LEFT INVESTORS IN THE STOCK MARKET:

WILL THE RULING CLASS MAKE A SOFT LANDING FOR ITSELF AND FOR THE REST OF US?

This article is a further implementation of A Memo from Doug Regarding Current Conditions posted elsewhere on this Blog.

It reflects my own ongoing concern and reactions to current events and policies.

Doug Henwood, publisher of the Left Business Observer, admits in the latest issue that he has been predicting an economic depression and a political rebellion from below ever since he started the paper in 1986. All of the political and economic tests spelled trouble and still spell trouble. He is chagrined that he has been wrong and that it has not happened. Why has there been no reaction when the rich have gotten immensely richer, the middle class stagnating or eliminated, the poor poorer and the extreme right wingers have captured the government? .

Henwood lists the following reasons :

• The ruling class has demonstrated that it is willing to spend whatever it takes of our tax money to bail out capitalism…like bailing out the S & L with $200 Billion, and Citibank, and Chrysler and by doing whatever it takes with manipulating the interest rates and printing paper money to keep things going.

• The poor white people of this country really like Republican market economics… These poor are ruggedly individualistic, alienated from a sense of community, and risk- taking by temperament. It fits with the Yankee, Protestant, Presbyterian, Calvanistic idea that people really get what they deserve. Poor whites have a deep sympathy for the market and the law of the jungle. They believe that the rich deserve their riches and the poor are being justly punished for not being thrifty enough or holy enough. This belief is a fantasy. It is not true. It is neither accurate economic analysis, nor decent theology. But enough poor whites believe it so that this belief stabilizes the status quo and existing ruthless capitalism. A guy in the NYT magazine section once wrote that the vast majority of Americans, poor included, suffer from the cruel delusion that they too will someday be rich.

• There is no competing doctrine or vision and no political focus as there was in 1930. Everybody believes that Socialism is dead and that there is no alternative to uncontrolled capitalism. Those like Henwood who try to put forth a competing vision are simply ignored. (Doug Page would add that this is due to the overwhelming power of the ruling class over the media and the Schools and Universities, and the Churches. No critic of capitalism will ever get tenure or pay off a church mortgage. Nevertheless, Henwood is right: there is no viable competing vision.)

Doug Page adds the following to Henwood’s analysis:

· Millions of people love to gamble, to go to the Casinos, to vote for more gambling, and to buy lottery tickets, all as a part of their delusion that they too can get rich. These people do not support taxing of the rich for the simple reason that they do not want to be taxed when they get rich. Even my radical daughter Debbie said that she did not begrudge the rich being rich so long as they did not get in her face. So there is no demand for economic renovation or populism. There is not even a demand for health coverage for all. The Democrats with their constant polling reflect this.

· Even poor people are fat and well fed. Obesity among the poor is a national problem. Fat people are unlikely to revolt. I went to an Alcathon 24 hour celebration of the New Year with C. Jay. There were a lot of poor people there and a few middle class business and professional types, all recovering alcoholics. 95% of them were obese. Also people are emotionally and “intellectually” fed by the constant free circus of TV. Casinos and lotteries are now everywhere accessible. Finally, the sexual revolution and the pill have come. Men and women no longer experience the alleged lure of free loving socialist or communist women. So, unlike 1929, the people now have bread and circuses, the freedom to gamble, and available sex. Thus they are politically content at a rather profound level. They think they have a lot of freedom.

So Doug Page has the following questions and observations:

1. Where are the poor people getting their money to keep buying? They have crummy low paying jobs. They have massive credit card debt.

2. What has happened to Henry Ford’s observation in the 20s that you have to pay workers enough so that they can buy Fords and other products capitalism produces? World wide, there is not enough buying power to keep capitalism going. The Chinese and Indians working for pennies per 18 hour day can not afford to buy much. Americans are maxed out on credit cards and already spending more than they earn. With the rich siphoning off the wealth, where do consumers get enough money to buy enough to keep capitalism expanding? A possible answer: The ruling class will tax the poor and give money to employers on condition that they hire more people. The ruling class will still be able to siphon off as much as the traffic will bear for itself. The ruling class will start a major war coupled with a draft of civilians to fight it if necessary. Capitalism as a tapeworm on humans and a tornado in the human community will continue. The ruling class did this with S & L, Citco and Chrysler. This is the difference from 1929. Then, the ruling class was ideologically determined to let the market do it all. By 2007, the ruling class has learned a lot from the New Deal and from Keynes and from Marx. The ruling class is willing to use governmental and military power, and to spend our tax money on whatever it takes to keep the status quo profitable for itself.

3. How long can a political economy that rests on delusion and fantasy survive? We humans who are not part of the top 1% ruling class are like frogs put in water that is slowly rising to a boil. We may die before we notice that something is drastically wrong.

4. What about the effects of the national debt, the budget deficit, the trade imbalance, and the massive individual, corporate and government debt? The government will simply print more paper money to keep things going.

5. Henwood says that inflation and depression would hurt the ruling class too, so the ruling class will not allow it to happen. Henwood may be wrong. Inflation is a massive transfer of wealth from the poor to the rich. Just exactly how would the ruling class be hurt by a massive inflation? The ruling class would end up owning everything and switching their money to gold, land or a stable currency. Monetary wealth is not an absolute thing. It has to be measured against something to have value. Vis a vis the poor in a massive inflation, the ruling class will be much better off. In a world wide depression, the dollar may be worth a penny, but the ruling class will have all of the pennies and all of the non-financial assets. They will protect themselves with gated communities, security guards, police and armies. So how would the ruling class be hurt? The ruling class would be hurt only if the people at long last revolted like the French did in 1789.

6. It may be that the ruling classes in US, Britain, Europe, Saudi Arabia, China and India are now one capitalistic ruling class without national boundaries, but with the common goal of keeping things going for the ruling class. The ruling class is now doing this with a continuing war against “terror.” It still has to get purchasing power to the masses somehow. . The ruling class can give money to employers of millions of security guards, police, ID checkers, prison builders, and highway builders. They can spend unlimited money on defense, spying, covert operations, and law enforcement.

7. We still have the “triple triage” of global warming, peak oil, and an economy supported by borrowed money, fantasy, and delusions. The ruling class is doing nothing about these coinciding urgent problems. It is not a question of IF, It is only a question of WHEN that the ruling class empire will fall. We human “frogs” must become vividly aware of what is happening to us.

Dated: January 2, 2007

Douglas R. Page, Tucson, Arizona dougpage2@earthlink.net