The Money Party at Work

Huge majorities in both houses of Congress voted for legislation to allow the biggest bank heist of all time. But this time, it was the banks pulling the heist.

Our financial system looks ruined beyond repair. The credit default swaps crisis is 40 or so times bigger than the real estate meltdown over subprime derivatives. The top 25 banks in the United States are loaded down with $13 trillion in credit default swaps and the deal is coming unraveled. If we accept the highly dubious assumption that the debt from the financial meltdown needs to be repaid by us, were looking at $43,000 a citizen right now. And we’re just starting.

It didn’t get that way by accident. There was special legislation that enabled the current crisis.

This was classic Money Party strategy and tactics.

The strategic goal was to turn Wall Street into a big casino for the “in crowd” of major investors, funds, and institutions. No rules and no regulations: “let the market take care of it” was the philosophy.

The tactics were easy. First you set up a scholarly group called the Law and Economics movement to give your scheme legitimacy. Then you give money and other favors to members of Congress.

At the right moment, you call in your congressional markers to let the banks start doing what they did to spark the Great Depression. Walk into the Wall Street casino loaded with cash and spend like they’re on coke. Your corny academic group has a couple of judges who decide a case that gives legal grace to the scheme. The casino is legit says the court. You then go for the whole nine yards by bringing back the long outlawed derivatives, subprimes, credit default swaps, etc.

The corporate media either ignores your “long con” altogether or covers it on their back pages.

Done deal! It’s the perfect storm to create economic chaos allowing the most massive transfer of wealth since the Visigoths sacked Rome in 410 CE. It’s all about socialism for the rich and survival of the fittest for the rest of us.

But Congress and the Treasury Department will preserve the financial elite in perpetuity. Why? To begin with, they’d have to admit that they created the problem in the first place with their enabling legislation. Congress would also have to admit to absolutely zero oversight on this matter despite warnings.

Legislative, Judicial and Executive Branches — Acting in Unison Deliver the Goods

Three distinct events enabled the current economic chaos. The baseline requirement for the era of greed was satisfied in 1999 when Congress repealed key provisions of the Glass-Steagall act. That law was established during the first Great Depression. It tightly restricted the opportunities for reckless speculation by banks. They were barred from selling stocks and other speculative schemes. Title 1 of the Financial Services Modernization Act, 1999 says it all:

Facilitating affiliation among banks, securities firms and insurance companies

Commercial banks, brokerage firms, hedge funds, institutional investors, pension funds and insurance companies can freely invest in each others businesses as well as fully integrate their financial operations.

This was a bipartisan effort with the Senate version passing 90 to 8 and the House 362 to 57.

The once scorned derivatives had been the Holy Grail for “free” market radicals on Wall Street and elsewhere for years. They said that the restrictions on these products were unnecessary and stifled the free market (“free” for them). Even before Congress acted definitively in December 2000, the U.S. Court of Appeals for the 7th Circuit struck down the ability of the Securities and Exchange Commission (SEC) to rein in ruinous high risk financial schemes on Sept. 1, 1999.

Reagan appointees Richard Posner, then chief judge, and current chief judge Richard Easterbrook were key movers. They’re also heavily involved with the Law and Economics movement, a right wing, free market movement that opposes almost all regulation in Pavlovian fashion.

Credit default swaps and other derivatives had been illegal for decades. In 1981, specific rules were set up to tighten restrictions against these schemes. But all that changed on Dec. 21, 2000 when the lame duck Congress passed the “Commodity Futures Modernization Act of 2000′” making these products legal. The legislation also barred the gathering of information that would serve as early warning on the legalized gambling on credit worthiness. Regulators were helpless in looking out for the public. Here’s the title of the House version of the bill:

To reauthorize and amend the Commodity Exchange Act to promote legal certainty, enhance competition, and reduce systemic risk in markets for futures and over-the counter derivatives, and for other purposes.

This is the vital wording modifying the Securities Act of 1933 that undid the economy:

“Section 2A–Swap Agreements The Commission is prohibited from — promulgating, interpreting, or enforcing rules; or issuing orders of general applicability.” The Senate and House bills were combined in to H.R. 4577, an appropriations bill for the Departments of Labor, Health and Human Services, and Education signed by President Clinton. Someone had a perverse sense of humor.

In other words, Congress legalized what had been illegal for decades and it secured the 7th Circuit’s opening gambit of handcuffing the SEC in dealing with the new high risk financial products. Congress fixed the game so that the short staffed regulatory agencies couldn’t monitor the market even if they wanted that function.

Good luck trying to find the legislative debate on this momentous change. There was none. The enabling legislation for this disaster was passed by an overwhelming majority in the House of Representatives and by unanimous consent in the Senate.

It’s important to have a “Roll Call” for the sponsors of the “Commodity Futures Modernization Act of 2000.” They made it happen.

Expect More of the Same

The bailout and other efforts to save Wall Street firms and the large banks are essentially an effort to deal with the problems of derivatives and other market failures. Wall Street got the court decisions and legislation it wanted and then promptly proceeded to create today’s disaster.

They sold these risky products and now they have to pay off. But they don’t have the money even with the current bailouts. Where will they get it? The federal government was the only sucker left to tap and that bet came through to the tune of $4.6 trillion. There’s $4.6 trillion awaiting further requests from the Federal Reserve

The culprits are still in place at failing financial institutions.

Don’t hold your breath waiting for political action to fix the situation. Both parties were in on this mess. Huge majorities in both houses of Congress voted for key legislation to allow the biggest bank heist of all time. But his time, it was the banks pulling the heist.

That’s why the bankers have to stay in place. To remove them, would be telling, as William K. Black said recently:

But the other element of your question is we don’t want to change the bankers, because if we do, if we put honest people in, who didn’t cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

But it was all legal, wasn’t it?

Michael Collins writes for Scoop Independent News and a variety of other web publications on election fraud and other corruptions of the new millennium. He is one of few to report on the ongoing struggles of Susan Lindauer, an activist accused of being a foreign agent, who was the subject of a government request for forced psychiatric medication. This article may be reproduced in whole or in part with attribution of authorship, a link to this article, and acknowledgment of images. Read other articles by Michael, or visit Michael's website.

24 comments on this article so far ...

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  1. Don Hawkins said on April 16th, 2009 at 9:36am #

    Only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money! ~Cree Indian Proverb

  2. David said on April 16th, 2009 at 1:56pm #

    So, where does this leave us?

    Hasn’t this scheme been instigated by the same crowd that brought us the Dutch tulip bulb scandal in 1680, the South Seas bubble in 1720, the merchant-banker support of Napolean after the French Revolution, the Panama Canal fraud of the 1890s, the industrialists’ support of Hitler?

    It goes on and on.

    Do we march on their homes with torches and nooses in hand? What makes this act the end point in the corruption and greed? After all, the French did this in 1790 and the greedy little bastards were there the next day. Same in China. Same in Russia.

    Maybe this is just what we’re stuck with. Maybe this is the best that complex human societies can do.

  3. Deadbeat said on April 16th, 2009 at 3:29pm #

    Maybe this is just what we’re stuck with. Maybe this is the best that complex human societies can do.

    Maybe it is time to be optimistic rather than pessimistic. You can look back at mistakes and say that those mistakes will be repeated or you can LEARN from the mistakes of the past. It is clear that capitalism doesn’t work. Essentially history is TEACHING us. WE needed to go throught 60 years of Keynesian Liberalism to LEARN that it doesn’t work. If we didn’t it certainly would be offered as a solution. We NOW have history to show that if failed. Therefore the opportunity is ripe to try alternatives to Captialism.

  4. Suthiano said on April 16th, 2009 at 8:47pm #

    Marx was an astute critic. He was one of many. Some of his theory would be helpful in organizing a society.

    There is much much more required.

    localized economies, localized food production… a recognition that a locus has rays (paths to centre? spokes?) that can overlap and so that all loci are connected, and in fact (more to the point) the loci can change freely and dynamically.

    no more fiat money. a currency tied to natural resources; reserves is what exists now, every extraction of resource is a withdrawal, and deposits are very difficult, so best to just utilize the interest which will replenish itself naturally so long as we do not take more than we are supposed to, and do so in the correct manner.

    there are already many people around the world who farm in a holistic way (bio-dynamic).

    All of this requires a spiritual change in human beings, the true spiritual-sciences must return. These were ways of utilizing the material world in accordance which much deeper undulations. Crops were planted and harvested according to the stars and moon, the crops were rotated, and land was allowed to lay fallow, some plants were used as natural deterrence for pests, some plants were used to cure, some plants contained mysterious powers… all of this knowledge, this spiritual-science (very different from our cold, logic and numbers based science) was developed over 10s of thousands of years. It did not allow for so many terrible inventions created with brilliance but absolutely no foresight (atomic bomb, nuclear energy, pesticides, plastics, etc).

    We must not allow this fast fading ancient knowledge to be lost. Some peoples still have some of the oral traditions and practice old methods of living. we must learn from them…

    other knowledge remains, though slightly obscured, “the open secret”.

    We must not allow all of this knowledge to die (and with it the environments that the knowledge existed within)… or we are doomed.

    Look at the sickness of the food we consume on a daily basis. pigs slaughtered in a terrible manner recently described on this website. chickens mass harvested in tiny cages with no beaks and no way to even turn around…

    changes will come about… but many, many creations will be destroyed before then, and U.S. will be particularly hard hit…

    What goes on up is coming on down
    Goes around it comes around

  5. Albert said on April 16th, 2009 at 8:51pm #

    I read a question and answer here that nicely describes what is a bubble economy:

  6. Deadbeat said on April 16th, 2009 at 9:28pm #

    Marx was an astute critic. He was one of many. Some of his theory would be helpful in organizing a society. There is much much more required.

    Marx was an astute critic. He was one of many. Some of his theory would be helpful in organizing a society. There is much much more required.

    This is always the first red flag. What is required is the maintainence of the freedom won in order to protect the vision. How in the world are you going to protect your vision from COUNTER-REVOLUTION? What made Marx’s analysis so profound is that he didn’t wallow in utopia. He clearly understands POWER which is something that you and the many “localizers” or “anti-globalists” seem to want to ignore.

  7. Michael Collins said on April 16th, 2009 at 11:30pm #

    David, this is a valid and timely question: “Maybe this is just what we’re stuck with. Maybe this is the best that complex human societies can do.” If it is our nature to be doomed as a species to repeat our foolishness and damage again and again, then it’s in the genes. If we can point to some real change, then there’s some hope. However, the “rulers” do everything to convince us that there is no hope. Science evolves, political processes devolve. We’re at a great time, though, because many people have dropped a lot of the old slogans and blinders. They know that elections are fixed. They know that even if they’re not, politicians are easily bought. This is dangerous knowledge to the rulers since it strips their legitimacy and myth making powers. It’s going to be a profound 4-5 years.

    Suthiano, “changes will come about… but many, many creations will be destroyed before then, and U.S. will be particularly hard hit…” I terms of material standards this may well be true. In terms of control mechanisms, the elite has literally lost the franchise. Hardly anyone believes their nonsense. I spoke to someone who went to a Tea Bag event and spoke for 40 minutes on political corruption, the war based on lies, and the need for more equitable access to health care and other resources. The person didn’t say, ‘I’m a leftist’ just spoke the words of common good etc. They loved it, except for a very few who were silent rather than derisive. It’s instructive. Even the hard core, the last stand of the right wing of The Money Party, is populated by people easily swayed. What will they do without being able to write the storyline for their appropriation of wealth and privilege.

    Deadbeat, you make a strong point on the uselessness of any more suffering. The sales pitch from PTB is it will take years to unravel all of this. I’m sorry but it shouldn’t unless we honor the bad debt that Wall Street created. I have no intention of donig that and I don’t think anhyone who understands will honor it. Let them cancel their debt and moan about it while people comeup with alternatives that value people rather than profit (as false as those profits may be).

    Don Hawkins, thanks. Makes the point for any who miss is, clearly.

  8. mjosef said on April 17th, 2009 at 3:39am #

    Fine article, and good discussion, Michael. I do not agree with your statement about “hope,” though. The rulers do not try to take away “hope,” they force-feed it to us like we are geese being fattened for pate. It was Obama’s mantra, after all, and we need to have some realism about this. You can have protest and anger and typing vitriol at the lower levels, but the supersystem reinforces itself with law, academia, commerce, religion, advertising, military, the prison/fine industry, every social institution supporting each other. There is no way, no means, for any structural realignment in the next 4-5 years.
    Since we bomb-slaughtered civilians in a fascist world war to combat fascism, we have been in a lockstep of productive destruction that enriches the few at the expense of the natural world. This may sound like boilerplate agitprop, but we should be as equally open to pessimism as optimism. And in that spirit, I will still be looking for mass secular agitation.

  9. Max Shields said on April 17th, 2009 at 7:29am #

    Suthiano your comments about we need more than simply Marx’s critique.

    I find myself intrigued with some of the essays by Justin Raimondo at And his latest piece seems to hit the situtation deadon:

    I have posted similar comments here for some time now. The problem is scale as well as the preditory nature of what exists. But size is perhaps one of the least addressed in discussions about alternatives and the most important. Scale coupled with social structures which produces complementary economic and polity structures are essential for a meaningful just world.

    Now, there is a downside to everything. One is vigilance about minority protection. Majority rule democracy is problematic. The US constitution has made attempts to protect minorities. Today that is done, sometimes poorly, with oversight by larger entities: State, Feds over localities. The problem with size is that injustice creeps in big time and size does not seem effective at guaranteeing minority rights.

    But when we talk about capitalism, we are talking about what was left after the downfall of the communist regime in the Soviet Union. Like the USSR representation of Marxism, the US is seen as representing Capitalism (Adam Smith, et al). The truth is neither is the case.

    What both represent is massive implementation of a barely recognizable economic system. Size has trumped any true economics and has, itself, become the economics. So as Raimondo articulates, it is the sheer size of these nation-states which has taken over their raison d’etre. It is vital to understand this. The USA is not really capitalistic or socialistic; any more than WalMart represents Green or Free Enterprise; or Stalin represented socialism. The preditory nature of these large dinosaurs, like the US and China, comes more from size and mission (exceptionalism/Munroe Doctine/empire) than from the nature of Capitalism.

    This is not to say that Capitalism is the preferred economics. I agree with Suthiano that the “system” must emerge out of a number of considerations, size, creation of local real indigenous economies, a reframing of trade and global partnerships, relationships between workers, work and social structures.

    This is not about Marxism as an alternative. It is about the human species ability to create a sustainable adaptation to massive collapse. If Marx’s works has something to offer, fine; but simply reciting what he has to say as if it’s a simple application of a blueprint, I contend, would make a horrible situtation many times worse.

  10. Suthiano said on April 17th, 2009 at 10:27am #

    “This is not about Marxism as an alternative. It is about the human species ability to create a sustainable adaptation to massive collapse. If Marx’s works has something to offer, fine; but simply reciting what he has to say as if it’s a simple application of a blueprint, I contend, would make a horrible situtation many times worse.”

    Well said. I remember when I passed through a phase when a criticism of Marx triggered the response that the person doing the criticism was “ignorant”, or “a capitalist pig”… The phase lasted about 8 months, and I found it to be extremely limiting. I found that it runs contrary to human survival to have an ideology that has to be forced upon people. People like Deadbeat, who can only respond with anger and insults, turn people off of the peace movement, because their attitude is not one of peace, but rather of confrontation.

    “He clearly understands POWER which is something that you and the many “localizers” or “anti-globalists” seem to want to ignore.”

    Power? You’re lecturing about power? Have you ever read animal farm? Have you ever lived in a centralized economy? How about international communism under one government (of course subdivided to make it possible to function), you don’t see power being abused terribly in these situations?

    Or, what if “Marxism” (I guess that’s what we’re actually talking about), is only applied in one country. Haven’t we seen how that process is undermined, and how POWER is abused for the sake of defending the system?

    How are you going to ensure that everyone follows these practices… wouldn’t you need POWER to ENFORCE it? Of course, because not everyone wants to live in such a world.

    Again, in localized economy the boundaries break down between workers, businesses etc. As long as everyone feels that they have a say in what is going on, then people will be able to live in peace. There is no opportunity for the monopolization of power, because the entity is too small to accomplish as much… people would simply leave that locus if it began to fall into corruption, and the locus would collapse.

    I’m not talking about a Utopia… but Deadbeat does seem to think Marx has provided ‘the end of history’ in his writings. Just apply what he said to reality, and badabing badaboom, there you have it, a fair and functioning society… nothing more required than shifting power to the workers (who are so brain dead and obese that all they do is drive around and consume)…

    The point of my post was that you can give any one POWER and they will abuse it, or you can give any worker freedom and they can abuse it… what is required is a SHIFT in the way that we inhabit this planet… I called this a SPIRITUAL shift… inspire, spiro, respirare (to breathe), spiral, spirit…. The spiral is not the circuit. The circuit never changes, but the spiral, though moving in circles, also moves AWAY from the original point.

    Before this is dismissed as mumbo-jumbo, consider what I’m saying. We all know that human beings ‘grow’, or in some cases shrink, just as everything else with life…. What do we grow towards? communism? That system built on pure materialism with nothing of the spiritual developments required to live peacefully with other people… To not want to get ahead of your neighbour. To not want to fuck your neighbour’s wife as opposed to your own, because she is younger, has wider hips and bigger breasts…. how does Marxism get rid of THAT kind of jealousy, that kind of POWER play.

    Anyway, unlike deadbeat, who seems to think that if he was placed in POWER with all of Marx’s writings around him, he could rule a just world, I don’t want to rule the world and ‘fix things’. I would be happy living in a community that had taken back power of our day to day lives, that had access to fresh, organic produce that could be afforded by everyone and was grown locally. Where there was no usury, no predatory lending, and the people ran the bank.

    I understand that there are issues of how such a society could survive without a universal change in the same direction. Marx was correct in pinpointing economic crises as the time when these things can happen.

    My only hope is with the spiritual.. (not some bs christian or religious nonsense), the idea that human beings recognize how every breath is an interaction with the whole. Where our language becomes healthy and vivid again, shaking off old cliches and aphorisms thrown around way to often, without communicating anything. So it could be linked to ‘evolution’, if you choose to view it in that material way. We can evolve into creatures devoid of spirit, ants, that are extremely efficient and work as a functioning whole, ceding POWER to the genetically different Queen. There has been a force guiding human beings towards this sort of de-evolution… becoming a herd creature devoid of a higher existence.

    Yes, we are a decaying, falling into the sea, and screaming nonsense as it happens… we must stop the force behind the decay… and it is much more than Adam Smith’s “capitalism”… why do you think the European bankers supported Lenin and the revolution? Where did all the money come from to print the massive propaganda that appeared in Russia? Yes, it is much, much bigger than Adam Smith or Karl Marx.

  11. bozh said on April 17th, 2009 at 11:42am #

    i too wld say, beware of saviors. Such as marx, jesus, ghandi, god, angel, king, obama, kennedy, einstein, et al.
    even Tito had failed. He was loved and worshipped; people cried when he died in ?1980.
    but he did not know how to raise socialists or spot fakes {or had been too vainglorious to reject false adulation} nor how to empower them to maintain his beloved juga or his socialism.

    it seems that most of his komunisti or socialists were asocialistic, overly greedy, bossy, snobbish, nepotistic and corrupt.
    that had sufficed for fascists, mostly, to break up yugoslavia and almost destroy socialism.

    it is of utmost import, tho, that one not identify pseudo-socialists with socialism or komunism. One cannot have any degree of socialism without socialists.
    and socialists are a vast minority just about everywhere. and that is the problem as i see it.
    with fascism, the situation is quite different; most fascists are innately so, others are indoctrinated to become such.
    in any case, establishing and maintaining fascism is easy because fascists are vast majority in lands like US, canada, UK and just about everywhere. tnx

  12. Suthiano said on April 17th, 2009 at 12:27pm #


    “it is of utmost import, tho, that one not identify pseudo-socialists with socialism or komunism.”

    I agree 100%, however, I also believe that labels are dynamic… So if ‘socialists’ (pseudo-socialists) exist everywhere, people will have no faith in socialism, which has come to include the above in its meaning… this is unavoidable even if we progressives are careful with how we use the term.

    “One cannot have any degree of socialism without socialists.”

    Again, I agree with you. This is what I am trying to draw out: how do human beings develop into ‘socialists’ as opposed to ‘anti-social’ creatures who damage society in any number of ways?

    The materialist would see these issues resolved if there was an equality in wealth.

    I think we are both disagreeing with this as a possibility. So how do human beings ‘ascend’ to another place? That’s why I bring in the spiral, which is, not by my own doing, cognate with SPIRIT.

    Education is important, but it requires that you already have power, and that you can put in place effective ‘socialist’ teachers (and not pseudo-socialists). It is also dangerous to think that a ‘counter-hegemony’ is what we want to establish.

    We are interconnected, but it is up to the individual to breathe. If these individuals do not come to an awareness of their own breath, we cannot FORCE them, or even TRAIN, them to do so. They won’t learn unless they really want to learn, which takes a step on their behalf.

    So how does the human ascend to such levels? By continuing to structure there lives around the production of a good or service? I tend to think otherwise, but I do have a lot left to learn.

  13. bozh said on April 17th, 2009 at 2:55pm #

    at one time, eon ago and for an eon, socialism was inborn and taught; i.e., youngsters had socialists as teachers. Such people taught by their behavior and by word.

    it had to be that way, i educe, or else a clan or a small group of people divided and in brutal competitions against one another wldn’t have survived or multiplied.

    fascism arose much later in our panhuman development and adaptation for survival. Fascism {a structure of society alien and vitiating to us} probably arose with shamans; and a few thousand yrs later institutionalized by clergy and individuals who began to arrogate to selves ever bigger and better slice of meat or abode/clothes.

    nevertheless, even fascism now may had partly embedded self in peoples bones. Misteachings always being a factor as well.
    as i see it, there are just two structures of society: socialist, with much gregarious, friendly, and cooperative people and fascist.

    however, in US, 97% of amers behave in a fascist way and youngsters unknowingly, simply ape them. Schools in US {elsewhere as well} only teach one model or one ism, the americanism.
    thus i avoid to use the word “capitalism” as capitalism may not have anything to do with structure of a society but a mode of financing/ money management, and production/sales.
    does obama know this? Yes is my answer. And that is how US ruling class likes it. tnx

  14. Hue Longer said on April 17th, 2009 at 5:17pm #

    I was taught as a youngster that I wanted to give the world a Coke and keep it company

  15. Tennessee-Chavizta said on April 17th, 2009 at 7:12pm #


    Some people claim that American workers are “bought off by the system” — that they don’t rebel because they are “too well off,” and that therefore “things have to get worse before they get better.”

    In reality, the majority of workers in the United States have seen their living conditions steadily deteriorate since 1973. Working people struggle every day to make ends meet and live in constant fear that their family will be thrown into the streets if they lose their job or get sick. The fact is that the United States has the highest poverty and inequality rates of any industrialized nation and as high an infant mortality rate as Malaysia.

    But bad living conditions don’t automatically lead to struggle. If that were the case, then the whole continent of Africa would be in a permanent state of rebellion.

    In reality, a central obstacle toward collective resistance is the widespread illusion of powerlessness promoted by the bosses and their lackeys in the mass movements. All too often we activists are told, “I support your cause and I’d go to your protest, but it won’t make a difference anyhow!” This pervasive sense of powerlessness is why we cannot radicalize the American people by ourselves. Go buy a bull-horn, stand on a busy street-corner, shout about the need for revolution and see how many people you convince.

    Most people will reject the case for radical change as “utopian” until they experience the empowering force of collective resistance. That is why fightbacks around immediate demands — for example, for better wages or against budget cuts and ICR raids and deportations — are so important. These struggles rapidly transform ordinary people, give them a sense of their strength, and force them to start shedding their illusions.

    Farrell Dobbs was a young, Republican-voting worker who became a union leader and Marxist through his life-changing experience the historic 1934 Minneapolis truck-drivers’ strike. In his book about the strike, “Teamsters Rebellion”, he noted:

    “Wise-guys of the day spoke about the ‘passivity’ of the working class, never understanding that the seeming docility of the workers at a given times is a relative thing. If workers are more or less holding their own in daily life and expecting that they can get ahead slowly, they won’t tend to radicalize. Things are different when they are losing ground and the future looks precarious to them. Then a change begins to occur in their attitude, which is not always immediately apparent. The tinder of discontent begins to pile up. Any spark can light, and once lit, the fire can spread rapidly.”

    The new immigrants rights’ movement is a perfect example of this explosive process. Years went by with barely a peep from immigrants — so the whole world was taken by surprise when millions poured into the streets in the spring of 2006.

    Most participants entered the movement with little political clarity. Many thought that the Democrats were their allies — until they saw them unite with Bush around a reactionary, criminalizing “reform bill” in June 2007. Many thought the police existed to “fight crime and protect communities” — until they saw the L.A. cops brutally attack peaceful protestors on May 1, 2007. Similarly, both the strengths and weaknesses of the movement demonstrated in practice the need for more unity among workers of different nationalities. And most important, these experiences revealed to millions their collective power. The sleeping giant has begun to wake up.

    What is the Relationship Between Reform and Revolution?

    Today — under capitalism in its final stage of decay — any reform that could meaningfully raise the living standards of the majority inevitably reaches beyond the narrow limits of the system. Not one of the principal demands of the existing mass movements can be fully satisfied under capitalism. In this context, the fight to defend past reforms and win new ones is inextricably tied to the fight for to overthrow the system as a whole.

    Independent mass fightbacks — no matter how limited the initial demands — are the first step of revolution, the bridge toward higher levels of consciousness and organization, because ordinary people learn in the fire of struggle.

    These life-changing experiences can rapidly burn political illusions to the ground. Take the example of Martin Luther King Jr., who became a radical after bitter experience pushed him to drop his initial moderate perspective. Here’s a typical quote from him in 1968, right before his assassination: “The Black revolution is forcing America to face all its interrelated flaws — racism, poverty, militarism and materialism. It is exposing evils that are rooted deeply in the whole structure of society. It reveals systemic rather than superficial flaws and suggests that radical reconstruction of society itself is the real issue to be faced.”

    Struggles of one sector of the oppressed also inspire other struggles. Confidence and hope are contagious. That’s why years, even decades, can go by with barely any major protests, but when a mass movement does arise, it hits society like a bolt of lightning — and tends to spread like wildfire throughout the working class and throughout the country.

    This has happened time and time again in our country’s history. Look at how the Civil Rights movement of the early 1960s fueled the Black Power and antiwar movements — which in turn fueled and fed off of the explosive fightbacks of women, Chicanos, gays, and rank-and-file workers from 1968 to 1973.

    What Does a Revolution Look Like?

    Revolutions are the climax and inevitable result of the whole preceding period of sharpening social crisis and deepening mass mobilizations. In this sense, revolutions are like earthquakes — which occur at the inescapable moment when years of friction built up between colliding landmasses reaches a breaking point and must be released.

    When society’s crisis reaches its boiling point, millions of ordinary people with no previous experience in politics explode onto the political stage, in search of a solution to their most urgent needs. This — not a conspiracy of armed radicals — is what we mean when we talk about revolution.

    Leon Trotsky, who together with V.I. Lenin and the Bolshevik Party, led the Russian workers to power in October 1917, around the demands of “Bread, Land, and Peace!”, noted:

    “The most unquestionable feature of a revolution is the direct interference of the masses in historical events. In ordinary times the state — be it monarchical or democratic — elevates itself above the nation, and history is made by specialists in that line of business — kings, ministers, bureaucrats, parliamentarians, journalists. But at those crucial moments when the old order becomes no longer endurable to the masses, they break over the barriers excluding them from the political arena, sweep aside their traditional representatives, and create by their own interference the initial groundwork for a new regime. The history of a revolution is first of all a history of the forcible entrance of the masses into the realm of the rulership over their own destiny.”

    When the vast majority mobilizes in its own name, the old illusion of powerlessness is definitively shattered. The ruling class is pushed onto the defensive and becomes paralyzed by crisis. The euphoric feeling that “anything is possible” fills the air. To quote V.I. Lenin, revolutions “are festivals of the oppressed.”

    During periods of revolutionary crisis, general strikes — labor strikes of all the workers of a city or even the whole country — can definitively demonstrate the earth-shaking power of the working class to run society on their own. For example, during the San Francisco general strike of 1934, communal dining halls run by the strike committee fed the whole city.

    The old divisions imposed on the majority can be torn down in these history-making moments. Workers and youth of different sexes, backgrounds, nationalities, and political traditions unite in struggle. In the words of Karl Marx, “Revolution is necessary not only because the ruling class cannot be overthrown in any other way, but also because the class overturning it can only in a revolution succeed in ridding itself of all the muck of ages and become fitted to found society anew.”

    This unprecedented wave of resistance requires a new type of organization to channel the struggle — workers’ councils. These mass institutions of grassroots democracy — where all representatives are directly elected and instantly recallable by their peers in the workplaces — are instruments of struggle and, potentially, organs of a new power. During the great upheavals of the last century these organizations arose under different names— most famously, they were called soviets (Russia 1905 and 1917), factory councils (Italy 1920), workers’ councils (Germany 1918, Hungary 1956), Asamblea Popular (Bolivia 1971 and 2003), cordones industriales (Chile 1973), and shoras (Iran 1979).

    The emergence of workers’ councils opens a stormy situation of dual power — where the capitalist state exists side by side with the councils, embryos of a new workers’ government. Obviously, this situation cannot last forever. Either the people will put all power into the hands of the councils or the old regime will wait out the crisis and then re-impose its rule.

    But won’t the government use the army and police to crush any revolution? The army is made up of the poor and in times of revolutionary crisis, rank-and-file mutinies within the armed forces are common. Would you shoot your friends and family members who are fighting for social change?

    In 1971, American Colonel Robert D. Heinl Jr. lamented, “Our army that now remains in Vietnam is in a state approaching collapse, with individual units avoiding or having refused combat, murdering their officers and noncommissioned officers, and dispirited where not near-mutinous. Conditions exist among American forces in Vietnam that have only been exceeded in this century by the collapse of the Czarist armies in 1916 and 1917.”

    By winning over the ranks of the army, workers and the oppressed can come to power peacefully. The monumental task of rebuilding society on a free and democratic basis would begin and a brilliant new chapter in human history would unfold.

    Is a Revolutionary Socialist Party Necessary?

    History shows that without the help of a sufficiently influential revolutionary socialist party, workers can rock capitalism back on its heels, but cannot knock it out.

    The masses storm onto the political stage with a definite sense that “things must change,” but without a clear perspective on how this change can be accomplished. This poses an obvious problem, because revolutionary situations cannot last for long — no more than a few days, weeks or months at most. There is little time for experimenting or learning by trial and error. If the workers fail to strike when the iron is hot, demoralization will seep in and the counter-revolution will take the initiative.

    This is why a revolutionary socialist party — which acts as the workers’ collective memory by passing on the lessons learned through past struggles — is needed. Trying to fight for revolution without the benefit of these lessons is like hiking at night without a map or a flashlight and hoping you will eventually make it to your destination.

    In the same way that steam needs a piston to be effectively channeled, the mass upsurges of the oppressed can only result in victory when a revolutionary party exists that can effectively provide a realistic plan toward taking power and can help the people overcome all the obstacles in their path.

    As we mentioned earlier, the most important obstacles are the bought-off “left-wing” leaders and organizations that promote class-collaboration. These representatives of the bosses within our movement are the folks who today dissolve our struggles and independent organizations into the Democratic Party and who tomorrow, during a revolutionary crisis, will preach “moderation” and try to put a brake on the upsurge by pushing for “alliances” with our exploiters.

    In times of mass upheaval, when the capitalists and their direct representatives are largely discredited in the eyes of the masses, these “reformist” leaderships are the only hope to preserve the system. The defeats of dozens of revolutions last century rest largely on their shoulders. Leon Trotsky concluded, “The historical crisis of mankind is reduced to the crisis of revolutionary leadership.”

    Is Socialism Against Human Nature?

    Some argue that even if a revolution did take place, it would soon degenerate — like in Russia — because socialism is against “human nature.”

    We socialists don’t deny that many people today are greedy or selfish. That doesn’t mean, however, that these are inborn traits. They are the by-products of an inequitable distribution of wealth and are reinforced by the capitalist-controlled media and educational system.

    Capitalism wasn’t created by “natural greed”: capitalism makes greed seem natural. The idea that people are naturally greedy is similar to the idea, popular during feudalism, that “some are born to rule, and some are born to be ruled.” Every ruling class wants people to think its rule is eternal and natural.

    But capitalism is far from eternal. For most of human history, there were no classes, and we lived communally in small bands, dividing up the work and the wealth in the interest of everyone. Indeed, various classless societies — such as the !Kung people in Namibia and Botswana — still exist today. “Human nature” isn’t different in these cultures — the structure of society is.

    Furthermore, modern science has shattered the myth that human biology makes a society based on solidarity impossible. The famous biologist Stephen Jay Gould wrote: “Why imagine that specific genes for aggression or spite have any importance when we know that the brain’s enormous flexibility permits us to be aggressive or peaceful, dominant or submissive, spiteful or generous? Violence, sexism and general nastiness are biological since they represent one subset of a possible range of behaviors. But peacefulness, equality and kindness are just as biological—and we may see their influence increase if we can create social structures that permit them to flourish.”

    Under capitalism, humanity is like a plant trying to flower in a dark cellar— we don’t get much of a chance to develop our potential. But, if we were raised in the soil of a different society, isn’t it obvious that we would change? In a socialist society where there is an abundance of goods, what would be the point in hoarding or stealing?

    Don’t Revolutions Lead to Dictatorships? Look at Russia…

    Socialism does not mean “making everybody the same.” It does not mean totalitarianism. It does not mean “the end of freedom.” These are myths. Socialism means the expansion of democracy in all aspects of society.

    But society can only reach this stage by ending economic scarcity. In economically backward countries like Russia, China or Cuba, the economic preconditions for building a socialist society simply did not exist. Socialism cannot be built within the borders of one country — especially not a poor, peasant country.

    Why then did V.I Lenin, Leon Trotsky and the Bolshevik Party lead the Russian workers to power in October 1917? The answer is simple. They saw themselves as “the advanced outpost of the world revolution” and sought to spread the revolution internationally.

    In fact, a massive revolutionary wave did sweep over Europe and the world after 1917, but the workers’ revolutions in Germany, Italy, and Hungary were crushed and drowned in blood, due to the absence of revolutionary parties able to lead the struggle to victory. By 1921, starvation, poverty, and unemployment ravaged Russia — due to an imperialist-funded civil war, the armed invasion of 14 countries, and a full economic blockade.

    The tremendous scarcity of essentials like food and clothing led some government functionaries to begin to siphon off goods for themselves. In order to secure its privileged position, this emerging bureaucracy, led by Joseph Stalin, had to eliminate all organs of democracy in the party and the government. Stalin’s first victims were those socialists of the “Left Opposition” led by Leon Trotsky, who fought (as had V.I. Lenin in the last months of his life) to return the revolution to its democratic roots and the newly formed Third International to its internationalist program. The Fourth International grew out of this heroic struggle.

    Here’s the point: If you understand the socio-economic roots of Stalinism, then you can see why what happened in Russia wouldn’t happen in the United States, the richest, most technologically advanced country in the world.

    What Is Socialist Organizer and What Are We Fighting For?

    Socialist Organizer is the U.S. section of the Fourth International, an international organization of workers and youth in 44 countries that stands in the revolutionary socialist traditions of Karl Marx, V.I. Lenin, and Leon Trotsky.

    We participate in all struggles for progressive social change, mobilize for the unity and independence of working people, the oppressed, and their organizations, and always try to point the way forward in the struggle.

    We fight for socialism, for the expropriation of the major means of production. We fight for a society where the people, organized into grassroots multi-party councils, would decide all major economic, political, and cultural questions. Democratic rights such as freedom of speech, freedom of the press, freedom of assembly, and freedom of association would become realities for all.

    Production would finally be put toward providing for human needs. Vast resources would be allocated to provide for everybody’s basic human needs, to eradicate illnesses such as AIDS, and to take measures to save the environment by constructing mass public transportation and harnessing reusable energy sources, to mention just two proposals. The real history of humanity would begin.

    Is this utopian? Not at all. The resources already exist to provide for the basic needs of all humans on this planet. The United Nations itself estimated that the cost for all “developing” countries of “achieving and maintaining universal access to basic education for all, basic health care for all, reproductive care for all women, adequate food for all, and safe water and sanitation for all is roughly $40 billion a year… This is less than 4% of the combined wealth of the 225 richest people.”

    Jack London brilliantly described socialism as follows: “In such a day incentive would be finer and nobler than the incentive of today, which is the incentive of the stomach. On the contrary, the people would be impelled to action as boys and girls at games, as artists painting canvases, as inventors, as scientists, as poets serving humanity by singing. The spiritual, intellectual, and artistic uplift in such a society would be tremendous. All the human world would surge upward in a mighty wave.”

    The fate of humanity is at stake. In the 21st century, revolutionary situations are going to arise at home and abroad because capitalism is a self-destructing system that can only create more misery, more hunger, and more war.

    But will the upcoming revolutions meet the same tragic fate as most of those in the 20th century? Will society go forward to socialism or backwards to chaos and collapse? The answer largely depends on if we can build the revolutionary organization we need in time. It depends on people like you.

  16. Tennessee-Chavizta said on April 17th, 2009 at 7:21pm #

    Americans think that democrats and republicans (Tea Party for example) are parties of the “little guy” hahaha how dumb, ignorant and mind-controlled people are in the U.S.

  17. Synic3 said on April 17th, 2009 at 8:05pm #

    In this thread I read a lot of abstract thinking and ideas but unfortunately these ideas are and will remain abstract, good on
    paper but hard to apply in real life.
    And I read the oft repeated mantra , that was not real socialism or real
    capitalism or real free enterprise or real this or real that which is always uttered in defense of deficiencies of religions or political or economic theories. It seems there is always not a real thing.
    In my humble opinion, the best system is strictly regulated capitalism
    where companies are watched closely and are not allowed to
    grow larger than than a specific size.
    The privately owned Federal Reseve Banks should be nationalized and
    the issuance of money should only be the the Treasury Dept.
    Oil, gas, coal , large scale logging and electricity production and distribution should be nationalized.

  18. Deadbeat said on April 18th, 2009 at 1:23am #

    Synic3 writes …
    In my humble opinion, the best system is strictly regulated capitalism
    where companies are watched closely and are not allowed to
    grow larger than than a specific size.

    Unfortunately Synic3 is too lazy to learn from history and rather spew cynicism than analysis. His “solution” is the very Liberalism that failed because the Liberals kept the Capitalist in power and the Capitalist took 69 years to rollback New Deal regulations. Thus “heavily regulated” Capitalism won’t work because HISTORY has proven its failure. Also the “free market” doesn’t work because as we see Capitalism is too unstable and a grossly UNDEMOCRATIC economic system.

    Also unfortunate is that Synic3 has a SEMANTIC problem. For some reason Synic3 hasn’t given up on the idea of “Democracy” despite the fact that the United States is NOT a Democracy. The same is true about the USSR and China were never Socialist because the people were not in charged of the economy. So despite the USSR calling itself Socialist doesn’t make it Socialist. Therefore HISTORY shows us is that undemocratic and unfair economic structures FAILS.

  19. Suthiano said on April 18th, 2009 at 1:44am #

    “at one time, eon ago and for an eon, socialism was inborn and taught”

    aha, yes.

    Yes, we used to have a spiritual sense of self. Alpha was Aleph, the symbol not only in an ‘alphabet’…

    One of the biggest hoodwinks is “I am the Alpha and the Omega”.

    Semetic languages did not end with Omega (greek), they ended with Tau.

    I am the Aleph and the Tau.

    The meaning is very different.

    Our foolish, disconnected (from history) souls assume our cultures are separate… as opposed to recognizing them as different parts of a stream.

    We imagine mathematics as addition: “if you have one apple, and then you add another, how many apples do you have? 2, add another? 3…. The ancients saw ONE AS THE WHOLE. 2 was to split the whole in half!

    Witch, wittich, wit, weet — to know — wys, wis, wise, Wizard. Who’s been disappeared and why?

    Dissident voice is a stepping PETROS towards other things.

  20. Synic3 said on April 18th, 2009 at 5:51am #

    Deadbeat wrote:
    “The same is true about the USSR and China were never Socialist because the people were not in charged of the economy”.


    But I responded to this point when I wrote:
    “And I read the oft repeated mantra , that was not real socialism or real
    capitalism or real free enterprise or real this or real that which is always uttered in defense of deficiencies of religions or political or economic theories. It seems there is always not a real thing.”

    It seems whenever a concept fails when it is applied and collide with
    real life, its defenders jump shouting but that concept was “never
    implemnted correctly.’ That happened many many times!!
    So, tell me please how you will put people in “charge of the economy”
    without hierarchical structure which is controlled by individuals??!!
    Those individual either due to greed and corruption or due to collision
    with real life, eventually will deviate from the abstract and beautiful.
    Again in my humble opinion, the best system will be mixture of several
    systems and ideas without any blind faith in any one of them and be
    open to try and error as we move forward.

  21. Max Shields said on April 18th, 2009 at 7:56am #


    The point is that none of the implementations are OR will ever be what someone wrote down in some manifesto. People just are wired for that and never will be.

    It’s not the idea(s), but the fact that the human condition is built to do things, some of which are contradictory or create excessive tension.

    It is not capitalism that creates this nor socialism (as isms). It is what we do; and the problem is universal, and only differs in scale.

    So, while I agree that there are ideologues that say the Soviet Union didn’t do Communism right; the tragic truth is NO ONE HAS, or EVER WILL.

  22. brs said on April 20th, 2009 at 9:04am #

    Part of the problem lies in the hijacking of language. The Orwellian doublespeak of the banksters declares finance schemes or more correctly scams to be “Products” and “innovation” as if they were in the same category as personal computers or lifesaving drugs or mass communication. They are not. Nor is banking and finance an “Industry” any more than gambling or prostitution.

    Is this language important? Consider what we value and how we value it. Why is a 20 something or 30 something stock and bond salesboy or trader many times more valued than any doctor, engineer, scientist, nurse or even carpenter? There is no justification for the money skimmed from the economy by these finance whiz kids. That is part of the reason why we do not have the money to maintain our roads and bridges, to provide health care to all or to see that people are housed and fed.

  23. Shobha Wagley said on November 16th, 2009 at 10:30am #

    I have been Working on human mind and thinking process and being inventing different very new scientific hidden secret mesteries 100%
    reality of the mind. need help to create more and show and sell this to
    the right platform is very urgent need. Please hepl. Thank you

  24. Shobha Wagley said on November 16th, 2009 at 10:30am #

    I have been Working on human mind and thinking process and being inventing different very new scientific hidden secret mesteries 100%
    reality of the mind. Need help to create more and show and sell this to
    the right platform is very urgent need. Please help. Thank you