What’s melting down faster, the polar ice-caps or the Wall Street financial markets?

By Michael Novick, Anti-Racist Action-Los Angeles/People Against Racist Terror (ARA-LA/PART)

When Huey P. Newton, Minister of Defense of the Black Panther Party for Self-Defense was released from prison thanks to the “Free Huey or the sky’s the limit!” campaign led by the BPP, he was asked how it felt to be free. He said, “I have only been moved from medium to minimum security.” He understood, from his life experience as a Black man in the US and his time unjustly imprisoned for the death of an Oakland cop who tried to kill him, that even outside prison walls, he was still in prison, still not free.

Huey’s understanding is one that we all need to take to heart, because as of September 19, 2008, everyone in the U.S. is officially inside one very large debtor’s prison.

The settler colony peopled with indentured servants and imprisoned debtors from England, prepared to help steal the land of the indigenous people and oversee the labor of kidnapped and enslaved Africans, has come full circle. Thanks to the $1,000,000,000,000.00+ bailouts of AIG Insurance, of Fannie Mae and Freddie Mac, and of the stinking mass of “toxic” mortgages left to rot when the housing bubble burst, the US populace has taken on in a few weeks indebtedness greater than the entire equity value of all the companies on the NY Stock Exchange. Allegedly, Bush and the Fed took this action to avert total economic collapse (although whether they will succeed is still an open question).

In fact, it is simply more of the same process of corporate welfare, of socializing losses and privatizing gains, that has gone on since the advent of capitalism. The polar ice-caps, alpine glaciers and arctic tundra are melting due the “externalizing” of the costs of industrial manufacture and agriculture, internal combustion vehicles and fossil-fuel power generation. In a parallel fashion, the economic meltdown was caused by the transformation of the US economy under ‘globalization’ into one run entirely for and by global financial capital, where debt is repackaged as equity, monetarized and securitized. The ‘growth’ sectors of the US economy were weapons, prisons, housing, health care for a rapidly aging population, and the financial sector. Everything else is imported or out-sourced.

In the criminal justice system, the cops get carte blanche to use violence, the prosecutors pile on the charges and the ’strikes’ to get defendants to cop a plea, and the judges sign off on perjured testimony. In the economic system, loans that could never be paid back were wrapped up with slightly better loans to disguise the stench and pawned off as assets in ‘derivative’ markets. The brokers, the bankers and the Fed were given carte blanche to fleece the suckers. The technical name for one of these mechanisms is a “credit default swap,” but the more realistic name is a “long con,” (like in the movie ‘The Sting,”) or more simply, fraud. It simply exposes the truth that Pierre Proudhon voiced a couple of centuries ago: Property is theft.

The bailouts became ‘inevitable’ (under capitalism) when Bush failed to put through the privatization of social security and the investment of the “social security trust fund” in the stock market. Without that fix, the Wall Street profit junkies created a housing bubble, and new financial ‘products’ with which to inflate it, to feed their habit.

This political system is incapable of socializing medical care. It is so impoverished of publicly financed infrastructure that major roadways collapse in Minneapolis. Passenger trains and freight trains in LA run in both directions on a single track, and Metrolink, the government agency running the trains couldn’t afford simple safety equipment. Engineers were sweated, under contract, by a French low-bidder. The levees and homes are still not rebuilt in New Orleans three years later, and the poor Black people of Houston were left to sweat in the dark without help after Hurricane Ike. Yet remarkably, overnight, over a trillion dollars can be conjured up to bail out bankers and insurers who came face to face with the consequences of their own greed. In fact, the “bailouts” are not even real money, simply the assumption of new debts, the injection of new ‘credit’ into the system. Under the plan, the bankers and the Treasury will not even enable defaulting homeowners to escape foreclosure! And yet you are expected to pay for it!

Because unfortunately, debt no matter how it is dressed up is still debt. At some point, debt must be repaid. But since the debts always exceed the equity on which they are leveraged (check out by what multiple the principal plus total interest on even a “performing” mortgage exceeds the value of the property), at some point the roll-overs stop and the house of cards collapses. Then – miracle of miracles – some of the ‘bad’ debt is “written off” – it magically disappears as swiftly as it was created at the stroke of a banker’s pen – and the rest of it is “paid off” through asset sales, the imposition of ‘austerity’ measures and other forms of genocidal exploitation. Having dished this out for years in the third world, the US is about to get a taste of its own medicine on the receiving end.

Unfortunately, too, even if a collapse took place, it would not be the demise of capitalism. This crisis is an opportunity for further concentration and centralization of capital, for Bank of America to pick up Merrill Lynch cheap and one or two investment banks to eat the others. Capitalism as an economic system requires the periodic extinction of capital and of productive capacity in order to function, just as much as it requires growth. In the absence of a sufficiently large war to fulfill the function of extinguishing a lot of capital and ‘unprofitable’ productive capacity, massive bankruptcies will have to do. But don’t doubt that expanded war is somewhere over that time-horizon that Bush set for withdrawal from Iraq. As far as withdrawal from Iraq is concerned, you are of course aware that a horizon recedes as you approach it (or perhaps disappears completely like a desert mirage). After all, the US still has a base in Cuba, Guantanamo Bay, convenient for torture, over 110 years after the Spanish-American War. But as far as war is concerned, Iran and then China are looming right over that horizon. US economic and military planners have specifically targeted China for “destructive reduction in capacity” to overcome capitalism’s fatal contradictions.

It is unlikely, of course, that China will sit still for this, particularly as Chinese “savings” (read, the super-exploitation of Chinese workers) is the main source of any ‘liquidity’ still left in the US financial markets. The Chinese lend us money so we can buy their manufactures; they are unlikely to do so in order to finance their own destruction. The US is going to start intensifying the exploitation and austerity inside its “own” borders in a big way, thanks to the recent bailouts, even if the Chinese don’t start cashing in their chips, but even more so if they do. The fire sale of US natural and capital resources to European, Arab and Chinese capitalists, already underway, will accelerate. US capital is staking the house on its military.

The incredibly stupid George Bush declared, upon stealing the presidency for the second time, that he had earned political capital in the campaign, and he was going to spend it. Of course, capital is not supposed to be spent; it’s supposed to be invested, thereby allegedly generating wealth. The dirty little secret is that capital does NOT generate capital. The only sources of capital are the expropriation of wealth from labor, from learning (mental labor), and from nature (particularly land and water). If people started crying when gasoline reached $5 a gallon, what will they do when water is $5 a quart? Hopefully, when John McCain’s economic adviser complained that the US was “a nation of whiners,” he got it wrong. But up to this point, whining is about all we hear. Barack Obama cannot and will not save you. Only we can save ourselves and the planet from the vampires riding our backs.

It’s time to up the ante. Look to Bolivia, Venezuela, Mexico, Nigeria, Zimbabwe, India, where people are fighting desperately against the oligarchs and imperialism for their water, their land, and their very lives. Look even at China, where last year there were tens of thousands of illegal job actions and protests under conditions of great repression. In this nation-sized debtors’ prison, this prison house of nations, look to the prisoners, particularly the political and politicized prisoners who are educating and transforming themselves as they seek justice and liberation. Take inspiration! Fight back! Only the principles of solidarity, of mutual aid, of communal resistance, self-determination and sustainable self-reliance can guide us through the coming dark days and hard times. It’s time to shed our fear of the high and the mighty. All their wealth and power comes from the people and the planet they exploit and oppress. As we break our identification with our oppressors, we free ourselves, and we weaken them. Remember, if the working and oppressed people of the world unite, we have a world to win!

This editorial appears in the current issue of “Turning the Tide: Journal of Anti-Racist Action, Research & Education,” Volume 21, Number 5, September-October 2008. A free sample copy of the issue is available by writing to ARA-LA/PART, PO Box 1055, Culver City CA 90232, calling 310-495-0299, or emailing antiracistaction_la@yahoo.com. Subscriptions are $18 a year ($28/US international) payable to “Anti-Racist Action” at the above address. PDFs of previous issues are available at aratoronto.org.

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