The Wall Street Bailout Will Not Jump-start “Our” Capitalism

Plan B

Despite all of the talk and promise of hope and change, it is now apparent that President Obama plans to try to restart capitalism as it was prior to August 2007. He proposes to try to restore the status quo just prior to the present crisis. He also plans to use public funds, our tax money, “as much as is necessary” for this purpose. The total already promised is $7.3 Trillion for Wall Street. This is $28,000 of debt for each one of us, our children and grandchildren. If Obama goes ahead with his proposed stimulus package for Main Street, it is estimated that will cost at least $7 Trillion more. That will be a debt of $56,000 for each of us. Obama promises to help both Wall Street and Main Street, both the wealthiest 1% and the “middle class,” a classification that contains ever diminishing numbers. Those of us who are not a part of the wealthiest 1% are typically economically insecure, worried, poor, and getting poorer in terms of medical care, housing, and even adequate nutritious food, and the new taxes necessary to pay off this tremendous debt. There is an irreconcilable conflict of interest between the top 1%, Wall Street and the very rich, and the bottom 95% consisting of Main Street, the Middle Class, the poor, the homeless and the destitute. Obama now seems to be a servant of Wall Street. We hope that he is a wise prophet with secret future plans, when he promises that we are all united Americans with a common need and a common goal.

President Obama does not now acknowledge how very sick and fragile our capitalism was in August 2007. We were overburdened with credit debt. The economy was kept going by tempting us into more debt by issuing multiple credit cards, and by selling us overpriced subdivision houses with mortgages that we could not afford. As we shall show below, the subprime mess was a natural mutation of the dynamics of our capitalism.

However, most of us continue to give Obama the benefit of the doubt. We have no other choice. We hope and we pray that he, like Lincoln, is making every possible effort to harmonize profoundly conflicting ideologies and levels of wealth, and that he will ultimately do what is right and possible for mankind and fulfill our yearning for hope and healing change. We hope that he will do this without another Civil War, and without the loss of our liberty.

All we can do right now is to raise questions: Will Obama’s present plan to give Wall Street $7.3 Trillion without effective conditions really stimulate the whole economy? Will Obama’s efforts, priorities, and huge bailouts rescue Wall Street and the top 1% so that capitalism will be jump started for them and for all of us?

President Obama’s selection of University of California Professor Christina Romer as his head economics advisor gives us a hint of what he plans. She, so far as we can tell from her writings, has never studied nor even acknowledged the existence of capitalism’s inner dynamics. She seems to assume that capitalism, if left to itself, will work smoothly and permanently with full employment. The insight that we now have as to her interests and beliefs comes from her entry on “Business Cycles” in the Library of Economics and Liberty.

As to the causes of business cycles, recessions and depressions, she writes:

…there is no reason why business cycles have to occur at all. The prevailing view among economists is that there is a level of economic activity, often referred to as full employment, at which the economy could stay forever…. If nothing disturbs the economy, the full employment level of output, which naturally tends to grow as the population increases, and newer technologies are discovered, can be maintained forever.

She seems to believe that our capitalism can be controlled simply by tweaking the money supply and the interest rates. If these cycles cause pain among us, she writes: “The advent of unemployment insurance and other social welfare programs means that recessions no longer wreak the havoc on individuals’ standard of living that they once did.”

In her view of our capitalism: “Everything is grand in Kansas City. Everything is good as it can be.”

Although she is said to be a specialist in the causes of the Great Depression, her academic work and writings seem to reflect her interest in simply uncritically and non-judgmentally observing capitalism, and measuring its external movements and tendencies. She assumes capitalism is at least potentially a stable, socially useful system for all of us. She seems to assume that only minor tweaking is needed to keep it going. She does not show interest in the inner workings of capitalism, its tendency toward monopoly, overproduction, and imperialism, in its creation of a tremendous disparity between the rich and the poor and the resulting political power, and its longstanding need for ever increasing public expenditure to avoid economic depression.

She thus assumes a capitalism that has never existed anywhere, at any time. No manipulations of money supply and interest rates have ever made capitalism work with full employment. Born in 1958 and coming of age in 1978, she has never personally experienced or witnessed the pain of the Great Depression. She has apparently not been much influenced by John Steinbeck’s book, Grapes of Wrath whose main character Tom Joad says regarding our capitalism: “There is food to eat and people to eat it, but them two cannot get together. There is work to do and people to do it, but them two cannot get together either.” Professor Romer thus deprives herself of much relevant data, insights, and actual experience of the real workings of capitalism during strikes, on the picket line, in the legislative halls, among the victims of industrial pollution, with the sick whose only source of care is the hospital emergency room, and among the homeless, unemployed and underemployed. She apparently has not read Barbara Ehrenreich’s book, Nickel and Dimed about a woman’s unsuccessful effort to survive in our real economy. She also deprives herself of those who have studied the real inner workings and dynamics of capitalism, or she finds it professionally advantageous to ignore them. (No capitalist business or corporation has ever provided grants to professors or graduate students to study the defects of capitalism.)

The point of all of this is that neither Professor Romer nor President Obama can devise remedies and solutions for the great crisis of our capitalism unless they know the real causes of the crisis.

Feeding more hay to a sick elephant will only make it sicker if the elephant has cancer in its digestive tract. The evidence shows that our capitalism has “cancer of its metabolism.” The evidence shows that ever since 1980, capitalists could not make a profit producing things that people really need. The fact that capitalist employers draw out tremendous salaries and dividends from the production our labor creates and the fact that investment banks draw out more in interest, leaves us employee-consumers with insufficient wages and salaries to buy the goods our labor has produced. So the employers have “overproduction.” We still have needs, but there is no profit for capitalists in meeting our needs. They fire us and move on to some other activity where they can make a profit, first overseas in economic imperialism by hiring employees to produce there, at even lower wages.

When even imperialism produced more goods that could be sold, capitalists turned in 1980 to what has been named Financialization. Desperate for new sources of profit, capitalists began to buy and sell each other’s companies using the easy credit from investment banks to do so rather than their own accumulated profits or issuing stock. (Interest is tax deductible, while dividends are not.) They also began to invest in subprime mortgages, and then in the many levels of collateralized debt obligations based on these new mortgages. These three or more levels of collateralized debt obligations provided quick Ponzi scheme type profit for Robert Rubin and his investment banks, but produced absolutely nothing that human beings needed. This is how capitalism actually has worked during recent history. This illustrates the inner dynamics of capitalism. As we see, capitalism was very sick even in 1980 in that there was insufficient profit making opportunities in producing what people needed. Every year from 1933 to date, capitalism has needed tremendous contributions of public money to stay out of depression. Capitalism has never been robust on its own without public money. It has always been fragile. Our capitalism’s mutation from one level to the next is set forth in detail in my previous article, “Why is Our Capitalism Failing Us?” published in Dissident Voice.

There simply is no credit crisis. There is a demand crisis, a crisis among us voter consumers consisting of our inability to buy what we need. We need more credit like we need a hole in the head. We are already maxed out on credit. The real problem is that people do not earn enough from their labor to buy what capitalism produces. There is an “overproduction” of things that can be sold at a profit, but there simply is not an overproduction of things we really need. So it is a pure criminal theft of our money to give $7.3 Billion to investment banks, their CEOs and shareholders in the hope that they will again make credit available. This scandalous gift of public funds is aimed at a problem that does not exist and will do absolutely nothing to solve the problem that does exist. A policy that is aimed at providing profit making opportunities for investment banks on Wall Street will not even produce profit for them. It does absolutely nothing to increase our purchasing power or our earnings or our well being. If we were eagerly ready to pay for more cars and houses, you may be sure that Wall Street banks would find a way to finance them. We are not. We cannot. We have no earned money with which to buy. THAT is the problem. The current strategy involves spending $7.3 Trillion in an outright gift to bankrupt ineptly managed investment banks and insurance companies to relieve them of the liability of now worthless collateralized debt obligations. It is then hoped that they will again extend credit. This is not working, it could work for us if at all only by trickle down, and it cannot work even for Wall Street. Even if the banks are forced to lend money to businesses and credit card holders, there is no way to force anybody or any company to borrow. There is no way this trickle down will create adequate purchasing power among those with needs. It does nothing to solve the inner sickness of capitalism. There is absolutely no reason why we the public should bear the cost of Robert Rubin’s stupidity and take over the massive liabilities of the investment banks in these worthless collateralized debt obligations. In order to qualify to invest in those, one had to be a sophisticated wealthy investor. Let Robert Rubin and other investors like him bear the loss of their stupid investments. It is idiotic to let Robert Rubin and his protégés now influence the policy of bailing them out when they are responsible for the problem.

With an accurate and realistic analysis of the dynamics of capitalism, one can then fashion pragmatic reforms or substitutes as circumstances demand, a Plan B.

We have plenty of humans willing and anxious to work. We have immense human needs, many of them unmet. We have thousands of businesses ready and willing to meet those needs, although some needs like medical care cannot and should not yield a profit. What is missing is a source of earned purchasing power. Instead, to get things going why not set up a Federal Loan Bank and provide the necessary credit at low interest rates directly to local healthy banks so that they can function normally? These local banks can then meet the routine needs of business for flooring loans, seasonal loans, and other normal long and short term loans. Spend the $7.3 Trillion on extending and increasing Unemployment benefits, in retraining, building new sources of energy, and rebuilding our bridges and levees. Let’s spend it for Universal Health Care. If necessary let our government be the employer and the lender of last resort. Let Robert Rubin’s investment banks go bankrupt. Once things are going, we can then consider further steps to solve capitalism’s inner sickness. For those human needs that capitalists cannot meet adequately and still make a profit like universal health care, our government can become the employer of last resort. For example, our government can hire doctors, nurses and physician’s assistants. It can place a physician’s assistant in a drop in clinic in the corner of drug stores to provide immediate health care. We can then relieve our employers of the expense of providing health care and Worker’s Compensation Insured medical care for job injuries.

Since our government is not choosing direct solution, it is apparent that this is a class issue. Wall Street, Robert Rubin and the top 1% naturally prefer that the $7.3 Trillion be given to them to compensate them for their stupid investments. We do not need to yield to these outrageous demands. Our President and our government are so far demonstrating that they are subject to the control of Wall Street. Our alternative is to let the investment banks go bankrupt and not us. They created their own problem. There is no sense in letting them take us down with them.

It is also obvious that President Obama, at least for the present, is adopting as his very own, and trying to refuel, the already existing class war of Wall Street and the very rich against the rest of us to convert every minute of our existence into a profit making opportunity. This is obvious from his priority of helping Wall Street first and asking absolutely nothing substantive in return. It is obvious from his support of the Wall Street policy of helping investment banks and insurance companies, but not Ford Chrysler or GM. The Wall Street policy is to let the auto companies go through bankruptcy to escape their union contracts and health insurance commitments. Wall Street will then help these companies after bankruptcy. The current policy will not work. A Great Depression will soon be upon us. We hope that brilliant, pragmatic, compassionate President Obama and his economic advisor Professor Christina Romer will then stop listening to Robert Rubin’s “solutions.” We hope that they will then use our public money to solve the inner sickness of capitalism, and to meet our needs. We will then be truly united Americans with common needs, dreams, and more equal political power.

Doug Page is a retired lawyer for unions, a former Democratic politician, and a life long observer of government, unions and business. He can be reached at: Read other articles by Doug, or visit Doug's website.

37 comments on this article so far ...

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  1. Petronius said on November 29th, 2008 at 10:00am #

    excellent article about the present financial ‘crisis’. the plot all along has been to bankrupt the economy to kill the last vestiges of union power, reduce health costs to employers and to invest wall street with the task of refinancing those industries who have dis-empowered their workers. next will be the so-called ‘overburdened’ social services for wall street to ‘save’ and privatize. capitalism is re-arranging itself as a rappel a l’ordre for a more stream-lined exploitation in this country at the cost of the masses here and in the rest of the world.

  2. RGB said on November 29th, 2008 at 10:39am #

    So, now begs the question: what is Plan C?

  3. Don Hawkins said on November 29th, 2008 at 11:53am #

    There are people who want to make men’s lives more difficult for no other reason than the chance it provides them afterwards to offer their prescription for alleviating life. Nietzsche

    Since our government is not choosing direct solution, it is apparent that this is a class issue. Wall Street, Robert Rubin and the top 1% naturally prefer that the $7.3 Trillion be given to them to compensate them for their stupid investments. We do not need to yield to these outrageous demands. Our President and our government are so far demonstrating that they are subject to the control of Wall Street. Our alternative is to let the investment banks go bankrupt and not us. They created their own problem. There is no sense in letting them take us down with them. Doug Page

    Is there really anything that can be done to stop this insanity? Probably not, wait there could be one way. We the people slow it down we don’t pay our bills like insurance on our car or insurance on the house if we can and no flat TV’s No no no only what we need not want. The amazing part is we don’t even have to try and do that it is already happening and now more money goes too the 1% because they are nut’s. There not nut’s, I think there nut’s. Their stupid investments more like insane investments and now they need more money funny money so they can lend it to us not me and try this one more time and keep us slaves to the system and the money they lend us is our money in the first place and this is all done so as to go out in style because as we all known my kids and there kid’s have no future anyway. Am I missing anything here? Yes you could certainly say there are people who want to make men’s lives more difficult for no other reason than the chance it provides them afterwards to offer their prescription for alleviating life. Think Frank one plan.

  4. Ron Horn said on November 29th, 2008 at 1:36pm #

    Plan C will, must, be provided by working people after this present barbaric system wrecks its final devastation on the planet and its inhabitants. Their is no other solution if the human race and other species are to survive. And it looks to me like the odds are against us.

  5. quasigovy said on November 29th, 2008 at 1:44pm #

    Interesting take…….

    The only major mistake I see, and it is a commonly made when quoting economists, is confusing Romer’s normative analysis as positive analysis.

    Romer makes comment as to “what should be” (normative) when speaking on business cycles, not “what is” (positive).

    She knows we have a mixed economy, not an entirely free one, and that many current business models/regulatory models are perverse in the U.S. What she is describing is what she correctly sees at what we should strive for our economy to be.

    Quoting and interpreting an economist’s viewpoint should be done with more care than has been demonstrated in this article. Half assing it spreads ignorance.

  6. Don Hawkins said on November 29th, 2008 at 2:22pm #

    Half assing it spreads ignorance. Thank you interesting concept I like it has a real ring to it. Spreads ignorance may use this concept in the future, thanks.

  7. George said on November 29th, 2008 at 3:07pm #

    EXCELLENT post. These needs to be required reading for our elected officials.

    What a total robbery of the American people right under their noses!

  8. paul said on November 29th, 2008 at 3:10pm #

    STOP spending, START saving.

    Boycott the big Banks like Citicorp. We need to stop being led like lambs to our slaughter!!


  9. None said on November 29th, 2008 at 3:16pm #

    Why don’t you stop typing on THE internet and do SOMETHING POWERWFUL!!!

    let’s come together, Stop these banks from getting such Bonus money
    Have all Account Executives, loan offiers, bankers an brokers get paid regular wages like us
    $9.00 AN hour NO BONUS MONEY GIVEN TO THE BANKS OR TOP ‘ BIG BOYS’ Stop that nonsense at once, Come together as a Nation before it’s to late.

    Stop lending to people who HAVE no money nor Income
    Stop Lending to Illegals
    Stop Allowing Illegals to live here
    Stop the Bankers from getting RICH
    Stop the banks form getting there BONUS Money
    Stop the banks from getting high wages
    STOP Posting On the Internet and LET’S COME TOGETHER
    Let’s not allow this world to go under a Bridge………….
    Now all the Older folks are passing or passed away its the younger generation that will have to suffer and have too Pay there dues for this crisis

    Let’s STOP Home Foreclsures lets STOP Bank REPOS
    lets stop CAR lending
    Lets stop these CAR PRICES (30 THOUSAND DOLLARS PLUS?) are you kidding me?

    Lets hire more Americans and get American Products, AN software
    Stop depending on china, etc……….start to get FACTORY jobs……….
    Start lowering prices ON HOMES
    Homes should NOT be worth 300k



  10. Guiseppe said on November 30th, 2008 at 1:41am #

    NONE: go down to the Filippi’s in Little Italy an’ have a pizza. You’ll feel betta.

  11. Hue Longer said on November 30th, 2008 at 6:22am #


    Can I join your club if I don’t think your xenophobic concerns relate much to the rest of what you say? It’s like being recruited by the Ron Paul Revolution…I’m saying, “yeah yeah yeah” at the Bar-b-q and then after the whiskey is passed around it’s time to hunt Mexicans

  12. Doug Page said on November 30th, 2008 at 6:48am #

    I appreciate everybody’s interest and comments about my article.
    I regret my mixing up Billions and Trillions. I meant $7.3 Trillion every place that I mistakenly wrote $7.3 Billion.
    There could be a further benefit in letting the Wall Street investment banks and insurance companies go into bankruptcy. It might weaken Wall Street’s corrupting influence on our elected officials.
    Retired physics Professor Manuel Garcia has written on these pages of the MICC, the Military Industrial Congressional Complex, and I see Wall Street simply as the banker of and profit taker from the Military. As Garcia suggests, it is the function of Congress to fund the Military, and the function of the Military is to fund the re-election of members of the House and Senate.

  13. Ramsefall said on November 30th, 2008 at 8:18am #


    reliance on literature as the epitome of our social voice, such as Steinbeck and Ehrenreich’s works, effectively supports your point and disqualifies the ludicrous perspective put forth by Romer. With appointees such as her who apparently live in a fantasy world drawn up by Disney, the practical solutions needed to overcome such a dysfunctional system like capitalism will lay in dormancy.

    “Cancer of its metabolism” is an accurate metaphor which descriptively defines the problem, colorful use, again effective. The system is no longer able to process the enormous inputs of burdening debt, revolving credit, fluctuating interest rates on credit and job outsourcing while the corporations maintain their profit margin. As Chomsky identified years ago, “profit over people” results in an ambiguous product derived from an imbalanced equation. There is no “profit for capitalists in meeting our needs”, as you propose, but neither can ethics be honored when profit is at stake. Ethics is a completely disregarded variable in the profit equation, and as such capitalism is ultimately unsustainable, along with inhumane, cruel and violent.

    The multi-trillion dollar giveaway to the top 5% of controlling interests is a crime, period. I myself can’t believe that riots haven’t broken out around the country, or that people aren’t organizing and protesting by the hundreds of thousands at least, in order to protest the theft of their money, the people’s money. Is it complacency preventing this protest? Wishful thinking? Unwarranted trust in the deceptive magicians who have organized this bailout? Since I don’t pay taxes as an expat, I avoid getting too worked up over it, but there are plenty of honest tax payers out there who should be irate and subsequently voicing their dissatisfaction with such unacceptable measures that will only benefit the controlling interests once again. Based on such tyrannical positions, it should be obvious that the people don’t matter and aren’t worth a piss in the eyes of these economic engineers. When will the revolution begin?

    There are plenty of people who are willing and anxious to work, but they’ll have to begin outsourcing themselves to El Salvador, Indonesia, China and Taiwan if they really want to work, since places like those is to where so many businesses have fled since Reagan began promoting with such vigor the concept of free trade, privatization and trickle down economics. They’ve worked diligently and patiently at achieving this level of instability.

    While all this recent activity and absurdity seems sick, irrational and unjust, everyone needs to keep in mind that the people don’t matter, we are customers, subjects to exploit, nothing more. Profit is their priority, at any cost; social or environmental. And now their precious machine called capitalism is breaking down, profits are becoming harder to reap as less jobs and money are available. The boom years have come and gone baby, this is simply the transition phase to complete failure of the system, which is imperative if we are to substitute the dysfunctional profit-oriented system of capitalism with another system that is sustainable and serving to the needs of the majority and the environment. The timing is quite punctual, and as the failures compound, awareness will continue to expand and perhaps eventually we can completely discard this repulsive money-based capitalist economy for something that benefits the majority.

    Great article, really stimulates critical thinking.

    Best to you.

  14. Ramsefall said on November 30th, 2008 at 8:23am #


    I’ve got a suggestion for you: why don’t YOU stop typing on the Internet? Is somebody forcing you to come here, read the posts and respond? I doubt it, go do something powerful.

    As a full-blooded Italian who likely comes from immigrants, that’s a pretty harsh stance you have toward immigrants — legal or illegal.

    True, we need to come together and collaborate, but doing exactly what you condemn others for doing is completely hypocritical, although I’m sure you already realized that.

    Best to all.

  15. Neal said on November 30th, 2008 at 8:52am #

    I don’t have the knowledge of the system to even begin to propose a solution. It’s obvious, however that most of us have lived our lives in the “American Dream” and we still don’t want to give it up. When I try to discuss this situation with otherwise intelligent and level headed people they’ll do anything to get me to stop, they don’t want to know, they just want it to go away. We need to help people to understand that a dream is just that, a dream. We need to keep putting the truth out there until enough people wake up. My hope is that you can’t do this to an awake, aware country.

  16. Jadventur said on November 30th, 2008 at 9:16am #

    No sweat on the Billions and Trillions………”Throw me a bone here people, I’ve been frozen for 50 years” (with pinky finger hoisted next to your mouth).

    -Dr Evil…Austin Powers

  17. Scott Baker said on November 30th, 2008 at 10:10am #

    Romer is half right: we do not have to have these periodic booms and busts that have gone on under our present form of capitalism. However, she fails to address the root cause. This has been know for over a hundred years and was first described in full by Henry George in his best-selling tome, “Progress and Poverty.” The solution, in brief, is to tax only the finite, natural resources such as land (which is what the current speculators have used to cause the current crisis, at the core), air, water, commodities etc. We all own the land (using “land” in the classic political economy sense). However, we do not all own the fruits of labor, which are wages and capital. THOSE should not be taxed – AT ALL. This would provide the best of both worlds. It would end the ceaseless speculative bubbles that occur when people are unfairly given ownership over that which they did nothing to create – the land – while allowing them to prosper from their labor in the form of wages and hard capital (not that funny stuff they move around on spreadsheets on Wall Street, but things like factories, tractors, cars etc.) It would also decrease use of precious and finite resources and eliminate gross economic inequity – though you could still get rich by building something the world needs, just not by sitting on land while the community around you actually creates added value and you do nothing.

    See “The Great Crash of 2008,” by modern Georgist philosophers like Mason Gaffney for an explanation of why these busts happen every 18 years over the last 800:

  18. marc weiner said on November 30th, 2008 at 2:01pm #

    unfortunately the give away to the large financial institutions is going to continue . so the important questions and answers are what strategies can a family with moderate savings employ to optimize their capital. as these massive giveaways and deficits take place certain assets will have tremendous price changes. saving the world is beyond my realistic capabilities. any suggestions?

  19. Peter Slavin said on November 30th, 2008 at 2:19pm #

    After reading Mr. Page’s enlightening yet pointed article the first time, I thought I should best reread it a second time and make notes of many of his key points to help me gather my thoughts to have a more thoughtful respsonse instead of just shooting from the hip.

    First off, a few disclaimers from the beginning. I am a caucasian male of Irish and English decent born and raised in Stamford, CT in Fairfield county, a relatively large and economically diverse city (2006 pop. est. 124,000) in CT and suburb of NYC, from middle class parents. I have been a registered Democrat my whole adult life, despite being married for 22 years to a staunch Republican, my beautiful and industrious Romanian immigrant wife, but proudly admit that I have always voted for the candidates I believed in and felt best up to the challenge and needs at the time and on many occasions, as demonstrated time and time again by crossing established party lines in local, state and national elections. I also consider myself a loyal and hard working financial advisor in the recently much aligned and beaten up financial services industry, working for the same well respected insurance company for the past nearly 30 years, serving the needs of my hundreds of diverse clients including both individuals, as well as, many small and medium size business owners over the years, spreadout among many industries and companies and in many different income levels and economic and ethnic backgrounds, perhaps my own little microcosm of America.

    Lastly, in terms of disclosures, I have been a proud and public supporter of President Elect Obama for the past 22 months believing all along that he was the right person at the right time for the United States of America and for that matter, to help us fight and lead us out of our global problems from the ever present terrorism acts and threats to our global economy and dependency on one and other for trade, as well as, helping the U.S. develop a more mutual respect and decency attitude around the globe vs. our prior “we know what’s right attitude for everyone else”. It’s obvious by now that we haven’t done such a great job at home regarding our own economy and people.

    My major point in all this is I believe we have to better learn to look at both sides of the coin at all times and allowing Wall Street to go bankrupt will just make our problems at home and around the globe more severe and would in all likelihood, lead us right into a Great Depression II, just like allowing the auto industry to go bankrupt is a similar sin and wrongdoing. There are far too many jobs and industries that are interconnected and tied to Wall Street, which is also tied to Main Street, since the money does trickle thru the economy in so many ways such as housing, real estate, mortgages, banking, the trades tied to construction and housing, insurance, investment firms and other financial service providers, as well as, countless other industries.

    In a similar fashion, our automobile industry, while it is hurting like never before, is tied to an additional estimate of 2.5 million jobs with related providers of service, parts, etc. and has been the backbone of the American manufacturing industry for the past approximately 100 years (I just learned November marks the 100th anniversary of the Ford Model T). The unmeasurable loss of pride, the mental anguish and pain that comes with loosing one’s job, the untold psychological damage from huge layoffs from large scale bankruptcies on Wall Street or Main Street from the auto industry are too damaging to calculate and are clearly avoidable if Government does what it needs to and should do at this time.

    I think it was a wake up call for me regarding the auto industry, when several weeks ago, while driving on a busy local road to my local Y for a workout, in an instant that I took my eyes off the road, I rear ended another vehicle, so much so, that I feared I had potentially severely injured the passengers in the front seat of the vehicle I rammed from the rear. In the middle of this global financial crisis, thoughts immediately came to mind how could I have acted so irresponsibly and potentially injured two innocent individuals, not to mention the thousands of dollars of damage that I estimated I had caused, insurance deductible worries, etc. Perhaps in a message sent from the Almighty above, I immediately learned the two individuals, thankfully, were not injured and were fine, not even upset. Their auto, if not obvious by now, was a good old Ford van and my very reliable GM Buick Rendevous both were spotless and undamaged. The bumpers on both vehicles were so strong and resilient that there was absolutely no damage visible to the three sets of eyes that looked closely for several minutes. I can only imagine the damage had we been driving any number of economcial or expensive foreign cars.

    About the same time I spent several hours on one of the Big Three’s websites resarching the company and marveled to make my own judgments about quality, their stock price, their survivability, etc. The technological advances of their product line and the vehicles I chose to explore further were amazing, not to mention the user friendliness of their website. I also viewed a CNBC special on GM at 3 a.m. one recent morning when I, like millions of Americans, layed awake and restless, in the middle of this crisis, worrying about my clients, our finances and our son’s future, who is about to hopefully graduate this coming spring from college. When I quickly realized that 1 of every 8 car buyers in China were buying GM, as well as, similar sales successes in other Asian countries, I said that’s it, enough is enough, similar to the old classic 1976 movie, “Network”, something like, “I’m as mad as hell and I’m not gonna take it anymore!” .

    Point is, there is quality today in the Big Three and many Americans are unaware or possibly just disgusted having moved away from Detroit vehicles, sometime in the past 2 decades, after like me for a number of years believing FORD really meant “fix or repair daily” or any number of other acronyms. I honestly believe this is far from the truth today. Quality is back and we cannot afford the pain and economic loss of millions of jobs tied to the auto industry in America. I realize the unions at one time played an important role in American industry, but I like many Americans today don’t think we need or want unions today, especially at the price of being uncompetitive in the extremely competitive auto industry market today. For that matter, show me any industry today that does not have healthy competition or there are excessive salaries throughout, (how about the hedge fund industry overall and professional athletics for that matter) and I’ll show you a failing industry or one currently under great stress at the moment. You know greed is in almost every industry today and far too rampant in our society. When people put themselves first in any industry or business, there is more harm done to the “little guy”, which is the ultimate customer and on occasion, the employees. If the customer doesn’t come first in any business, if the employees don’t come next and if the business entity doesn’t come last, there are likely problems galore or well camouflaged and hidden too long before something errupts. Eveyone needs to make a buck, but no one party should be on the short end of the stick all the time.

    The auto industry or better yet, their executives have too suffered from the fat catism or capitalism today that Mr. Page has pointed out as well as, Wall Street and many other industries. No better example recently than the much talked about AIG luxury trips after the Government bailout, Wall Street bonuses this year that Goldman Sachs and others Wall Street firms nearly paid themselves, or as recent as two weeks ago, when the Big Three top execs showed up after being shuttled from Detroit in their corporate jets with their palms up and hands extended and with no business plan to boot.

    For sure, I agree with Mr. Page on many things, including the fact there are an abundance of Americans, as well as, citizens of the world, that work hard every day and/or are willing and able to work hard today who seek employment.

    What I believe is missing in all this mess is a few important principles and some good old fashioned values that need to embodied in every business today and hung on a real or imaginary neck chain around every corporate executive today…..How about a sense of doing what is right and fair from now on. Earning it the old fashioned way thru hard work and fair play. How about recommending what you would recommend if it was your mother or father or family. How about the old saying of taking care of the masses and less fortunate in society first. What ever happened to the checks and balances in everything we do? I guess it is not sheek or doesn’t always impress Wall Street or public company analysts or the news media. Shouldn’t some informed outsiders sit on corporate boards today to voice the dissenting opinions? Makes alot of sense to me that President-elect Obama announced last week that his new Economic Advisory team will include folks outside Washington in business and industry, active and retired, that will have a say in economic policy making and be independent and non-partisan. Shouldn’t all boards have this type of representation?

    Although, there are many points that I agree wholeheartedly with Mr. Page, regarding the somewhat diverse and extreme differences and objectives at times between the top 1% of wage earners many of which include the Wall Street crowd, as well as, other affluent citizens, who are most frequently business owners, otherwise known as capitalists in only his somewhat derogatory terms that he refers to and the 95% of the population that make up the middle, lower and poverty income classses, I don’t believe that condeming everyone on Wall Street and allowing investment banks and bankers to be cast aside like unwanted terrorists is the right course of action either.

    Nor do I believe that Wall Street should not forced to pay some price for its actions. The recent Government loan of an additional $20 billion to Citigroup, seems to have helped Citigroup for the moment, their remaining employees and to somehwhat help stabilize the roller coaster stock market of the past few months.

    Remember though, Government makes the rules and laws or in some cases has overlooked the needed the laws to inforce the needed regulation that has been missing. Also, there are plenty of Americans that have purchased homes with no down payments, when perhaps they should have rented for a while longer and saved up a down payment, there are plenty of Americans that bought gas guzzling trucks and sport utilility vehicles, financed new autos with little or no money down, borrowed on the credit cards to the max, increased their home equity lines of credit each time that something they wanted, but didnot necessarily need, went on sale, etc. , etc..

    So, I think many of us are at fault to some degree and many of us have acted like capitalists by coming along for the ride. Point is we are in this together and together we will rise again, hopefully, sooner than later.

  20. Hue Longer said on December 1st, 2008 at 1:32am #

    Hello Doug,

    Thanks for emailing me.
    My comment was not directed at you but to “None”
    Thanks for your polite question

    (I had to post here because your mail blocked me)


  21. jackinthewoods said on December 1st, 2008 at 9:02pm #

    A fine article. makes me want to clarify my own thinking even more. One big question is: How tightly is Wall Street interconnected to Main Street? Could we jettison Wall Street with minimal damage to Main Street?
    One problem with this is it seems (to me) it all is tied into the Stock Market, home of pension funds and mutual funds which do represent real people. Of course, many of the sinking, functionally bankrupt stocks are quite bankrupt on their own hack, not only Gen Motors but also Genral Electric, 2nd biggest company in the country.
    Two problem is that the Principals have all been stuffing their Bahamian banks with their own personal lucre and they float away on golden or at least silver parachutes. The beauty of corporate law: Citigoup may sink but it will not adversely affect Robt Rubin’s fortune.

    Which leads to the second question: Where once the Investment Banks were the daring (ie stupid and greedy) brothers of the staid Banking Cartel, they have now been enfolded into the Cartel to spare them the shame and emotional hurt of bankruptcy. Are they not in reality a private cartel– including the Fed itself– with actual control over the monetary system? Are not the bankers and owners of these institutions the primary Creditor Class in the country, the backbone of the 1% financial elite?

    third, easy credit, lending at super-low interest rates encouraged greedy to people to take big risks (with other peoples money. And got us into this mess.
    Now the Fed by absorbing the bad debts, insuring against losses is doing more of the same, putting the debt onus on the US taxpayer.
    “Bernanke is lowering interest rates to avoid deflation, which encourages savers to seek higher yield by investing in riskier paper. Compounding the problem, the Feds insure all of it, removing any incentive for investors and investment managers to carefully consider risks.” And how much of our savings are insured by the FDIC, with assets of $40 Billion? Oh not to worry! Private taxpayer losses will be covered by Public taxpayer tax-dollars.

    While I think Mr Page’s analysis is on the money (haha), he ought to mention the next, primary level– the private Federal Reserve in charge of creating money instead of the US government.

  22. Beverly said on December 2nd, 2008 at 8:19pm #

    “Obama now seems to be a servant of Wall Street.” “However most of us continue to give Obama the benefit of the doubt.” “We hope and we pray that he . . . will ultimately do what is right and possible . . .” “All we can do right now is to raise questions:”

    Now SEEMS to be Wall Street’s lackey? A look at the members of Team Obama throughout the campaign was enough to convince any non-kool aid drinker that the man was bought and paid for by Wall Street long ago.

    Feel free to hope and pray but don’t waste too much time expecting a miracle. The warning signs about what to expect from President Obama – admiration for Reagan’s foreign policy and clean up of 60s/70s “excesses;’ stump speeches long on shallowness, short on specifics; advisory team full of neolibs and free trade cheerleaders – have been abundant for the past 2 years.

    As for raising questions, such should have been done long ago.

    “ . . . neither Professor Romer nor President Obama can devise remedies . . . for the great crisis of our capitalism unless they know the real causes of the crisis.”

    Pontificators and politicians like Romer and Obama know full well the real causes of the crisis. However, to address the root problems would require changes that the corporate power structure would never stand for so its lackeys in the media and political arena avoid all talk of the real issues.

    “The real problem is people do not earn enough to . . . to buy what capitalism produces.”

    Never has a more accurate statement been written. This is the main reason for our (and the world’s economic woes). What good are low interest rates and easy credit if one has no money to buy and make payments in the first place? Further, it’s not all about buying homes and cars on credit. People lack funds to buy food, clothing, services, and other basic staples – items that don’t generally require a loan.

    Notice how the lag of wages behind the cost of living, along with outsourcing of jobs, are rarely mentioned when pundits and politicians prattle about the economy. Ignorance of these issues? No. Just ignoring the real causes of economic malaise like their corporate benefactors instructed them to do.

  23. Max Shields said on December 2nd, 2008 at 9:11pm #


    I love your posts and think this one is basically no exception, except one point (and perhaps you’ll agree even though you’ve stressed it’s importance): “What good are low interest rates and easy credit if one has no money to buy and make payments in the first place?” Much of the “stuff” isn’t worth buying and the problem is not just that people don’t have money to buy it, most of this stuff is worthless over-marketed garbage that’s destroying the planet while pivotal to the predatory capitalistic system that produces it ad nauseum.

    I do however think your next sentence about necessities is right on the mark!

    Outstanding insights about Obama!

  24. Deadbeat said on December 3rd, 2008 at 12:19am #

    There are some inaccuracies and faulty assumptions being made by both Beverly and Max about the cost of good and services and where people are spending their money. There is an excellent presentation by a href=””>Elizabeth Warren on You Tube where she show that prices of many of the “staples” has actually gone down. Also prices of the “stuff” that Max assumes that people are purchasing has also gone down in real terms.

    Where prices have gone up and hit the hardest has are housing, health care, child care and education. These are items that are necessities and whereby the burden has been shifted onto families with children. What has happened is that the burden of raising the next generation has been PRIVATIZED. For example as Ms. Warren points out to raise a child into the middle class say two generation ago it was entirely “socialized”. K through 12 education that garnered a high school diploma was entirely financed through the public sector.

    Today in order to achieve “middle class” status you now need pre-school and college. These pre-school and college has remained in the private sector and has force students and family to take on more debt.

    We all know what has happened to housing and health care — two very important necessities.

    I think it is important for the Left NOT to trivialize the working class as both Beverly and Max did with their incorrect assumption about their behavior. Such faulty assumptions borders on elitism and will only alienate the very group that the Left must attract and build solidarity.

  25. Deadbeat said on December 3rd, 2008 at 12:23am #

    Here the correct link

    Elizabeth Warren on You Tube

  26. Ramsefall said on December 3rd, 2008 at 5:19am #


    great post, they certainly didn’t put him on the the trendy lay-away plan, he has been bought and paid for in full, now it’s time to serve his masters.

    Best to you.

  27. Ramsefall said on December 3rd, 2008 at 5:46am #


    as an English teacher who works with young Colombian polyglots, I’d have no option but to fail their text comprehension skills if they responded to Beverly and Max’s posts as you’ve done by somehow misinterpreting their plainly written contributions.

    Beverly’s assertion is that wages haven’t kept up with rising cost of living; bloated insurance premiums, utility expenses, food, clothing, etc. Wages have stagnated comparatively to what they were 10-15 years ago, costs haven’t. I don’t see the inaccuracy in that.

    Max’s point is that most of the stuff produced is just crap that isn’t worth buying anyway, wasted production at the expense of the environment, worthless, over-marketed garbage as he puts it. He is precise. How much crap can one country produce; plastic toys, gadgets, packaging, disposable goods for a disposable society. That’s not a faulty assumption, it’s called hitting the nail on the head.

    Neither of their comments trivializes the working class, but your comment blatantly misinterprets their message, you’ve missed the beat, Deadbeat.

    I return Stateside twice a year for the past 3+ years, and each time I do, I notice that costs are definitely rising; food, clothing, fuel (although I’m aware it took a recent plunge that hasn’t corresponded with the 70% drop per barrel), natural gas for home heating, services, etc. Considering that, while having not yet seen Ms. Warren’s video, I’d say she’s wrong. But then again, if you’ve misinterpreted what Beverly and Max were saying, maybe you’ve misinterpreted what Elizabeth said.

    Is English your first language?

    Best to you.

  28. Ramsefall said on December 3rd, 2008 at 3:47pm #


    the link to Warren’s seminar is quite informative, I appreciate it. Her presentation was given on March 2007, and since then economic conditions have deteriorated, but it’s relevant nonetheless. I am able to see your argument as more transparent now, yet continue to believe you somewhat misinterpreted their thread. Regardless, shame on me.

    After cross referencing her info with what you responded to Bev and Max, not considering the enormous difference between housing, insurance, education, automobile and child care costs versus the cost of staples; food, clothing, appliances, flexible purchasing, is the problem. Categorically they aren’t relatively comparable, fixed vs flexible.

    Bev is pointing out that wages have lagged, which they have, especially for men at the tune of $800/year in 2003 when compared to 1971. Not just lagged but dropped, according to Warren’s data. Couple that with an overall rising cost of living in effect from the Big 5 fixed expenses. Spending 76% more on housing, 74% more on health insurance (for a healthy family), 52% more on autos, and 100% more for child care, than just one generation ago is astronomical, it’s no wonder the country is broke.

    Wages have not kept up with the climb of the Fixed 5, as families now allocate 75% of their income with mom and dad both working while 30 years ago they spent 50% of their income with mom at home. As economically oriented as this is, it’s reflected in social behavior as you point out. But by looking at the spread of suburbia around the nation, families spending an excessive amount for houses they really don’t need does seem very frivolous, as does leasing posh autos. Consumer trends go through a transition along with society, and when people start biting off more than they can chew, strapping themselves financially to appease their insatiable appetite for comfort and image, we see the data as presented by Elizabeth.

    I’ll check out your link first next time.

    Best to you.

  29. Deadbeat said on December 3rd, 2008 at 9:48pm #

    Ramsefall (Doug Page article)

    The point of my critique of Beverly and Max and response it that they response was not based on analysis but based on assumptions. The right makes the same kind of fallacies in their rhetoric. I would hope that the Left would not engage in such similar behavior. The assumption Beverly made is that staples have become out of reached for most workers and Max assumed that American are making frivioulus purchases. Warren analysis backed up by research and data shows the assumption made by Beverly and Max to be fallacious.

    I agree with your response but has some difficulty with the following…
    But by looking at the spread of suburbia around the nation, families spending an excessive amount for houses they really don’t need does seem very frivolous, as does leasing posh autos. Consumer trends go through a transition along with society, and when people start biting off more than they can chew, strapping themselves financially to appease their insatiable appetite for comfort and image, we see the data as presented by Elizabeth.

    I don’t think the American people can be faulted for wanting to own a home. Shelter and security are necessities. In addition finding a good school for children is dependent upon the neighborhood which inflate demand and thus housing prices.

    IMO RENT SHOULD BE A TAX DEDUCTION. If the Left took up this concrete issue imagine how many workers it can get to join the ranks.

    Urban/Suburban planning and raising home prices forces many families to have to commute great distances and therefore need two cars which has skyrocketed in prices.

    Divorce, alimony and child support also creates huge financial stress has the government has shifted the burden of the Big 5 fixed purchases onto parents.

    I would have a lot more empathy towards workers who have been sold a bill of goods. In fact I would advocate Deadbeatism since the system put all of these burdens into workers. Workers need to become more conscience and stop blaming each other and start blaming the system.

    Overall I think the Left needs to better address the concrete issues articulated by Ms. Warren as a matter of course to help increase it ranks.

  30. Ramsefall said on December 4th, 2008 at 5:48am #


    once again, Ms. Warren’s info is pertinent, I’m glad you’ve shared it. I don’t blame anyone for wanting a home, but I have met hundreds of customers when I had my own enterprise who were completely strapped from purchasing a house that was really over their heads, economic metaphor, mortgage sacrifice took an entire monthly salary of one worker. That’s not practical, but I think that the US has been subsided by impracticality for a long time. It’s for that exact reason that staples are out of reach as Bev pointed out. Sacrifices have to be made to meet that mortgage, the extra car for living so far from work, credit card debt from that new plasma, Johnny’s braces and Sally’s dance classes, and so forth. You know what I’m saying. Nobody forces anybody to live beyond their means, and that therein lies a big part of the problem as well. And based on insensible behavior such as this, living well beyond one’s means, we could indeed say that the behavior is most frivolous.

    Obviously there are other factors and the system is truly sick and twisted; privatization isn’t helping a damn thing except making the elite wealthier, all part of the grand scheme.

    Taxes is a discussion left on its own.

    Thanks for qualifying your stance.

    Best to you.

  31. Max Shields said on December 4th, 2008 at 6:07am #


    My statement above was brief and was not meant as an in depth analysis of anything. It was a straightforward statement.

    If you think that much of the marketed goods shipped world-over is healthy, well, that’s your opinion. Behind what I said is an endless supply of data and analysis regarding American consumption and the economic system which is premised on it. I don’t think I need to lay all that out every time I post.

    Singling out Beverly and me for what is done by all the posters here is an indication of a prejudice rather than clear headed analysis.

    Ramsefall thanks for recognizing this from the start.


  32. Ramsefall said on December 4th, 2008 at 6:38am #


    I prefer to avoid interfering with others’ posts, but I didn’t see Deadbeat’s argument as valid based on what both you and Bev were saying. Ms. Warren’s data demonstrates that families are spending less on staples, not that the cost of those staples have risen, just that people are statistically spending less. Why? Primarily because they are strapped with mortgages that are bigger than they can handle, wanting to maintain a certain lifestyle that is impractical. Wages have been insufficient to keep up with major expenses such as this which is why less staples are being consumed. The math is not that complex, mortgage payments have to be made before buying excess food, clothes, appliances, etc. It’s a no brainer.

    As you stated, our capitalist society produces way more shit than anyone needs or wants, all at the expense of further contaminating the planet. Have you seen the article examining the more than Texas-sized swath of accumulated garbage in the Pacific, most of it plastic? It’s disgusting. Meanwhile rivers, lakes, aquifers, soils and the atmosphere are being poisoned by the toxic by-products in order to continue producing all this crap that people don’t really need anyway. It’s a counter-productive waste, all for the production of worthless crap that keeps capitalism on a roll. There is no sense in this type of behavior, it is utterly frivolous and empty.

    Best to you.

  33. Ramsefall said on December 4th, 2008 at 8:38am #


    review Warren’s video, the prices haven’t gone down as you stated, it’s just that people are spending less on those categories because they’re strapped with heavier financial burden in the fixed necessity areas. I think you’ll find that that is where the faultiness of your argument was.

    Best to you.

  34. Norman Ball said on January 7th, 2009 at 1:23am #

    I read this essay a few weeks ago and have been pondering the overproduction argument ever since, frankly surprising myself with the determinative logic of what is essentially a Marxist argument. Here’s my thinking to date…

    Prozac IndigNation

    What Engels failed to understand was advanced capitalism’s deft wielding of complexity, the cloaking of risk, the originate-and-distribute ‘hot potato’ model, securitization as camouflage, the democratization of credit, the false hope of counter-partied and concentration risk, etc. Heck, who beyond a select few people understood it even nine months ago? Even now, the rationale of post-bubble fervor is hard to reconstruct. My guess is Engels would resist the anomalous language of ‘bubbles’ and argue that the so-called anomaly is simply the crisis-to-crisis nature of the capitalist system. He might also marvel at the financial capitalist’s ability to ‘feed at the socialist trough’ whenever it suits him. I know I
    do. I suppose greed subscribes to the ideology of expedience. Or perhaps capitalism is institutionalized greed and not an ideology at all.

    Anyway as the elite stole from the top via stock options, ridiculous salaries, acquiescent boardrooms etc., they simultaneously (and ingeniously) created credit models that augmented stagnant wages and sustained the workers’ consumption patterns against the Marxist cul de sac of overproduction. In short, cheap credit caused the worker to believe he was still keeping ahead and enjoying the fruits of his production. For a time it masked his real wage declines.

    The Freddie/Fannie paper factory also benefited from an implied govermental (read: socialist) backstop which, as it turned out, was ultimately invoked; this aggressive credit creation relied upon the gumption of relatively less sophistocated and emergent capitalist markets (many prior Marxist-Leninist states ironically) that, for a variety of currency and developmental reasons, were happy to remain production-bound and vendor-oriented.

    Like any Ponzi scheme, this dog-and-pony trick can only succeeed once. No one will be fooled again. Meanwhile the American worker is being unceremoniously dumped back into a classic Marxist overproduction trap as credit sources evaporate, home equity disappears, manufacturing jobs vanish and inflation looms. The new cars and houses are stacking up. Absent credit, no one can afford them. Which is to say, no one can afford them. When the deleveraging process completes itself, we will be back to ‘merely’ wages –and horrendous wage disparities– once again i.e. a more classic Marxist playing field.

    The question to me is, when will the American pot finally boil over into meaningful social unrest? Or are Americans so naturally docile (and/or medicated) that outrage is not an available response? Is Prozac Huxley’s soma? If so, they sure as hell better find a way to keep the pills rolling.

  35. bozh said on January 7th, 2009 at 4:01am #

    i don’t think amers are exceptional or a quirk of nature. they are just more mistaught than any other people.
    due to the facts that media, entertainment (infantainment as some say), all schooling is firmly in hands od the deceivers; most of them being plutocratic.
    amers are just like al other peoples. there are so many robbers, murderers, deceivers, wife beaters, liars, cheaters, et all in all nations. thnx

  36. Doug Page said on January 7th, 2009 at 5:47am #

    Dear Mr. Ball: Thank you for your thoughtful comments and congratulations on your own insights. I am frankly surprised that of all of the readers of Dissident Voice, there are so few comments that either creatively augment the points, or rebut them. I believe one reason is that we have all been brainwashed for several decades and that a taboo has been imposed on us. I have never read Marx although I had a good friend who was and is a Marxist, Professor Doug Dowd of Cornell and now age 90 and semi retired in Bologna, Italy. Many of us seem to be able to spot “Marxism” in an argument or article, then pigeon hole it, and then reject it. I think that truth can be obtained by one’s own analysis and experience, truths that were known both before and after Marx. For example in a novel “The Haunted Abbot” about Celtic Christianity set in 600 A.D. I ran across this phrase: “…when gold argues the cause, eloquence is impotent.” Then there is California Assembly Speaker Jesse Unruh’s famous statement: “Money is the mother’s milk of politics.” More recently there is the political exhortation: “Follow the Money.” Our civilization may fall due to our failure to ingest these insights whether Marx also discovered them or not. Doug Page

  37. PD said on February 9th, 2009 at 3:01pm #


    ONE THING CAN BE DONE…pass off your feeling of impotence, and begin organizing mass boycotts. Corporate America only understands money. Take it from them by choice, and they will crumble.

    Unless, of course, American people are comfortable with their role as “uninformed cattle?”