by system
failure
In the 20s
America, there was an unprecedented upsurge consumerism and a
tendency for easy money. Something similar happened in the West in
general, especially since the early 90s onwards. The great crash of
29 and the misery brought to millions of people, was essentially a
big victory of the big bankers and speculators who made huge profits
on the "corpse" of middle class, and so the Roosevelt
administration was forced to turn to the Keynesian economic model
where the economy could be restarted through the state as a basic
investor.
The
predecessor of president Roosevelt and US president during the great
financial crisis of 29, Herbert Hoover, from the Republican party,
did not believe in the welfare state, but in austerity and fiscal
discipline. It is a perception that currently imposed by Merkel
government in the eurozone, in contrast to the American government
which, traditionally, focus on growth and job creation especially
during the presidency of Democratic presidents. But the complete
predominance of neoliberalism, rapidly changes policies implemented
today in the Western world.
The
decline of deregulation and the "New Deal"
Roosevelt
implemented an aggressive policy of state investments in order to
restart the economy and fight unemployment which had reached at
nightmarish levels after the Great Crash of 29. Moreover, new
infrastructures created, to benefit in many ways the American
society. One example is the state company Tennessee Valley Authority
(TVA), created in May 1933, to construct , among other things, flood
control projects and dams producing electricity and boost the
economic development of the Tennessee Valley, a region which was
particularly affected by the economic crisis. Private companies were
particularly dissatisfied, as were excluded from the program and lost
the chance for big profits.
Roosevelt
faced negative criticism from across the political spectrum. The
American economic elite criticized him because it didn't want to pay
extra taxes for the "New Deal" implementation. Even the
U.S. Supreme Court moved against him, considering that many
legislative settings of the "New Deal" were
unconstitutional. Propaganda had been unleashed by the economic
elite, in an attempt to baptize the policies of "New Deal"
as Socialist or even Communist, something which happens today in
America, but in Greece as well.
A quote from
a Roosevelt's speech is characteristic: “A few timid people, who
fear progress, will try to give you new and strange names for what we
are doing. Sometimes they will call it "Fascism," sometimes
"Communism," sometimes "Regimentation," sometimes
"Socialism." But, in so doing, they are trying to make very
complex and theoretical something that is really very simple and very
practical.”
Despite its
imperfections, Roosevelt's "New Deal" created millions of
new jobs and new infrastructure for the benefit of all American
citizens, boosted some sectors such as agriculture, strengthened
social security and boosted the economy in general. The response of
Roosevelt, "of course we spend money", to his opponents,
captures the perception of his government, giving importance to the
prosperity and relief of people and not to the strict austerity for
the sake of economic indexes. Indeed, while in 1933 the national debt
was 20% of GDP, by 1936 this figure almost doubled, but what mattered
for Roosevelt was to relieve American citizens and give them hope and
perspective.
What
happened until the Obama administration
While
Roosevelt, despite the strong criticism he received, was able to
impose a series of reforms that literally transformed the American
state and gave to it a prominent role in the recovery of the economy,
against the interests of big capital and for the benefit of the
American people, Obama now faces a hard war for the "Obamacare",
only one reform trying with great effort to pass, which focus
exclusively on health and social security.
Today
things are very difficult for Obama and for anyone who wants to pass
laws that would enhance the welfare state and would benefit the vast
majority because of the complete domination of the neoliberal
doctrine, favoring a financial oligarchy, on top of which, the
biggest private banks stand.
The
first big victory of the big bankers recorded in December 1913, when
under Woodrow Wilson administration, the control of dollar finally
passed to the big private banks through the Federal Reserve Act. For
the record, the final signature by the president Wilson came just two
days before the Christmas holiday of 1913, if this means something.
Thus, the US central bank continued to be "Federal" only by
name, since the complete control of the quantity and flow of money,
finally passed into the hands of the big bankers.
Although
the Great Depression was a field test of the new conditions, the gold
standard which was active at that time, had prevented "Federal"
Reserve to print money at will, uploading with more debt the
government. The bankers could not fully control government through
debt and so Roosevelt, along with his strong personality, managed to
pass the laws he wanted, despite the war against him.
After
WWII, there has been an attempt for market regulation through the
Bretton Woods Conference, but in 1971, Nixon ended the direct
convertibility of the US dollar to gold, opening the door for the
total dominance of neoliberalism and the big banks.
Little
later, Milton Friedman and the Chicago Boys conducted the first major
neoliberal experiment, using Chile of dictator Pinochet as a lab rat.
Reagan and Thatcher who were fanatically committed to the neoliberal
doctrine, extended its dominance during 80s, by applying the
respective policies favoring deregulation and dismantling of the
welfare state. In 1992, the former banker and CEO of Citigroup,
Walter Wriston, finally announces the total dominance of
neoliberalism in his book "The twilight of Sovereignty",
while the same year, the chairman of the "Federal" Reserve,
Alan Greenspan, "warns" the newly elected president Bill
Clinton, to withdraw his campaign commitments for social benefits, as
he claimed that, the deficit was reached dangerous levels.
Subsequently,
we have twenty years of financial bubbles and failed policies, with
the IMF intervening in many areas of the planet. The only winners
were the big banks and speculators, while the economies of many
countries were destroyed.
Obama:
probably wants, definitely can't
If
one take a look at the data, can see that the share of the US
government debt held by the "Federal" Reserve reached
record levels in 2011, reaching 11.2% of GDP, the highest since 1940
onwards, and possibly the historically higher. In 2012, this rate was
also high at 10.6% of GDP. Only once this figure reached such levels,
in 1946, i.e. shortly after the end of WWII, when it reached
10.7% of GDP. [Table 7.1,
http://www.whitehouse.gov/omb/budget/historicals]
The
spiraling debt of the Federal Government to "Federal"
Reserve, is due to repeated quantitative easing policies, i.e.
primarily "printing" new money, supposedly made to
stimulate the economy. Instead, however, the money went solely to
bailout biggest banks, some of which participate in the "Federal"
Reserve! Which means that, money returned to the banks through a
circle, while uploaded US government with more debt, which will be
passed on to future generations! Unanswered questions remain also,
about the case on the basis of which, the "Federal" Reserve
secretly supplied through the "back door" with more than $
9 trillion, various financial institutions with questionable balance
sheets during the financial crisis in the US. Nobody seems to deal
with this issue today.
[http://www.counterpunch.org/2010/12/20/the-tax-payers-tab-a-cool-9-trillion-and-then-some/]
The
wealthiest only see numbers and not people. The growing population
means for them "more taxes", while the government shutdown
means "less taxes". While Roosevelt did so many steps to
reform the state and to relieve the American people, Obama cannot
pass neither one legislation for the health and social security. The
visit received from leading bankers shortly after the announcement of
the US government shutdown is characteristic. Bankers don't pretend
anymore because they want to show clearly who is the "big boss".
And
this is not far from truth since, the introduction of dollar as the
global reserve currency and the rapid rise of computer technology,
made the US "Federal" Reserve completely dominant. So, if
China for example, would theoretically require to be paid in dollars
for the entire US debt which holds, in just one day, this could be
done practically with the push of a button on the computer. China's
share of US debt would pass automatically to the hands of the
"Federal" Reserve. One easily understands that any American
government is fully controlled by the "banksters".
Bankers,
who lie at the top of the economic elites, want to secure the
ultimate goal of the neoliberal doctrine, which is the dissolution of
the nation-state. This would extricate economic elites from state
supervision and taxes for the welfare state, which is in favor of the
economically weaker, and would finalize their dominance through the
growing concentration of wealth in a global environment of full
deregulation. So, they do not want in any way to open a new cycle of
a Roosevelt type state intervention because this could hinder their
ultimate goal.
So,
the bankers in particular, do not want to risk the appearance of a
"mad" politician of the Andrew Jackson type, who could
nationalize central bank and zero national debt because that would
mean the end of their absolute sovereignty.
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