10/18 Why “Occupy Wall Street” ?

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The Largest Welfare Check Ever Written

The Rise of the Wall Street Ruling Class

by THOMAS VOLSCHO

Who rules America?  Sociologists and political scientists have debated this question since C. Wright Mills published his 1956 book The Power Elite.  Writing in the 1950s, Mills argued that the United States was ruled by a triangle of power between the federal government, large corporations, and the military industrial complex (with many people moving between these sectors).  Robert McNamara went from CEO of Ford Motor Company to Secretary of Defense under the Kennedy-Johnson administrations (modern examples include Dick Cheney, Henry Paulson, Robert Rubin, Larry Summers, etc).  Since the late 1960s, sociologist G. William Domhoff has revised, updated, and increased the sophistication of power elite theory.  If we look at the composition of cabinet-level and other White House appoints since the Reagan administration, it is clear that there is a significant movement between Wall Street and the Federal Reserve Bank and Treasury Department.  But why?  The answers are found in the social and economic crises of the 1960s and 1970s. 

The rate of profit in the non-financial sector fell after peaking in 1966 and continued its fall into the mid 1970s.  At the same time, the Civil Rights, anti-war, feminist, brown power, black power, American Indian Movement, student revolts, prison riots, and other rebellions against the establishment were taking place.  Regulatory victories by Ralph Nader and other challenges to the power of the capitalist establishment were increasingly seen as a threat in the 1970s.  Lewis F. Powell (a corporate lawyer, board member, and future Supreme Court Justice) wrote a memo to the Chamber of Commerce in 1971 and opened the document by stating, “No thoughtful person can question that the American economic system is under broad attack.”  But what was most alarming was that “ Although New Leftist spokesmen are succeeding in radicalizing thousands of the young, the greater cause for concern is the hostility of respectable liberals and social reformers.”  The great fear was that mainstream liberals were becoming more radical.  A further fear was that Yale’s graduating classes (composed of old and new money and elites-to-be) in the late 1960s and 1970s included those who were versed in the “politics of despair.”

In response capitalists mobilized politically and ideologically.  By 1976, the U.S. Chamber of Commerce’s membership started increasing rapidly and doubled by 1980.  In 1975, there were just under 200 Corporate Political Action Committees (PACs) but about 1400 by 1981.  The ideological factions of the right in the late 1970s included Supply-Siders, Monetarists, and Neoconservatives.  Each of these factions were in power at the Treasury Department, White House, and Federal Reserve Bank beginning in 1979.  While they didn’t necessarily always get along, they put policies into place that led to the rise of the Wall Street Ruling Class. 

Supply-siders argued that radical tax cuts would increase economic growth so much that it would actually increase government tax revenues.  This theory (known as the “Laffer Curve”) was drawn on a napkin at a bar and then presented in editorials in the Wall Street Journal.  One of Reagan’s wunderkind, Office of Management and Budget David Stockman, confided to a Washington Post reporter (William Greider) that Reagan’s tax cut was really a “trojan horse” for cutting taxes on the rich. 

At the same time, monetarists believed that the only cause of inflation was the money supply.  Beginning in October 1979, one of the first applications of the “shock doctrine” came in the form of very high interest rates.  The vague proclamations of the Federal Reserve Banker, Paul Volcker, that the Fed was only focusing on M1 (a measure of money supply) and that the Fed’s hands were tied such that it was “the market” that determined interest rates was sold to the public.  What this really was, was “bitter medicine” and Volcker was quoted in the New York Times as saying that Americans must get used to declining living standards.  In essence, the Federal Reserve Bank was implementing the “shock and awe” phase of the first-strike of a thirty year class war.    

In 1981 Reagan signed the “Kemp-Roth” tax bill about a week after he had taken the radical step of firing 11,000 striking federal air traffic controllers.  This was accomplished within the context of the highest interest rates and subsequent unemployment rates of the postwar era (in 1981-1982).  This strategy, as explained by Naomi Klein in her book The Shock Doctrine, requires that radical policy shifts must occur when the public is disoriented and confused.  High interest rates, business failures, foreclosures, plant closures, downsizing, and rising unemployment can have this effect.  The interest-rate shocks enabled elites to pursue radical anti-union policies and radically reduce taxes on the rich.  At the same time, neoconservatives argued that “missile gaps” and “acoustic submarines” (the inability to detect them being given as evidence for their existence) developed by the Soviet Union were posing a major threat to the United States.  This justified unprecedented defense spending increases.  One of the failed moments of the Reagan revolution, of course, was the decision not to pursue “Social Security reform” while only having limited success at cutting other social programs.  This left a problem.  Tax cuts for the rich reduced the tax revenue of the Federal government while a defense-spending spree threatened to create the largest federal deficit in history. 

In a widely ignored 2000 book, Wall Street Capitalism: A Theory of the Bondholding Class, economist E. Ray Canterbery explains what happened.  The tax cuts drastically increased the incomes of the rich and they used their newfound money from the tax cuts to buy the Treasury bonds, notes, and bills that the Treasury Department had to issue in order to finance Reagan’s deficits.  The combination of monetarism (high interest rates), supply-side tax cuts, and the phantom Soviet threat created the bondholding class.  In essence, a Wall Street Welfare institution known as the bond market came to dominate politics in the United States.  Instead of using taxes to fund the federal government (and increasingly state and municipal governments), taxes on the rich were cut and they were handed an “investment opportunity” so that working and middle-class taxpayers now pay a “bondholder’s tax” to firms like Goldman Sachs and JP Morgan Chase (as well as Japan and China).  The domination had become quite apparent in early 1993 when President-elect Bill Clinton remarked "You mean to tell me that the success of the economic program and my re-election hinges on the Federal Reserve and a bunch of fucking bond traders?"  Clinton ditched his 1992 campaign promises to the whims of the Wall Street Ruling Class and the Federal Reserve Bank.

Treasury securities come in maturities of 1 month, 3 months, 3 years, 7 years, 10 years, and 30 years.  But rarely does the bondholding class hold their securities to maturity.  Instead, they are circulated through high-volume secondary markets.  In October of 2010, for instance, the average daily trading volume of Treasury bonds was $558 billion.  Treasury, State, and Municipal bonds are highly concentrated among the rich.  In the 2007 Survey of Consumer Finances, the Top 5 percent (ranked by net worth) held about 93.6 per cent  of all bonds (this does not include the savings bonds that the working and middle classes are familiar with).  Likewise, the Top 5 percent owned 82.4 per cent  of all stocks.  The bondholding class oscillates between bonds and stocks as market conditions dictate.  The Wall Street Ruling Class manipulates the supply of bonds, bills, and notes of differing maturities through its “Treasury Borrowing Advisory Committee” to maximize the economic gains of the bondholding class.  The current Chairman and Vice Chairman are from JP Morgan Chase and Goldman Sachs, respectively.

 By implementing what Canterbery calls a “bondholding class strategy,” the Federal Reserve Bank managed interest rates so as to optimize returns for the bond and stock market.  Studies indicate that bond prices and the stock market generally react negatively to what is good news for most Americans: strong employment growth, a decline in jobless claims, an increase in wages, or an uptick of inflation sends bond and stock prices falling.  When news reports of slower housing starts, slower than expected employment growth, an increase in unemployment or jobless claims are released, the bond and stock markets rally.  This is a major difference in the class interests between the vast majority of Americans whose primary income is from wages and salaries and the minority of rich asset holders.  When the economy grows too fast, the ideology of the bondholding class dictates that the Federal Reserve Bank should raise interest rates (which increases the unemployment rate and reduces wages).  Keep wage and commodity inflation in check by all means necessary while allowing for stock market and home mortgage inflation. 

The last thirty years of the class war waged by the Wall Street Ruling Class and the Federal Reserve Bank has been about reducing wages and goods inflation while sustaining financial asset inflation to increase the enrichment of the bond and stock holders.  Net interest payments on Treasury securities are welfare payments to the Wall Street Ruling Class.  One of the propaganda functions of the highly concentrated (by ownership) mass media is to keep the masses confused about this great source of power.  From the perspective of the elite, it is better to inflame and encourage hatred for Mexican immigrants, welfare recipients, and Muslims.  But Mexican immigrants and Muslims, generally speaking do not run the country.  Instead, the simple answer is: follow the money.  By following the money you will be led to a street with a river at one end and a graveyard at the other.  In fact, it is for whom the firms located on this street received the largest welfare check ever written.  As the chorus of Ron Paul supporters, Tea Party activists and white supremacists continues rising and violence escalates, the question arises:  Is there socialism in the United States? The answer is a resounding Yes! Socialism for the rich.        

THOMAS VOLSCHO is Assistant Professor of Sociology, CUNY / College of Staten Island. He can be reached at Thomas.Volscho@csi.cuny.edu

http://www.counterpunch.org/2010/12/10/the-rise-of-the-wall-street-ruling-class/

The Wall Street Financial Crisis: A Mistake or a Crime?

Question: When is a Crime Not Considered Criminal? Answer: When it’s Hatched on Wall Street.

by Danny Schechter

Global Research, January 26, 2011

Larry Flynt.com - 2011-01-19

All over Europe and in much of the rest of the world, a new fictional hero has engaged the fascination of millions of readers. His name is Mikael Blomkvist, and he’s the protagonist of the late Stieg Larsson’s Millennium trilogy. These thrillers, set against the background of high financial crimes and misdemeanors, have become global best-sellers, doubtless in part owing to their gripping plots, elaborate mysteries and engaging characters. But their success is also indisputably a by-product of the macroeconomic chicaneries of our era and the human catastrophes they have wrought.

Larsson understood that financial crimes are far from victimless. They have upended millions of people’s lives, even if most of the victims don’t understand how they’ve been shortchanged and who is responsible.

Although the financial crisis that swept the world may have started on Wall Street, it has brought down governments and shredded economic security worldwide, resulting in the loss of millions of jobs and homes as businesses collapse, foreclosures grow, credit tightens and communities are devastated. One estimate of the damage: $197 trillion.

The Pew Economic Policy Group reports the average U.S. household lost $66,000 in stock holdings and $30,000 in real estate values from June 2008 through March 2009 due to the upheaval in world markets. This brings us close to $100,000 per family. Against that backdrop, it’s not hard to see the appeal of Larsson’s hero Blomkvist, whose “contempt for his fellow financial journalists” the author encapsulates with stinging clarity: “A bank director who blows millions on foolhardy speculations should not keep his job. A managing director who plays shell company games should do time…. The job of the financial journalist was to examine the sharks who created interest crises and speculated away the savings of small investors, to scrutinize company boards with the same merciless zeal with which political reporters pursue the tiniest steps out of line of ministers and members of Parliament.”

This is why I identified with Blomkvists’s fictional mission; in some ways it captured my own frustrations in a media world for which “the c-word”— as in financial crime—seems must never be spoken.

The media failed us on the most crucial story of our era. Our newspapers and TV sources contributed to an economic disaster so cynically engineered even billionaire investor Jim Chanos was prompted to ask, “So where are the perp walks? How long does it take before we see any investigations? It boggles the mind that $150 billion is vaporized…there haven’t been any arrests, any indictments, nor any convictions at any major bank or at any of the government-owned financial institutions Fannie, Freddie and AIG.”

I know how hard it is to alarm the public with mere facts. They don’t have the context within which to interpret complicated stories. In 2006 I released the film In Debt We Trust, exposing illegal subprime scams and warning of the coming meltdown. It was well reviewed, but no mainstream TV outlet would air it.

I was dismissed as an alarmist and a “doom and gloomer.” A mass denial of the dangers ahead seemed to be embedded in the euphoria of the very bubble that was bringing in billions for Wall Street’s financial alchemists, who themselves seemed oblivious to the risks and indifferent to the social impact their practices courted.

The media coverage has made a complex reality deliberately complicated, even incomprehensible. The satirical paper The Onion put the financial press in its place regarding the totally obtuse reporting for which financial journalists were justly infamous even before the biggest scoop since 1929 fell into their laps: “JPMORGAN CHASE ACQUIRES BEAR STEARNS IN TEDIOUS-TO-READ NEWS ARTICLE.” The Onion witheringly characterized the coverage as “bogging down the news for anyone who might be remotely interested in grasping what the fuck is going on.”

Yet there were truth-tellers out there who were largely ignored. Investors like Warren Buffett compared the new exotic financial instruments to weapons of mass destruction— financial nuclear bombs.

Even guru of the right Ayn Rand had warned in Atlas Shrugged about greed destroying her beloved free market: “When you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed.”

Doomed or not, in the second year of the Age of Obama the hoped-for economic turnaround has yet to occur. Even as the stock market goes up again, benefitting institutional investors with the capabilities to exploit it, unemployment remains high and loan defaults continue to rise. The best projections forecast a “jobless recovery,” which for millions is no recovery at all. How did we get into this mess?

Put ten economists in a room, and you get 20 explanations. Most of them revolve around business mistakes, poor risk models or even psychological problems like delusion and market madness. Few will concede that former Senator Ted Kaufman (D-Delaware) was right in charging that “fraud and potential criminal conduct were at the heart of the financial crisis.” Missing has been a hard-nosed look at the crisis as a crime story.

Former bank examiner William Black understands this. Focusing on looting and CEO fraud, he helped send over 1,000 bankers to prison during the S&L crisis in the 1980s. This time there were neither dogged sleuths nor crime-busting newshounds on the beat.

Even Alan Greenspan has finally admitted in his all-too-polite exchange with a government inquiry that has come to resemble a Princeton seminar, “If you don’t have enforcement, and a lot of that stuff was just plain fraud, you’re not coming to grips with the issue.” Of course, this “maestro” didn’t go into detail on “a lot of that stuff.”

What we are watching is an abstruse debate about banks that are “too big to fail,” not too big to jail.Very little of the discourse speaks in terms of the victims—the millions of families now without breadwinners or homes. Most of the commentary still looks up at CEOs, not down at the people whom they robbed by design, as folk singer Woody Guthrie put it, not with a six-gun but “with a fountain pen.”

When most of us think of crime, we think of gangsters with guns, not banksters with elaborate schemes designed to transfer your wealth to their accounts. Graydon Carter, the editor of Vanity Fair—a publication more at home with Groucho Marx than Karl—said of the meltdown: “[This] may well turn out to be the greatest nonviolent crime against humanity in history…never before have so few done so much to so many.”

Yet economic writers, even progressive ones like James Kwak, deeply mired in the labyrinthian world of financial transactions, still don’t believe it. The day the SEC filed a complaint against Goldman Sachs, he wrote on BaselineScenario.com, one of the more critical Web sites covering the collapse of this vast swindle: “One of the things I say now and then that most annoys people is that the financial crisis was not caused by criminal behavior…. My general line is that I’m sure there was some bad behavior that rose to the level of criminal liability—like lying in disclosure documents—but that it wasn’t necessary for the crisis, and we could have had the crisis without any criminal activity at all.”

The problem with this thinking is that it defines financial crime too narrowly, only in terms of securities laws concerned primarily with protecting investors.

It doesn’t acknowledge that financial institutions spent nearly a billion dollars underwriting efforts to erode government controls and change rules, regulations and even laws to allow them to get away with whatever enhanced their bottom lines, no matter who got hurt. Their well-documented history of aggressive lobbying and buying up politicians qualifies them as avaricious manipulators, not law-abiding companies. Their legal and moral defenses for this conduct are entirely bogus.

Let’s look at Goldman Sachs. In my film I report that Goldman was accused by Massachusetts authorities of deliberately designing mortgages to fail. They settled the complaint by paying a $60-million fine and wrote it off as a cost of doing business. The SEC later filed civil fraud charges on similar grounds.

This was followed by turbulent hearings on the Hill during which Senator Carl Levin (D-Michigan) repeatedly cited an internal correspondence reference to “shitty” deals that Goldman Sachs peddled only to bet against them. The Justice Department, in a separate action, was asked to open a criminal file.Among the allegations: shady accounting schemes. The giant firm has certainly come in for excoriation and ridicule, but none of Goldman’s officers has been convicted of wrongdoing, and they are “lawyered up” to the gills.

Leslie Griffith on Reader Supported News writes: “A modern-day financial monarchy, Goldman acts with the impunity once reserved for kings. Controlling legislators. Electing Presidents. Filling the Executive Branch with well-heeled lackeys, manipulating world markets and betting against the welfare of its own clients…the American people. When their equivalent of ‘tax time’ came, they squeezed the peasants for billions of bail-out bucks.”

In their testimony before Congress, Goldman bankers defended themselves by saying all big banks did what they did. A weak alibi at best, it nonetheless seems to be working for them. The assignment of criminal liability is hardly underway. As one lawyer said to Bloomberg News, “In order to proceed criminally in a case, you need to have very clear evidence of lying, cheating and stealing.” In plain English: Don’t get your hopes up. The government has not declared war on Wall Street even after Wall Street declared war on Main Street. The housing bubble was built on a bedrock of fraud linking shady subprime brokers and appraisers to an industry of financial products that were then resold with misrepresented values thanks to the connivance of unethical ratings agencies.

The selling and reselling of assetless asset-backed securities is a central element of the vast fraud, as is the practice of insuring while simultaneously betting against these investments through companies like AIG. We are talking about a criminal enterprise involving tens of thousands of people working in the financial services industry.

Martin Wolf of The Financial Times explained that three industries worked together almost like a cabal to perpetuate these schemes. The architects of the FIRE economy (structured around Finance, Insurance and Real Estate), operated in the shadow of bent rules and apathetic regulators. They built a huge infrastructure of collaborators and henchmen called “financial service professionals.”

Writes Wolf: “In between the ultimate borrowers and the risk-takers were loan-originators, designers and packagers of securitized assets, ratings agencies, sales staff, managers of banks and SIVs [Structured Investment Vehicles] and managers of pension—and other—funds.” What chance did some poor homeowner or credit card customer have against this savvy and well-funded phalanx of operatives whose one mission was to separate them from their property and money?

Many knew the people they were selling to could not afford to buy their products. They didn’t care. It was all done deceptively and by design. It was deliberate, engineered in public and hidden in plain sight. At the local level, mortgage companies said they were under pressure from Wall Street to keep selling homes to the poor so the paper could be resold in an atmosphere of trickle-down corruption.

My own investigation led me to produce a new film, Plunder: The Crime of Our Time, out on DVD from Disinfo. (PlunderTheCrimeOfOurTime.com). I also wrote a companion book, The Crime of Our Time (Disinformation Books) with more documentation than you can get into any film of reasonable length. I was surprised when the Wall Street Journal characterized it as an “anti-Wall Street film [that] isn’t just for Michael Moore fans.” The Hollywood Interview blog called it “fascinating and nailbiting, much like All the President’s Men.”

Movie City News elaborated: “Plunder: The Crime of Our Time describes how Wall Street interests greased the skids for just such a collapse, consciously breaking laws they knew government regulators were unlikely to defend. Michael Moore has trod similar ground, but in a more overtly entertaining style…. It’s a sobering documentary, but one that’s too important to ignore…in Schechter’s case, again.”

This crisis can be explained in a way most people will understand, and when the public “gets it” they will get angry and act. It’s the oldest truism: Where there is a will, there’s a way.

News Dissector Danny Schechter, graduate of Cornell University and the London School of Economics, has been a radio news director, local TV news reporter, CNN show producer and Emmy Award-winning ABC News broadcast producer. He is cofounder of Globalvision, an independent film and television production company. He has directed 25 documentaries, including his latest, Plunder: The Crime of Our Time, about the financial crisis as a crime story. He has been honored as a blogger and has written 11 books, including The Crime of Our Time, further detailing his findings regarding financial crime. He has reported from 60 countries. See Plunderthecrimeofourtime.com

Comments to Dissector@MediaChannel.org.

Danny Schechter is a frequent contributor to Global Research.  Global Research Articles by Danny Schechter

http://www.globalresearch.ca/index.php?context=va&aid=22972

The Philosophy Behind “Occupy Wall Street”

By: Vijay Prashad

“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a byproduct of the activities of a casino, the job is likely to be ill-done.”
– John Maynard Keynes, 1936.

September 27, 2011 "Eurasia Review" -- The International Monetary Fund’s Global Financial Stability Report is typically very sober in its assessment of the world. The current report, released on September 21, warns that the world economy is entering a “danger zone.” The IMF downgrades its estimate for global growth from an already low 4.3 per cent to 4 per cent , with U. S. growth cut from 2.7 per cent to 1.8 per cent . “For the first time since the October 2008 Global Financial Stability Report, risks to global financial stability have increased, signaling a partial reversal in progress made over the past three years.” In other words, all the measures taken to stem the hemorrhage caused by the global credit crisis of 2008 onward have run their course, and we are back to the day when Lehman’s shutters came down.

The IMF could not ignore the continued political and economic crisis in the Euro-zone, nor could it turn away from the credit downgrade of the United States. Nor indeed could the IMF blind itself from the turbulence of the financial markets (whose most dramatic victim was UBS, where its Delta One desk got run over by its short position on the volatility of the Swiss Franc). Three processes have sharpened the IMF’s report: first, the United States has been unable to heal the acute trauma in its housing market; second, the European banks are in an adverse feedback loop between balance of payments distress in Club Med (from Portugal to Greece) and their own reserves; and third, low interest rates have moved private finance away from the surface into the furtive world of the shadow banking system (hedge funds and so on).

Both Olivier Blanchard, chief economist at the IMF, and José Viñals, financial counselor at the IMF’s Monetary and Capital Markets Department, seemed a little more nervous than usual. Viñals knows the stakes in the Euro-zone. He used to be the Deputy Governor of the Bank of Spain, where the financial reserves look as bad as the water reserves in the Town of Dirt (Rango, 2011).

The mantra of the Atlantic world has been austerity. It is assumed that if government budgets are purged of social spending to balance budgets, growth will ensue. This is a strange kind of economics. A chronic problem is the lack of effective demand (“consumer confidence”), one that is indexed in the United States to the flatness of wages with momentary transfusions of “confidence” produced by cheap credit that has created an as yet un-burst bubble, personal debt; as of May 2011 that stands at $2.4 trillion. The massive cutbacks of government spending will only flatline demand, and produce no hope for any growth in the short run. Austerity programs might not increase consumer confidence, but they do indeed create confidence among the financiers who love the idea of “sound finance.”

The IMF identifies the problem on the one hand, and then puts its other hand into the blender: the current crisis cannot be solved until the politics is managed. The “political leaders in these advanced economies have not yet commanded broad political support for sufficiently strengthening macro-financial stability.” Financial and monetary tools are strained. What is needed is a more effective communications strategy, to convince the public to go along with austerity measures to create sound finance, and to do so by bringing down the ideological rhetoric that alienates the people from what the IMF sees as apolitical Reason. If only the hoi polloi could be made to see reason.

What the IMF and the governments of the Atlantic world do not acknowledge, for political reasons, is the class power of finance capital which controls the money markets where governments and the IMF must go to borrow if they wish to conduct stimulus spending or lending to distressed countries. The confidence of the financiers is a far more important emotion than the confidence of the consumers.

In a time of crisis, the humane approach would be to extend stimulus spending until such time as millions of people are not reduced to the condition of bare life. To do so, the governments must be willing, as the economist Prabhat Patnaik put it, to “exert adequate control over the financial system to ensure that public borrowing is always financed, so that the State does not become a prisoner to the caprices of financiers.” The debate between austerity and stimulus is carried on as if these are two rational positions held by two rational sets of people. Those who clamor for austerity are rather agents of the financial class, which is loath to see the value of its wealth decrease; those who call for stimulus are ethically correct, but absent a direct class challenge to the financiers, floundering on illusions. The only real solution to the north Atlantic crisis is, as John Maynard Keynes put it, to “euthanize the rentier.”

It is this impulse to challenge Wall Street directly that shows how reasonable and necessary is the Occupy Wall Street protest movement underway in lower Manhattan (not far from where George Washington was inaugurated President). Those who have decided not to leave their tarpaulin homes, and who are being brutally treated by the New York police department, have an instinctively better solution for the country than those who want to throttle demand further by austerity (the GOP) and those who want to call for a stimulus without any challenge to the financial mandarins who would rather send the U. S. economy into a swamp than lose their own power over the world economic system (Obama).

Absent a fight against finance capital: to call for austerity is an act of cruelty; to call for a stimulus is illusionary.

The IMF and the U. S. political class do not wish to challenge the financial class. Indeed, the IMF warns against “financial repression,” “With sovereigns under financing stress and economies struggling to deleverage, policymakers may be tempted to suppress or circumvent financial market processes and information.” This is to be avoided, says the IMF. They want the saviors to come from the Global South, which, the IMF notes, “are at a more advanced phase in the credit cycle.” What the IMF would like to see is China and India turn over their surpluses to the North as stimulus, for these countries to export less and import more.

What is so strange about this is that it was the IMF that acted as the spear of international capital when it advocated for India and China to become export-oriented economies and turn away from national-development policies. China is now retro-fitted to export cheap goods to the Atlantic economies, and its own problems with effective demand make it hard for its masses to buy Atlantic-made goods. Instead of having these countries turn their stimulus toward the creation of demand in their own countries (by lifting their populations out of poverty further, by infrastructural spending, by creation of new technological means to prevent ecological catastrophe), the IMF wants them to manage their “financial imbalances” by sending their money North. Nothing of the kind was asked of the North in the 1980s and 1990s, when the financial arrows pointed in the other direction.

The Chinese now say that they might help the Euro-zone out if Europe will follow some “conditions” set by the Chinese (the IMF language in the era of structural adjustment was “conditionalities,” such as the cut-back on human spending in the South during the 1980s as a precondition for loans). The Chinese want the Europeans to stop their law suits around market infringement, which is another way of saying that the Chinese wish to dent the intellectual property regime – one of the few mechanisms left that guarantee the jobless growth that sustains the United States. Why is China in a good way now? The IMF says that it is doing well because of its “policy-induced lending boom,” also known as its stimulus in 2009-10 that took place absent the overwhelming power of finance capital.

It is far easier to give China the evil eye than to point a finger at the financial class. All the talk about currency reval‎uation and barriers to trade are the pettifoggery of those with no real argument to make. Down at Wall Street, ordinary Americans have decided to stand up against finance capital. They have no need to take recourse in the drumbeat of economic xenophobia or of the illusions that the Buffets of the world are the forerunners of social justice. What they want is for the jackboot of finance to be lifted off the people of the world.

Vijay Prashad is the George and Martha Kellner Chair of South Asian History and Director of International Studies at Trinity College, Hartford, CT His new book is The Darker Nations: A People's History of the Third World, New York: The New Press, 2007. He can be reached at: vijay.prashad@trincoll.edu

http://www.informationclearinghouse.info/article29231.htm

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The Rise of the Wall Street Ruling Class-맥스, 케이티
The Wall Street Financial Crisis: A Mistake or a Crime?-애나, 수잔
The Philosophy Behind “Occupy Wall Street” -베로니카, 스카이