

A Scene from the Great Recession

The economic crisis grows:

The Economy is Worse Than You Think (WSJ)

Foreclosures Up 15%

No Economic Bottom Yet

U.S. Income Inequality Continues to Grow

Dean Baker: Our Economy Needs at Least $2 Trillion in Spending Right Now--Tens of Millions of Jobs At Stake

Robert Kuttner: Smoking the Green Shoots--Where is the Economic Recovery Going to Come From?

Jobless Rate Tops 10% in 15 States

1.5 Million to Exhaust Unemployment Benefits by End of Year

Unemployment at 26 Year High

John Nichols: Will Unemployment Sink Obama's Agenda?

Recession Photo Gallery

Catching Up (Non-Michael Jackson News)

There was some non-Michael Jackson news this week!

I've been working late and have been too tired to blog much this week.. but here's some things to keep your eye on:

The healthcare battle is heating up! The "healthcare" (sic) lobby is spending something like $124 million a week to kill a public health insurance program. Contact your Senators and Representatives and demand the choice of a public health insurance plan!
(See the Healthcare for America Now link on the right to take action!)

V.P. Biden said that the Obama administration did not realize how bad the economic situation was. Didn't they read Paul Krugman and other progressive economists who warned that the economic stimulus was not going to be enough? Things are not looking good on the economic front, and if the unemployment rate (already at a 26 year high of 9.5%) keeps going up, it could be a real problem for the Democrats in 2010, and Obama in 2012! (I fear that the Democrats will be taking the blame for the Bush-Republican Great Recession.)

Robert Kuttner, Economic Wake-Up Call

Rep. Patrick Murphy, an Iraq Vet, is leading the fight to repeal "Don't Ask, Don't Tell." He was on Rachel Maddow tonight and was very impressive. He is the right person to lead the fight!

There was a right-wing coup in Honduras which ran the democratically elected President, Manuel Zelaya, out of the country and will not even let his plane land. Of course, since the ousted President was a LEFTIST, the American media was pretty silent on the situation, while conservative Republicans sided with the coup leaders! Guess right-wingers don't really care about democracy!

I'll have more to say on these and other issues in the next few days.. stay tuned!

Wall Street Fights Back

The corporate elite on Wall Street are trying to fight back against the populist backlash to corporate greed and excessive corporate bonuses.

Wall Street Journal: On Wall Street, Talk of Trust and Civil War

Obama has been carefully trying to respond to the public's anti-corporate outrage while not offending the corporate elites. In fact, the Obama administration seems to be more afraid of a backlash from Wall Street and corporate America than they are of the populist uprising. Even in his second prime-time press conference tonight, Obama tried to express some anger at the AIG bonus scandals, while defending business and the "good" corporate rich. Treasury Sec. Timothy Geithner has been meeting and talking with his friends on Wall Street trying to win their support for his bank bailout plan. In order to win their support, Obama is softening his tone toward them.

Wall Street: Obama Dials Down Wall Street Criticism

Maybe the corporate rich on Wall Street, and the Obama administration, should read Matt Taibbi's excellent article in the Rolling Stone explaning why Americans SHOULD be angry at Wall Street: The Big Takeover

Here's a peek:
"It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far..."

Obama's "Katrina Moment"

It's really amazing that a politician as smart and astute as Barack Obama would allow conservative Republicans to get ahead of the populist outrage over AIG and the whole tax payer bailout of Wall Street banks and financial institutions that created the greatest economic crisis since the Great Depression. Once again Democrats have failed to be the party of the working class. Republicans have been able to (hypocritically) point out the financial and political connections between Democrats in Congress, and even the Obama Administration, and these corrupt "welfare queens" on Wall Street.

If Obama is going to be politically successfull, he MUST quit following the failed ideas of Wall Street Insiders like Timothy Geithner and Lawrence Summers and listen to the populist uprising and take on the corporate elite.

Frank Rich: Has a "Katrinia Moment" Arrived?
William Greider: Obama Told Us to Speak Out, but Is He Listening?
Paul Krugman: Zombie Financial Ideas
More Despair Over Geithner Plan
The Voters' Uprising: Pres. Obama, What Are You Thinking?

Obama's Economic Advisors Vs. Economic Reality

I think the Obama Administration has written it's own political obituary!
Obama Advisors-"The Fundamentals of the Economy are Sound" ?
WASHINGTON (AP) — One of President Barack Obama's economic advisers said Sunday that the economy is fundamentally sound, a striking reversal from the Democrat's campaign rhetoric as his administration now guides the nation's financial health amid dire conditions.
Obama's Democratic allies pleaded for patience for an administration hitting the two-month mark this week, while Republicans said the White House's plans ignore small business and the immediate need to fix what ails the economy.

During the fall campaign, Obama mercilessly mocked his Republican opponent, Sen. John McCain, for declaring, "The fundamentals of our economy are strong." Obama's team painted the veteran senator as out of touch and failing to grasp the challenges facing the country.

On Sunday, economic adviser Christina Romer was asked during an appearance on NBC's Meet the Press if the fundamentals of the economy were sound. "Of course they are sound," she replied.

"The fundamentals are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology," she said. "We know that — that temporarily we're in a mess, right? We've seen huge job loss, we've seen very large falls in GDP. So certainly in the short run we're in a — in a bad situation."

Just a week ago, White House Office of Management and Budget director Peter Orszag declared that "fundamentally, the economy is weak."

"If we are keeping focused on all the fundamentally sound aspects of our economy, all the outstanding companies, workers, all the innovation and dynamism in this economy, then we're going to get through this," Obama said, striking a tone that his top aides mimicked.

Despite the new enthusiasm at the White House and on Wall Street, there was little solid evidence to suggest an end was in sight to the severe recession that has already cost 4 million American jobs, driven down home values and sent foreclosures soaring. Meanwhile, Chinese Premier Wen Jiabao said he was concerned about the safety of the estimated $1 trillion his country has invested in U.S. government debt.

Obama sought to downplay the worries.
----

How can anyone in the Obama administration claim that the "fundamentals of the economy are strong" ??? Didn't that comment, which flew in the face of economic reality, do John McCain in? Has anything changed since then? No, the economy has gotten WORSE. American capitalism, WORLD capitalism, is in its greatest crisis since the Great Depression. The credit and housing crisis have pulled the rug out from under what was left of consumer demand. Workers are losing jobs (4 million) and wages.
Obama has appointed more Wall Street lobbyists and crooks (Timothy Geithner and Larry Summers) to solve the crises they and Clinton economic bigwig Robert Rubin helped create. (I believe the choice of Geithner and Summers to lead Obama's economic policies has doomed his administration.)

See also: Summers: "Excess Fear" About Economy Must Be Broken

Capitalism is in a CRISIS, with no end in sight. Obama and the Democrats are now the defenders of a failing economic system! Obama is continuing the Bush bailout of Wall Street, banks and financial institutions that created the crisis while proposing a stimulus package that falls too short and will not solve the crisis. The unemployment rate is skyrocketing to double digits. Yes, Obama inherited a crisis he didn't create, but both Republicans and Democrats (including the Clinton administration) did create it. Both capitalist political parties are part of the problem. The problem is CAPITALISM!

And it looks like the American people's frustration and anger are turning from Bush to Obama:
Obama's Poll Numbers Falling


See Also:
White House Braces for Bailout Backlash

Robert Kuttner: Will Obama's Economic Team Lead Him Off the Cliff?

The Bush Recession

While the "do-nothing" Hooverite Republicans twiddle their thumbs and threaten to filibuster the economic recovery plan, the U.S. economy is sinking fast. Here's a graph that should put things in perspective. Compare the job losses in the current "Bush" Recession to prior recessions.

Obama Shines in First Press Conference

President Obama Showed Why He Won the Election in his First Live Press Conference

Many people may still be in shock at watching an intelligent Presidential Press Conference. Barack Obama did a great job of explaining why Congress must pass the "Economic Stimulus and Recovery" Bill. He made the case for Keynesian "demand-side" economics--using government to stimulate demand. Although I still wish he would quit playing nice with the Republican Taliban, he did take a few kid-glove swipes at the GOP by reminding the American people that THEY were in charge for the past eight years and created the mess we are in, and that we tried "supply-side" (trickle-down) economics and it FAILED. The Bush Tax Cuts did not solve the economic crisis--they made it worse.

What I can't understand is why "centrist" Democrats gave away so much of the stimulus plan just to get a couple of Republican votes. Why is Nebraska Sen. Ben Nelson even in the Democratic Party? Listening to him try to rationalize his cuts in education and aid to the states in the stimulus bill on the Rachel Maddow Show, I thought he was a Republican. With "Democrats" like him... gods help us.

Senate Compromise Guts "Stimulus"

John Nichols, The Nation: Senate Dems Compromise Away Best Parts of Stimulus Plan
Senate Dems/Republicans slash $billions in needed stimulus: cuts in eduction and school funding, cuts in unemloyment aid, cuts in aid to financially struggle states, etc..

In order to get the votes of two Republican (Maine's Susan Collins and Pennsylvania's Arlen Specter) and perhaps another (Mainer Olympia Snowe) that were needed to undermine the threat of a GOP filibuster, Reid surrendered $86 billion is proposed stimulus spending. In doing so, the Democrats agreed to cut not just fat but bone, and to warp the focus and intent of the legislation.

The Senate plan is dramatically more weighted than the House bill toward tax cuts (which account for more than 40 percent of the overall cost of the package). This is despite the fact that there is a growing consensus -- among even conservative economists and policy makers -- that tax cuts will do little or nothing to stimulate job creation in a country that lost almost 600,000 positions in January alone.

The bottom line is that, under the Senate plan:
* States will get less aid.
* Schools will get less help.
* Job creation programs will be less well funded.
* Preparations to combat potential public health disasters -- which could put the final nail in the economy's coffin -- will not be made.

In every sense, the Senate plan moves in the wrong direction.

Paul Krugman: What Centrists Have Wrought
The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.

According to the CBO’s estimates , we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

The real question now is whether Obama will be able to come back for more once it’s clear that the plan is way inadequate. My guess is no. This is really, really bad.

Frank Rich: Slumbdogs Unite!

The Economic Crisis: A Socialist Perspective

Maybe the Socialist Party is right.. why should the working class keep bailing out capitalism? Isn't it time for REAL CHANGE--Socialism!

Socialists Confront the Economic Crisis

Obama's $825 Billion Stimulus Plan: Too Little, Too Late