Why GOP Administrations are Economic Failures that Prove Marx Correct

by Len Hart, The Existentialist Cowboy

When Bush Sr fought against, perhaps vanquished 'supply-side economics', it was hoped that the horrible Reagan years could be, would be consigned to the 'dust bin of history'! But no! It was left to 'Shrub', George W. Bush, to unleash unholy forces in order to breathe life into "trickle down theory" otherwise called 'supply side economics!

As it was taken off life support, it was surely Dick 'cyborg' Cheney who may well have yelled: It's ALIVE!

Cheney, of course, professed the Reagan doctrine: "Deficits don't matter". This is a bona fide case of terminal denial and accounts for supply-sider control of the Republican party. But what about Obama? He inherited a run-away train in search of its wreck. As Obama prepared to occupy the White House, the debt grew. Meanwhile, the caped villain (Cheney) and his budding monster(Bush) were still at work licking their chops and dreaming of fight night!

It's ALIVE! It's ALIVE!

Debt had accelerated during Bush's last two budget years. Although Obama had not been directly responsible for that acceleration, the train wreck had been left to him.

As the GOP are wont to do, Bush set records, in fact, the all-time record by increasing the debt by $1.1 trillion in a mere 100 days between July 30 and Nov 9, 2008.

Then there was the not-so-small matter of recession. To be expected, recessions cut tax revenues significantly and this fact may account for the GOP's sorry record of running up the highest debts and deficits! This has been the case since prior to the Great Depression. It is the pattern that is repeated in every GOP administration since H. Hoover's "Great Depression".

In this case, however, GOP mismanagement accounts for almost half of the deficit. We can be sure that the GOP were prepared to blame Obama for the deficit though his only crime was that timing. Machiavelli might have advised him to sit it out, let the GOP take the rap! Let the GOP face the music and dance quickly out to the door to oblivion. Blaming Obama for the full deficit was said to have been akin to "blaming him for not raising the tax rate to keep tax revenues up".

In times when the class struggle nears the decisive hour, the progress of dissolution going on within the ruling class, in fact within the whole range of old society, assumes such a violent, glaring character, that a small section of the ruling class cuts itself adrift or joins the revolutionary class, the class that holds the future in its hands.

Of all the classes that stand face to face with the bourgeoisie today, the proletariat alone is a genuinely revolutionary class. The other classes decay and finally disappear in the face of Modern Industry; the proletariat is its special and essential product. The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay, more, they are reactionary, for they try to roll back the wheel of history.

If, by chance, they are revolutionary, they are only so in view of their impending transfer into the proletariat; they thus defend not their present, but their future interests; they desert their own standpoint to place themselves at that of the proletariat. The "dangerous class", the social scum, that passively rotting mass thrown off by the lowest layers of the old society, may, here and there, be swept into the movement by a proletarian revolution; its conditions of life, however, prepare it far more for the part of a bribed tool of reactionary intrigue. In the condition of the proletariat, those of old society at large are already virtually swamped.

The proletarian is without property; his relation to his wife and children has no longer anything in common with the bourgeois family relations; modern industry labor, modern subjection to capital, the same in England as in France, in America as in Germany, has stripped him of every trace of national character. Law, morality, religion, are to him so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.

All the preceding classes that got the upper hand sought to fortify their already acquired status by subjecting society at large to their conditions of appropriation. The proletarians cannot become masters of the productive forces of society, except by abolishing their own previous mode of appropriation, and thereby also every other previous mode of appropriation. They have nothing of their own to secure and to fortify; their mission is to destroy all previous securities for, and insurances of, individual property.

-- Karl Marx, Manifesto of the Communist Party

In the U.S. it is the GOP which consistently advocates, perhaps fronts, the interests of its primary sponsor: the ruling elite of just 1 percent of the total population. In effect, every real person but those among the top 1 percent are without representation in what is said to be the world's largest "Democracy". Is it really a 'democracy'? It is ironic that while Marx is most demonized by this unholy alliance, it is the existence of the unholy alliance itself which proves Marx to have been correct about almost everything.

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Why this Crisis May be Worse than the Great Depression

by Len Hart, The Existentialist Cowboy

About one percent of the nation owning more than about 90 percent of the rest of us combined not only foresaw the impending crash but planned to benefit from it. GOP types have traditionally gotten rich by playing 'last man out loses'! A race to be first to 'get out' has triggered many a panic creating bargains to be picked up, fortunes to be made on the inevitable upside. The big difference now is that --this time --there may not be an upside.

The sheer size of this crisis is worrisome. During the Great Depression, the US still had viable industries that had not yet been exported to China by way of the Bushes and Wal-Mart. The US manufactured automobiles, refrigerators, radios and, later, televisions sets. The steel industry created Pittsburgh. Autos made Detroit. America's work and labor were the sources of its wealth. The right wing exploitation and export of that wealth is the source of our current poverty, the financial collapse and our impending slide into third world status. An increasingly tiny elite is the cancer upon the body politic and economic.

The US oligarchy demonstrates why it so foolhardy to transfer so much wealth to so few so quickly. These 'few' foresaw the crisis and triggered it by bailing out early. It is left to the rest of us to pick up the tab.

Something like 50 trillion dollars in derivative debt is far bigger than even the stock market. Derivatives are collateralized debt obligations, leading to the erroneous conclusion that 'debt is money'. The current crisis is proof that it is not. Moreover, anyone who has ever taken a course in accounting knows the accounting equation: net worth = assets - liabilities. That the money changers swapped these instruments did not change the accounting equation. Money owed you is not money in the bank --a lesson that is, of late, very expensive.
Many have said that 'we are doomed'! Our borrowing will be financed by our own savings. Already, Beijing is poised to become the financial capital of the world.

We can thank Wal-Mart and GOP policies for that outcome. In previous articles, I have traced the rise of the Axis of Wal-Mart/China to the faustian bargain Bush Sr cut with Chinese poohbahs as he paved the way for Nixon's infamous visit to the Forbidden city back in 1973. The quick rule of thumb: whenever the US is betrayed, you can be sure to find a GOPPER in hiding whenever the shit hits the fan.

Lately, it has become fashionable to 'spread the guilt' around! What's up with that? I suspect another scheme, another right wing tactic. Fact is GOP 'trickle down' policies have had the measurable effect of enriching just one percent of the nation's population. When the GOP has been caught holding the blood-dripping dagger over the corpse I am in no mood to listen to crap like: 'but Democrats are 'bad' too!' Not this time! Democrats were in office but eight years out of thirty! But in those measly eight years the trend in which wealth flows upward was reversed only to be undone by Bush Jr.

So --if you wish to dilute the open/shut case against Reagan/Bush/Bush Jr cite me some facts and spare me the bullshit!

It was not so long ago that a Democratic president had left to his incompetent GOP successor a whopping budget surplus, a growing economy, the lowest unemployment in decades, and --for Republicans --the most worrisome trend of all: the rich were no longer getting richer as they had done during the Reagan/Bush years. I can think of only one group of people who are most miserable when times are good! REPUBLICANS!

Historically, Republicans have always benefited from recessions.

1. Recessions are not caused by declining stock markets but seem always to be accompanied by them and are often predicted by them. Republicans play the game of 'last man out wind', taking their profits in numbers that often cause the panic. Only insiders benefit. Others are forced to take their losses.
2. A depressed market becomes an opportunity for the elite oligarchs to get back in. This elite, in fact, controls the market. Everyone else is exploited by the oligarchs.
3. It is easy to make money 'selling short' if you have an insider's knowledge of the market. That fortunes were made short-selling subsequent to the 911 attacks seems to me persuasive, perhaps conclusive evidence that 911 was an inside job. What was known by whom and when? No wonder Bush covered up 911. The answer to those questions would have exposed a murderous conspiracy, perhaps 'insiders' inside Bush's criminal and treasonous administration.
4. Unemployment always rises during times of recession. Should they survive, companies will hire from a larger labor pool at lower wages, lower salaries, reduced benefits, and less vacation or sick time. The GOP despises the Clinton years --not because they were bad but because they were good years and fondly remembered. Europe after the Black Death has that much in common with the Clinton years. The labor supply had been depleted by plague. A would-be employer often had to accede to a worker's demands--better working conditions, more money, a place to live! The serfs had been freed and it was the beginning of the end for Feudalism. I had hoped that a less traumatic cataclysm would have already freed modern day "corporate serfs." Alas! My hopes are dashed. If the US survives at all, you can rest assured that the ruling elite will hire from an impoverished and growing labor pool. Wages and salaries are sure to be inadequate and, as a result, the 'recovery' (should there be one) will be slower for it.
5. Only the oligarchs benefit when many businesses go out of business during depressions which have the effect of 'weeding out' the competition, consolidating oligarchical gains. A conservative, therefore, is someone who supports a free market when it benefits him and the oligarchy at every other time.
6. Recessions are not always accompanied by a decline in prices. As many businesses fail, competition is decreased and higher prices result. Given the demand for a particular product, a company may actually earn more money selling fewer units. The difference comes out of your ass. Such demand is called: inelastic, i.e. revenues increase as prices increase --even if total sales should fall.

Unless someone blows the whistle or exercises some clout, the increasingly tiny elite of just one percent of the US population will be even richer at the end of this ruinous and tragic financial collapse. You can be sure the oligarchs foresaw the collapse and hastened it. You can be sure that they alone will benefit from it as they have benefited from every other such crisis in US history.

Depressions are defined by a 'contraction' of the supply of money. It has been asked: 'where did all the money go?'. Much of it was exported to offshore bank accounts in anticipation of a domestic collapse. But much of that money didn't really exist. It was just paper. It became fashionable to consider DEBT as money. But debt is not money and never was. Anyone who has ever considered the significance of the accounting equation --capital equals assets MINUS liabilities knows the truth of it. Nor is 'debt' money for those holding the paper. Loans are good only when backed up by collateral or, in some cases, one's earnings and ability to re-pay. As in all crashes, a 'bill' has come due but cannot be paid.

If debt is not money, what is? A question that was debated just prior and during the Great Depression and, again, in the 1980s. At that time, there were attempts to create a stable ERM --an Exchange Rate Mechanism for European currencies. A gold standard was also discussed. In both cases, it was 'labor' that sucked up the costs of implementation which consisted of efforts to force manufacturers to keep costs down. Again --it is not wealth that trickles down. It is 'costs' that always trickle down and labor is always expected to suck up the costs and consequences of such schemes.

More recently, a 'gold standard' was discussed. Who would have borne the costs of such a scheme when it became clear that the US cannot back up but a fraction of its 'currency' with gold? Ron Paul, I believe, advocated a tax rebate for precious metals purchases. That would have hastened the collapse by encouraging a run on the dollar! But, in fact, the ordinary working person does not invest in precious metals and, if he had done, the decline in consumer spending would have brought about the collapse of our economy even sooner and, arguably, the effects would have been even worse.

Following is a PBS NEWS HOUR Interview with Nassim Nicholas Taleb of October, 21, 2008. A Famous economist, Taleb authored "The Black Swan". Also appearing on the video is Dr. Mandelbrot, professor of Mathematics. Both point out several reasons that make the current crisis worse, more serious than the Great Depression.

Worse Than the Great Depression

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