Economic Disaster

Are You Next?

The human costs of the U. S. financial crisis are coming into clear focus. Family members lose their jobs, then their homes, and the cascade of ruin begins in earnest. Health problems are ignored, anxiety and depression increase, and domestic violence is more common. Many are on the edge, anticipating their worst fears: losing their home or apartment then struggling to find the next meal. The biggest issues right now are about basic needs — food and shelter.

There’s a rational, reasonably immediate solution to a good part of the economic disaster. The banks won’t like it but you will. But first the sad facts.

There were 2.3 million default notices to homeowners in 2008, up 80% over 2007. It will be worse in 2009 with Option ARMs coming due (those favorites of Alan Greenspan).

Typically the nation’s economic leader, California, saw foreclosures increase by 160% in 2008. As a result three percent of California homes, 240,000 in all, became bank properties. These are the same banks that slithered up to the bar and demanded a double shot of the new elixir for failed financial institutions, federal bailouts. Put it on the tab.

To understand the full extent of the economic collapse, consider this. The current official unemployment rate is 7.2%. This includes those out of a job who have actively sought employment in the past four weeks. But this figure understates the level of economic distress. There are 1.9 million unemployed “marginally attached” workers not counted and 8.0 million underemployed workers seeking full time employment.

The total unemployed and under employed figure is 21 million U.S. workers.

Michigan, Florida, Ohio, and South Carolina are facing hard times similar to those in California. Your state is next. It’s a nationwide phenomenon.

Despite hundreds of billions in giveaways to the banks, there are no reports of a single U.S. citizen or family receiving a bailout from Washington to help them stay in their home.

What happens when you’re thrown out of your home or apartment and you have no job?

To begin with, you’re poor.

You can live on the street, move in with relatives, or seek to rent a home or an apartment. After a foreclosure, your credit rating will probably disqualify you from most opportunities at the outset. If you’re in a warmer climate, you can live in a tent city which began springing up across the country last September.

You can and will enter an entirely new world where you’re exposed to a variety of risks that will make it very difficult to put your life back together again. Crime, infectious diseases, underpayment for work, and increasing social isolation are routine.

You can become a crime victim. In your new world, that of the poor, you will find that you’re among the group with the majority of violent crime victims.

You can seek and receive occasional “subprime” medical care in hospital emergency rooms. But the days of serious attention to an ongoing condition, arthritis for example, are over for you.

You can watch your life melt away and your family suffer, all without the prospect of any real assistance. Homeless shelters are full in most places. Public health programs have been overflowing for years. The “welfare state” simply doesn’t exist. You’re screwed.

Wall Street welfare was supposed to save us from all of this according to the Bush-Cheney scam artists. Those two and their henchmen doubled the national debt in just a few short years of concentrated looting. Somehow, the most recent Wall Street donations were supposed to secure failed financial institutions and generate a stimulus for the economy. No deal.

To add insult to that injury, a $140 billion tax cut for banks was written “into law” by a Treasury Department bureaucrat, a move that everyone consulted said was clearly illegal. Nothing was done about it. In fact, a key congressional staffer explained it this way: “We’re all nervous about saying that this was illegal because of our fears about the marketplace.” (Nov. 10, 2008)

Crime pays. Deception pays.

But the money to pay working people isn’t there thanks to the financial manipulations that made the very wealthy even wealthier and left the rest with little to nothing in return. There is no room at this inn for people who need a helping hand.

When Do the People Collect?

California passed a law that cut into foreclosures by requiring that the banks actually give a reasonable notice of default prior to tossing families onto the street. This program had an impact for a few months but foreclosures bounced back and kept growing.

Representative Marcy Kaptur, (D-OH), responded to the economic collapse of Toledo, Ohio (11% unemployment) with a sensible idea. Foreclosures and evictions are a commonplace event. Kaptur tells citizens to stay put, don’t leave your home if a foreclosure notice is issued. “Produce the Paper” is the theme. Due to the complexity of many bad loans, it can be very difficult to figure out which bank actually holds the mortgage or to even find a true loan document. Without that information, there are legal challenges that can force banks to delay or forgo eviction.

Time for a Nationwide “Cramdown”

The easiest solution, the most immediate, is a cramdown. What’s that?

In bankruptcy court, a judge can take the total amount of a mortgage and divide it into two parts. The appraised home value becomes the “secured claim” and “the amount over the current appraised home value” becomes the “unsecured claim.” The unsecured amount is discarded. The secured amount, i.e., current appraised value, becomes the homeowner’s only debt. This debt can be amortized over the life of the loan. Thus monthly payments go down, people have a much better chance of staying in their homes, and they have some disposable income for essentials. (see here)

Congressional Democrats and President Obama are arguing over legislation that would give bankruptcy judges greater options for “cramdowns.” Both sides of the argument are out of touch with the accelerating harsh realities of the U.S. economy as experienced directly by the citizens.

There’s no court that needs to hear this case. The nationwide cramdown should be negotiated directly by the Obama administration, in behalf of all citizens and the remaining banks. Obama’s two financial system insiders, Treasury Secretary Timothy Geithner and chief economic adviser Larry Summers, would all of sudden become the good cop/bad cop negotiators shoving the banks in a corner and forcing them so submit to the plan.

Cramdowns were mentioned in the campaign as one of several options to address the needs of homeowners. Obama can resist the idea and those in Congress can ignore the scope of action needed. But the people will bring them back to reality very soon, just as they did on the specific issue of having someone in the cabinet so rich and aloof that he forgets to pay $126,000 in income taxes.

Meeting the urgent need for people to have a home means less social and economic disruption. There would be an immediate stimulus with more money available to spend in the real economy. This stimulus program would put money back in the economy in months not years.

Now is the time.

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.

23 comments on this article so far ...

Comments RSS feed

  1. RG the LG said on February 5th, 2009 at 12:47pm #

    Oh, so bleak.

    Oh, so true.

    And when will we actually react?

    We change parties … but not really leaders.

    It is the same old same old …

    Capital wins, and you are screwed!

    Or, capital wins and we are screwed …

    RG the LG

  2. joed said on February 5th, 2009 at 1:16pm #

    why did you amerikans let this happen to you and espically to your children. why did you allow the murderous bush cheney gang to destroy your commonwealth and your country. why did you let them do it.

  3. Deadbeat said on February 5th, 2009 at 1:38pm #

    Representative Marcy Kaptur, (D-OH), responded to the economic collapse of Toledo, Ohio (11% unemployment) with a sensible idea. Foreclosures and evictions are a commonplace event. Kaptur tells citizens to stay put, don’t leave your home if a foreclosure notice is issued. “Produce the Paper” is the theme. Due to the complexity of many bad loans, it can be very difficult to figure out which bank actually holds the mortgage or to even find a true loan document. Without that information, there are legal challenges that can force banks to delay or forgo eviction.

    This is known as “validating” the debt. You cannot be held liable for a debt that cannot be validated. Also I would argue that there needs to be a restoration of Chapter 7 bankruptcy. But most importantly people should argue that they have already paid $28,000.00/person to the banks and use that payment as a write-down on their debts.

  4. Deadbeat said on February 5th, 2009 at 1:42pm #

    Obama’s two financial system insiders, Treasury Secretary Timothy Geithner and chief economic adviser Larry Summers

    Geithner is a disgrace and should not be heading Treasury. What kind of example does it set when Geithner can flout paying taxes while if any member of his department fails to file their taxes he or she is subject to termination.

  5. Max Shields said on February 5th, 2009 at 1:45pm #

    This is a failed economic system. Geithner, smitner…what’s the difference who drives the truck off the cliff?

  6. Garrett said on February 5th, 2009 at 2:11pm #

    joed,

    It didn’t start with Cheney/Bush, just as US imperialism didn’t start with Israel.

  7. Ramsefall said on February 5th, 2009 at 2:28pm #

    Michael,

    this is a brilliant metaphor that you’ve applied, “These are the same banks that slithered up to the bar and demanded a double shot of the new elixir for failed financial institutions, federal bailouts. Put it on the tab.” Top notch flavor you’ve added.

    That unemployment rate continues to ascend once the incarcerated, adult population is considered.

    Remember all those countless “3rd World” countries that Washington exploited in the 20th century for enormous corporate profits at the expense of entire nations and millions of innocent bystanders? Seems like it’s payback time, and a huge chunk of the US population will have to pick up the tab for the recklessness of their leaders and the corporate criminals who propped them up for election.

    The tables are turning, and my gut tells me that eventually the war machine will have to realign its aim on the widespread, armed, domestic uprise.

    Best to all.

  8. catherine said on February 5th, 2009 at 2:29pm #

    This is known as “validating” the debt. You cannot be held liable for a debt that cannot be validated. Also I would argue that there needs to be a restoration of Chapter 7 bankruptcy. But most importantly people should argue that they have already paid $28,000.00/person to the banks and use that payment as a write-down on their debts.”

    Deadbeat, can you explain this? Are you referring to the amount that’s estimated to be coming from each of us for the bank bailout last year?
    Also, to see Marcy Kaptur’s interview in full, go to
    http://www.democracynow.org/2009/2/3/rep_marcy_kaptur_d_oh_urges (sorry, I don’t know how to do hyperlinks).

  9. Garth said on February 5th, 2009 at 2:57pm #

    Instead of suggesting something Obama’s administration should but won’t likely do, how about suggesting something the banks REALLY wouldn’t like, direct action by the masses?

    I mean, the government never saves the people. It can’t. It’s not natural in capitalism. It can only save itself. The people have to save themselves.

    There’s a whole lot of people out there with nothing to lose, and there’ll be more of them as the crisis develops. That’s a whole lot of people who can band together and revolt. Hope they don’t mind rubber bullets and tasers, or that portable microwave beam I’ve been hearing about, soon to be introduced to protestors…

  10. Deadbeat said on February 5th, 2009 at 3:27pm #

    catherine writes…

    Deadbeat, can you explain this? Are you referring to the amount that’s estimated to be coming from each of us for the bank bailout last year?
    Also, to see Marcy Kaptur’s interview in full, go to
    http://www.democracynow.org/2009/2/3/rep_marcy_kaptur_d_oh_urges (sorry, I don’t know how to do hyperlinks).

    Marcy Kuptur

    Marcy Kuptur is informing her constituents to get legal advice but what she said rhetorically on the floor of the house is for her constituent to stay in their home. She had to clarify that during her DN! interview.

    What she is really saying is that when you get a collection notice is don’t panic and take action. It is inaction that usually winds up in a default judgment that allows the collection agencies to garnish your assets — typically your wages.

    Since the banks engages in bundling these mortgages and credit card debts they have no way of proving their ownership claim to the debt. By the time it goes into collections the agency (or bank in the case of the mortgage) may not be the actual holder of the debt. In addition these debts are so toxic that the banks don’t want to admit to being the holders. In other words they don’t want to be audited as Kaptur mentioned that is why the FDIC and the SEC was not assigned to administer TARP.

    I was recently sued by a collection agency but I countered sued the agency (doing this pro se of course) because I knew that the debt in question was in dispute. Once the debt is in dispute it freezes the ability of the collection agency to collect on it. The collection agency failed to validate that the debt was in dispute and therefore I countered sued the agency on that ground. Because I counter sued they drop their suit and I never paid a dime of the disputed debt. That is why I am a DEADBEAT.

    I also feel sorry for non-custodial parent who are often overlooked and overlooked by this author in this economy because many of them will be branded as “deadbeats” due to their inability to maintain lofty support payments especially parents who have never been out of work before. They cannot have their payment reduced with some bastard judge’s say so. And because of having a stellar work history until now judge may be inclined NOT to reduce their payments. We need a nations of DEADBEATS and the sooner the better because people could possibly get organized on that basis. The whole system of debt and coerced payments is unraveling by the minute.

  11. Max Shields said on February 5th, 2009 at 3:39pm #

    Actually, I think DB has a good point regarding staying in your home. Do NOT let the banks foreclose on debt. The banks generate money based on loans/debt. The only thing of value is capital, land and labor. Together they are wealth. The bank has nothing but a note on your mortgage; a worthless debt; except when they foreclose and they take your house. Then they have WEALTH.

    The US economy is built on debt/consumerism wrapped in a financial system of commoditizing and speculating on EVERYTHING, including non-renewable resources.

  12. joed said on February 5th, 2009 at 5:14pm #

    GARRETT, hows this,
    why did you amerikans let this happen to you and espically to your children. why did you allow the murderous thugs, including the bush cheney gang, to destroy your commonwealth and your country. why did you let them do it.
    my point is, WHY DID YOU AMERIKANS LET THEM DO IT TO YOU. YOU CANT BLAME A VIPER IF IT BITES YOU. BUT IF YOU DONT DO SOMETHING TO STOP THE POISON THEN YOU WILL BE IN TROBLE, AND THE SNAKE AINT GONNA’ HELP YOU ‘CAUSE IT CANT..

  13. Tennessee-Socialist said on February 5th, 2009 at 9:01pm #

    Is the Entire Bailout Strategy Flawed? Let’s Rethink This Before It’s Too Late
    by Joseph Stiglitz

    http://www.globalresearch.ca/index.php?context=va&aid=12180

    Global Research, February 5, 2009
    alternet.org

    Email this article to a friend
    Print this article

    America’s recession is moving into its second year, with the situation only worsening.

    The hope that President Obama will be able to get us out of the mess is tempered by the reality that throwing hundreds of billions of dollars at the banks has failed to restore them to health, or even to resuscitate the flow of lending.

    Every day brings further evidence that the losses are greater than had been expected and more and more money will be required.

    The question is at last being raised: Perhaps the entire strategy is flawed? Perhaps what is needed is a fundamental rethinking. The Paulson-Bernanke-Geithner strategy was based on the realization that maintaining the flow of credit was essential for the economy. But it was also based on a failure to grasp some of the fundamental changes in our financial sector since the Great Depression, and even in the last two decades.

    For a while, there was hope that simply lowering interest rates enough, flooding the economy with money, would suffice; but three quarters of a century ago, Keynes explained why, in a downturn such as this, monetary policy is likely to be ineffective. It is like pushing on a string.

    Then there was the hope that if the government stood ready to help the banks with enough money — and enough was a lot — confidence would be restored, and with the restoration of confidence, asset prices would increase and lending would be restored.

    Remarkably, Bush administration Treasury Secretary Henry Paulson and company simply didn’t understand that the banks had made bad loans and engaged in reckless gambling. There had been a bubble, and the bubble had broken. No amount of talking would change these realities.
    It soon became clear that just saying that we were ready to spend the money would not suffice. We actually had to get it into the banks. The question was how. At first, the architects of the bailout argued (with complete and utter confidence) that the best way to do this was buying the toxic assets (those in the financial market didn’t like the pejorative term, so they used the term “troubled assets”) — the assets that no one in the private sector would touch with a 10-foot pole.

    It should have been obvious that this could not be done in a quick way; it took a few weeks for this crushing reality to dawn on them. Besides, there was a fundamental problem: how to value the assets. And if we valued them correctly, it was clear that there would still be a big hole in banks’ balance sheets, impeding their ability to lend.

    Then came the idea of equity injection, without strings, so that as we poured money into the banks, they poured out money, to their executives in the form of bonuses, to their shareholders in the form of dividends.

    Some of what they had left over they used to buy other banks — to pursue strategic goals for which they could not have found private finance. The last thing in their mind was to restart lending.

    The underlying problem is simple: Even in the heyday of finance, there was a huge gap between private rewards and social returns. The bank managers have taken home huge paychecks, even though, over the past five years, the net profits of many of the banks have (in total) been negative.

    And the social returns have even been less — the financial sector is supposed to allocate capital and manage risk, and it did neither well. Our economy is paying the price for these failures — to the tune of hundreds of billions of dollars.

    But this ever-present problem has now grown worse. In effect, the American taxpayers are the major provider of finance to the banks. In some cases, the value of our equity injection, guarantees, and other forms of assistance dwarf the value of the “private” sector’s equity contribution; yet we have no voice in how the banks are run.

    This helps us understand the reason why banks have not started to lend again. Put yourself in the position of a bank manager, trying to get through this mess. At this juncture, in spite of the massive government cash injections, he sees his equity dwindling. The banks — who prided themselves on being risk managers — finally, and a little too late — seem to have recognized the risk that they have taken on in the past five years.

    Leverage, or borrowing, gives big returns when things are going well, but when things turn sour, it is a recipe for disaster. It was not unusual for investment banks to “leverage” themselves by borrowing amounts equal to 25 or 30 times their equity.

    At “just” 25 to 1 leverage, a 4 percent fall in the price of assets wipes out a bank’s net worth — and we have seen far more precipitous falls in asset prices. Putting another $20 billion in a bank with $2 trillion of assets will be wiped out with just a 1 percent fall in asset prices. What’s the point?

    It seems that some of our government officials have finally gotten around to doing some of this elementary arithmetic. So they have come up with another strategy: We’ll “insure” the banks, i.e., take the downside risk off of them.

    The problem is similar to that confronting the original “cash for trash” initiative: How do we determine the right price for the insurance? And almost surely, if we charge the right price, these institutions are bankrupt. They will need massive equity injections and insurance.

    There is a slight variant version of this, much like the original Paulson proposal: Buy the bad assets, but this time, not on a one by one basis, but in large bundles. Again, the problem is — how do we value the bundles of toxic waste we take off the banks? The suspicion is that the banks have a simple answer: Don’t worry about the details. Just give us a big wad of cash.

    This variant adds another twist of the kind of financial alchemy that got the country into the mess. Somehow, there is a notion that by moving the assets around, putting the bad assets in an aggregator bank run by the government, things will get better.

    Is the rationale that the government is better at disposing of garbage, while the private sector is better at making loans? The record of our financial system in assessing credit worthiness — evidenced not just by this bailout, but by the repeated bailouts over the past 25 years — provides little convincing evidence.

    But even were we to do all this — with uncertain risks to our future national debt — there is still no assurance of a resumption of lending. For the reality is we are in a recession, and risks are high in a recession. Having been burned once, many bankers are staying away from the fire.

    Besides, many of the problems that afflict the financial sector are more pervasive. General Motors and GE both got into the finance business, and both showed that banks had no monopoly on bad risk management.

    Many a bank may decide that the better strategy is a conservative one: Hoard one’s cash, wait until things settle down, hope that you are among the few surviving banks and then start lending. Of course, if all the banks reason so, the recession will be longer and deeper than it otherwise would be.

    What’s the alternative? Sweden (and several other countries) have shown that there is an alternative — the government takes over those banks that cannot assemble enough capital through private sources to survive without government assistance.

    It is standard practice to shut down banks failing to meet basic requirements on capital, but we almost certainly have been too gentle in enforcing these requirements. (There has been too little transparency in this and every other aspect of government intervention in the financial system.)

    To be sure, shareholders and bondholders will lose out, but their gains under the current regime come at the expense of taxpayers. In the good years, they were rewarded for their risk taking. Ownership cannot be a one-sided bet.

    Of course, most of the employees will remain, and even much of the management. What then is the difference? The difference is that now, the incentives of the banks can be aligned better with those of the country. And it is in the national interest that prudent lending be restarted.

    There are several other marked advantages. One of the problems today is that the banks potentially owe large amounts to each other (through complicated derivatives). With government owning many of the banks, sorting through those obligations (“netting them out,” in the jargon) will be far easier.

    Inevitably, American taxpayers are going to pick up much of the tab for the banks’ failures. The question facing us is, to what extent do we participate in the upside return?

    Eventually, America’s economy will recover. Eventually, our financial sector will be functioning — and profitable — once again, though hopefully, it will focus its attention more on doing what it is supposed to do. When things turn around, we can once again privatize the now-failed banks, and the returns we get can help write down the massive increase in the national debt that has been brought upon us by our financial markets.

    We are moving in unchartered waters. No one can be sure what will work. But long-standing economic principles can help guide us. Incentives matter. The long-run fiscal position of the U.S. matters. And it is important to restart prudent lending as fast as possible.

    Most of the ways currently being discussed for squaring this circle fail to do so. There is an alternative. We should begin to consider it.

    AlterNet is making this material available in accordance with Title 17 U.S.C. Section 107: This article is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

    Joseph Stiglitz, a Nobel laureate, is a professor of economics at Columbia University.

    Global Research Articles by Joseph Stiglitz

  14. Tennessee-Socialist said on February 5th, 2009 at 9:03pm #

    February 4, 2009

    The Big Cramdown
    The Deepening Economic Crisis
    By MARGARET KIMBERLEY

    http://counterpunch.org/kimberley02042009.html

    The American economy continues its slide to new depths of brokenness and dysfunction. January 2009 was the worst January ever for the benchmark S&P 500 Index. In the last week of that same month, major corporations announced the layoffs of more than 100,000 workers. The state of New York is borrowing funds in order to pay benefits to an ever growing number of unemployed. The state of California can’t pay anyone anything, sending IOUs in lieu of tax refund checks. The other 48 states are in similarly dire straits. The federal government is broke, yet the new president is about to turn over the next round of bailout money to the financial services industry without any demand that working Americans benefit from the continued public largesse.

    While Americans focus on nonsense, the worldwide economic crisis strengthens its grip. Fortunately, citizens of other countries are not going quietly into the night. The usually peaceful people of Iceland threw out their government after international banksters destroyed their economy. The French, never shy about protesting, took to the streets to show their government that they wouldn’t be silent as unemployment rises and wages fall. The rest of the world may make demands on their political leadership, but Americans are stuck in a morass of apathy and ignorance brought about by corporate media disinformation.

    If the millions of Americans who voted for Barack Obama were to make demands on the system, there might be some hope for the nation. Unfortunately they are singularly unprepared to do anything they should do in order to save themselves. They ought to demand true health care reform. A system guaranteeing access for all would help individuals and also businesses such as the auto industry that are going bankrupt in part because of the cost of health care. Citizens ought to demand drastic cuts in military spending for the nation that spends more on defense than the rest of the world combined. Instead they are foolishly impressed when Obama puts on a show and pretends to be concerned about corporate jets and billion dollar bonuses on Wall Street.

    Obama could have had an anti bonus provision in the TARP bail out bill if he had wanted one. As his party’s nominee for president, he gave TARP his full blessing. He said nothing that his banker backers didn’t like and now pretends that he is shocked, shocked, to find out that his fund raisers like to make and take as much money as possible.

    The much discussed stimulus bill is also a meaningless distraction. The “shovel ready” infrastructure projects do nothing to save homes or jobs or loosen credit. The stimulus bill is instructive only in that it demonstrates how two-faced Barack Obama has turned out to be. He added tax cut provisions to the legislation not because he thought he would get Republican support. He already knew he would not. He added those provisions because he wanted them all along, knowing full well that Democratic House members would look and feel like chumps in the deal making process. Speaker Nancy Pelosi acknowledged as much butdemurred when asked if the tax cuts provisions might be removed. “It’s something that we can live with,” said the House Speaker. Nancy should speak for herself.

    Easily fooled Americans were glued to the television watching the Obama inauguration while simultaneous ignoring their own worsening financial situation. Who can bother to look at the fine print on multi-billion dollar deals when HISTORY is being made? Now the same zombified population ignores presidential inaction on bankruptcy “cramdown” legislation that could save their homes, explicit threats to Social Security, and back-tracking on employee free choice for labor unions.

    In their delusion and despair, the only reaction left to non class conscious Americans is to turn on themselves. Murders and suicides are too often the reaction to financial disaster instead of righteous indignation directed towards a failed political and economic system. Americans are losing their minds when they might alleviate their depression by taking to the streets or at the very least giving their elected leaders a piece of their minds.

    Americans never had the tools to fully understand the system that is failing them so terribly. Now they are enthralled by a man who explicitly instructs them not to confront the people and institutions that have brought them to the brink. The economic meltdown will continue for a long time and so will the individual meltdowns and disasters for millions of people who will literally not know what hit them or where they ought to turn after the crash.

    Margaret Kimberley’s Freedom Rider column appears weekly in BAR. Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgandaReport.Com.

  15. Tennessee-Socialist said on February 5th, 2009 at 9:37pm #

    THE TRUTH ABOUT THE US ECOMOMIC HISTORY AND ITS FOUNDATION BY ALEXANDER HAMILTON AND OTHER OLIGARCHS

    US voters and citizens have no say and no votes on what the US government does. US citizens feel homeless, alienated, rejected and are not guilty at all for what the fascist US government has done to this world since late 1800s.

    You have to watch the documentary “Secret Mysteries of America’s beginnings” to learn the doubious beginings of USA and why and how it was founded. Remember that this country was founded by reavolutionary idealist liberators but as soon as it was founded, it turned into an Imperialist Power, because liberators of this country were betrayed and the US revolution was betrayed like Trotsky and the Bolsheviks where betrayed by the Mensheviks and by Stalin.

    9/11 & Bush are Distractions from a People’s Revolt from Below

    by S. Brian Willson
    April 21, 2007

    http://www.brianwillson.com/awol911.html

    A Bit Of History
    U.S.: “Empire of Liberty,” Built Upon Three Holocausts

    In the 1780s, Thomas Jefferson bragged of a new “empire of liberty,” i.e., a nation created essentially for the benefit of White male property and slave owners/speculators, who were to thrive in freedom, prosperity, and tranquility through expansion. Even before formal creation of the Republic, acquisition of Florida, Cuba, the West Indies, Mexico, the western frontier, and Canada were discussed so frequently there was an assumption that Providence intended it. George Washington talked in 1783 of “a rising empire.” James Madison believed in “imperial republicanism” as he led the 1787 Constitutional convention behind locked doors to create a new and far more powerful national government. Note that a people’s democracy was not intended by our “Founding Fathers” [See Tucker, Robert W. and David C. Hendrickson. (1990). Empire of Liberty: The Statecraft of Thomas Jefferson. Oxford: Oxford University Press; William Appleman Williams. (1980). Empire As A Way Of Life. Oxford, especially chapters 2-4, and pp. 31, 43, 51, 59].

    The ugliest truth is that our civilization is built on three unspeakable holocausts, each justified by a White racist ideology, causing the murder of millions, each committed with impunity: (1) acquiring free land at gunpoint while systematically brutalizing hundreds of Indigenous cultures; (2) acquiring free labor by force from ancient Indigenous cultures in Africa by violent removal of those who survived capture; and (3) acquiring cheap resources, labor and markets through thousands of overt and covert interventions at gunpoint into more than 100 countries.

    Four Blips in Modern Human History

    In addition to our three unspoken holocausts mentioned above, we have been deeply influenced by at least four major blips in history. First, the 5,500-year (nearly 300-generation) period of acceptance and deference to large vertical authority structures (whether monarchial, military, or elected) has led to a chronic pattern of mindless obedience (De La Boetie). Second, 500 years of Eurocentric colonialism materially benefited 20 percent of the world’s population as it impoverished and plundered the non-Eurocentric 80 percent. Third, in a much briefer blip, we have become conditioned to the conveniences of the industrial revolution/oil age (soon to be over). And fourth, an even briefer blip of the post-WW II middle class (now virtually depleted).

    Consequently, those of us living today among the rich 20 percent, even if personally not so rich, have profited from the wonders of “Western civilization.” We have been conditioned to live by its materialist values. But we have become addicted to a grotesque way of life, spending nearly $50 billion a year alone on cosmetics and toiletries (and nearly $80 billion each on tobacco and soft drinks, $15 billion on pet food). [SEE euromonitor.com/factfile].

    Materialism’s Pathologies
    Addictions

    It is instructive to examine the psychic dynamics of the U.S. “More is not enough!” [See psychiatrist Peter C. Whybrow’s, America Mania (2005), in which he discovers that the biochemical processes in the brain related to highs induced from shopping are similar with that of alcohol and drug use]. Our addictions suggest that substantial human archetypal needs are unmet in materialist, class-oriented societies. Psychologist Carl Jung concluded that Western materialist cultures lose connection with deeper meanings of life. Social epidemiologist Richard Wilkinson recently documented that individuals and whole societies have become severely stressed from social and economic inequality [The Impact of Inequality (2005)]. Class positioning, he concludes, is the most common cause of sickness and social malaise, and that inequality seriously obstructs sustainable economic activity and social health.

    The majority of European Americans grew up in the brief post-WWII middle class. All of us grew up in the 200-year blip of the oil age and the industrial revolution that facilitated the speed, complex technologies, and population explosions that accompany the religion of consumption. For the most part, if we were living in the middle or upper class, life seemed like a good deal. But it is becoming increasingly obvious that it has all been a delusion.

    Our “wonderful way of life” has always been dependent upon a massive system of both domestic and global exploitation beyond comprehension. This has been facilitated ad nauseum by our political/economic/military “democratic” system directed by one oligarchic party with two right wings, one of soft imperialism, the other hard. Believing ourselves to be exceptional, it has been nearly impossible to understand the consequences of our lifestyle on billions of other people and the Earth herself.

    Individual and Collective Complicity

    Nonetheless, most of us routinely legitimize the entire scam by voting for one of the usually White male oligarchs/plutarchs while dutifully paying the taxes demanded by their laws (which we foolishly call our laws). To add insult to injury, we allow ourselves or our sons and daughters, often with enthusiastic patriotism, to become loyal military troopers implementing the forceful global policies that allow us, who comprise but 4.6 percent of the world’s population, to continue consuming anywhere from 25 percent to nearly half the Earth’s resources.

    The social myth lingers that we live in a democratic society committed to “justice for all.” However, this mythology has pre-empted our capacity to SEE the ugly social secret that our system is in fact an oligarchy committed to exploitation of the many for the benefit of a few.

    In these early years of the third millennium, we are finally experiencing the convergence of several ominous political, economic and ecological realities serving as epochal wake-up calls — for example, global warming, peak oil, the 9/11 event, and Bush’s brazen, terrifying responses to 9/11. Perhaps these harsh realities are cosmic offerings sent to wake us from our “holiday from history,” as Slovenian psychoanalyst/philosopher Slavoj Zizek describes our severe amnesia. Zizek concludes that September 11, 2001 revealed to U.S. Americans the “desert of the real,” the distilled version of the essence of five centuries of behavior of the “civilized West.” The U.S. culture and our European predecessors have committed the equivalent of thousands of 9/11s over more than 400 years, directed primarily against non-Europeans, murdering and maiming millions to protect “national security” (read AWOL, the American Way Of Life). We have virtually no clue about the extent of our demonic behavior.

    Arrogance

    I myself did not have a clue to this tangle of lies, illusions, and delusions until I found myself in Vietnam’s Mekong Delta villages shortly after air strikes where I witnessed the napalmed and burned bodies of as many as 900 unarmed fishing villagers and their children over the course of just one week. This bombing was committed with malice aforethought, intended to systematically eliminate (murder by genocide) all Vietnamese who did not openly support the South Vietnamese Government, a corrupt bunch in turn created by our own corrupt, Mafioso-like government.

    Subsequently, I delved into details of “American” history. What we did in Southeast Asia from 1950-1975 turns out to be no aberration, just as Iraq and Afghanistan are not aberrations. From the moment our ancestors became “settlers” on this continent, the die was cast. Our savagery has known no limits. Whatever is perceived as being in our way is removed as we seek expansion, profits, and convenience via free land, cheap resources, slave labor, hegemonic power, and hateful vengeance.

    Assimilation or elimination

    Invariably we describe people who would obstruct our imperial goals with derogatory names like “savages”, “gooks”, “communists”, “evil people”, “terrorists”, etc. Read the history of how one’s hometown came to be settled. For example, the quaint little university town of Arcata, California, once known as Union(town), where in 1860 “little children and old women were mercilessly stabbed and their skulls crushed by axes,” their bodies being stacked in town. Or Geneva, New York where in 1779, George Washington’s orders were ruthlessly carried out to complete “its total destruction and devastation.” Consider today’s settlers in Israel/Palestine. Note how easily they justify inflicting barbaric behavior on others (projections outward) by describing their inferiority while believing in themselves as superior (disowned shadows). The spectacularly frightening nature of the 9/11 crimes is familiar to a majority of the world’s people. From 1965 to 1973, for example, a period of nearly 3,300 days, the United States waged an unspeakable war of atrocity, a de facto policy of genocide, against the peoples of Laos, Cambodia and Vietnam, such that more than 1,500 human beings were murdered every day! Read about the thousands of skirmishes the White militia and/or the U.S. Army engaged in against the Indigenous of this country over several hundred years. Over 10 million Indigenous in North America alone succumbed to removal, imprisonment, or death due to strange diseases, bullets and axes. Our ancestors often recorded vivid accounts that included gory details such as bashing the brains of “merciless Indian savages” (a phrase from the U.S. Declaration of Independence).

    From the 1790s to the early 2000s, the U.S. military overtly intervened more than 500 times in over 100 nations to pursue its hegemonic designs (and thousands of covert interventions). One military study revealed that between 1869 and 1897, the U.S. Navy made 5,980 port calls to further U.S. commercial and political advantages. Virtually all U.S. wars and interventions have been masked under elaborate rhetorical pretexts, such that we learned an extraordinarily censored version of history. The U.S. military and various police agencies have also intervened hundreds of thousands of times domestically.

    The pattern has been consistent: either people will assimilate into the White culture, or be eliminated by it. White supremacy is the cult and we have all been subjected to it — either in complicity with it, or to be crushed by it. Our origins intrinsically are possessed by shame of genocide through terror.

    Our Shadow
    Living with painful shame I believe has driven us to do nearly anything to avoid facing the disowned part of our collective and individual psyche. Disowned shadows possess explosive emotional energy, often manifesting in pathological distractions like avoidance, denial, invasions, addictions, etc., which push us to further regress, as if reverting from adolescence to early childhood.

    Facing the fraud of our mythological “exceptionalism” terrifies us. We project onto others the very “terrorism” that has built our civilization. Ironically, we have to project our own shadow, “terrorism,” onto others, such that we actually come to believe those “evil” others are terrorizing us at every moment. I believe that the political leaders we “choose” or accept, ironically represent our own unmet needs for security. Disowned shadows possess intense subconscious power over us, such that we tend to look to authority figures to rescue us. The capitalist predators and their oligarchic political protectors thrive on inducing fear to maintain an obedient, consuming populace.

    Our most imperative healing need is to reckon with our imperial history, our lifestyle addictions, and the consequences of both, and prepare for a leap in consciousness that will take us on a path of responsibility for the consequences of our choices. Focusing on the whos and hows of 9/11, and the evils of Bush, easily can become obsessions. However, I believe they serve as huge distractions from facing our collective shadow, the denial of which overwhelms us with its emotional charge. Our government’s deranged and extraordinarily dangerous response to 9/11 can be explained partially because the spectacular 9/11 act, like the shocking, humiliating slaughter of Col. George Armstrong Custer’s Seventh Cavalry at Little Bighorn one hundred twenty-five years earlier, pierced our self-delusion of omnipotence, requiring us to resort to historic acts of vengeance (distraction) to preserve the delusion. Note that after Custer’s fiasco, the nation was obsessed with completing the genocide of the Indigenous people (eliminating the “Indian problem”), which it accomplished with brute force in 15 years. The emotional energy of disowned shadows is enormous, and extremely lethal when not owned up to.

    As a people we are totally capable of busting out of our fear and insecurity and seeking solace in our community as we refuse to comply with the demands of the market. That means we stop shopping other than from local economies, reduce driving and flying to radically minimal levels, and instead, begin cycling, rebuilding local neighborhoods, striving for regional (100-mile?) food diets and zero net energy housing. It means understanding that the mechanical process of voting is the least significant act of participation in a vibrant decentralized democracy. It means recognizing that our system is broken, broken beyond repair. Our way of conducting political business and choosing “leaders” has failed. Political survival goes to the richest. This stalemate offers us humble human beings an incredible opportunity for a renewal from below. Now we have permission to consciously consider not voting in national political selection shams, and more certainly means not paying money (taxes) to our multi-headed Hydra “democracy” that insists on doing whatever it wants despite the expressed sentiments of the people. Thus, creative downsizing and simplifying (contraction) is indispensable to our liberation.

    Healing: Contraction, not Distraction
    I dream that those responsible for the 9/11 crimes will someday be held to account, and that Bush and company (and all the elected politicians who support a war OF terror, preventive wars, warrantless wiretapping, elimination of Habeas Corpus, torture, etc.) will face Nuremberg trials. Impeachment is an insufficient response, and assumes that the political system itself is authentically accountable. But the distractions, even obsessions, about 9/11 and ridding ourselves of Bush conveniently allow us to avoid addressing directly our disowned, dark cultural shadow: historical complicity with empire through obedience, silence, and consumerism. Our one-party centralized system, disguised as a “Constitutional democracy,” thrives on continued plunder which is legitimized by and with our votes and tax dollars!

    Facing our addicton to AWOL is a precondition to healing. Taking responsibility suggests radically altering our lifestyles toward right livelihood and sustainability. This requires dramatic contraction. “Slow, simple, small, quiet, and local” (the motto of the 2006 Veterans (Human-Powered) Ride For Peace and Sustainability from Eugene, Oregon to the national Veterans For Peace convention in Seattle, Washington) offers a bold antidote to the impending austerity, likely die-offs, and almost inevitable collapse of every system we are dependent upon. Breaking addictions to mindless consumption and rapid travel are revolutionary acts. Aligning our actual day-to-day choices with our values and rhetoric enables survival with dignity. Once we know deeply within ourselves that every choice has a consequence (the Iroquois Seventh Generation discernment principle), our choices will change dramatically, a leap in consciousness begging to happen.

    Our body-minds already know at very deep levels that everything is interconnected in a sacred weave, everywhere at every moment. We just need to access that wisdom. Quantum physics confirms Martin Luther King Jr.’s wisdom, “an injustice anywhere is a threat to justice everywhere.” Right here, right now, where I am standing — very local! The only sustainable social model in evolutionary history has been the local, steady state economy, what visionaries now call bioregionalism, comprised of hundreds if not thousands of sustainable local communities. This is the modern synthesis of the Neolithic, Stone Age village with appropriate technology, utilizing iron, bicycles, solar energy and a partnership model.

    SOME MORE UGLY TRUTHS ABOUT THE FOUNDATION AND INVENTION OF USA.

    EMPIRE OF LIBERTY: THE STATECRAFT OF THOMAS JEFFERSON – Tucker, Robert W. and David C. Hendrickson. (1990).

    http://www.amazon.com/Empire-Liberty-Statecraft-Thomas-Jefferson/dp/0195074831

    Book-Review

    By Dustin Eric Buehler (Oregon, USA) – See all my reviews

    By examining United States foreign policy between 1783 and 1809 in their book “Empire of Liberty,” Robert W. Tucker and David C. Hendrickson put the myth of Thomas Jefferson under fire. Tucker and Hendrickson’s central thesis is that Jefferson’s statecraft wavered between two contradictory principles of liberty and empire. While president, Jefferson often found himself torn between pursuing a foreign policy role that provided examples of liberty, and a role as an “active crusader in international affairs” (Chaudhuri, American Political Science Review, September 1991). Tucker and Hendrickson claim that Jefferson tried in vain to accomplish both of these conflicting goals. The aim of his “new diplomacy” was to pursue the traditional ends of security and prestige while renouncing the traditional means of entangling alliances and wars that had been constantly used by European powers in the past (Mayer, Washington Post, August 2, 1990).

    Instead, Jefferson would rely upon what he called “peaceable coercion”–a foreign policy establishing security by commercial arrangements, through the force of American ideals. Jefferson believed that liberty and empire could go hand in hand in the formation of United States foreign policy.
    Tucker and Hendrickson analyze several policies during the Jefferson administration to give historiographical context to their argument. The 1803 Louisiana Purchase is mentioned as a case in point. On the surface, the acquisition of almost half a continent at a negligible price was a great triumph of statecraft.

    Jefferson believed that this incredible land acquisition “preserved the republican character of the Union by removing the presence of dangerous neighbors and the prospect of wars that must result in the imposition of unbearable burdens on society” (Dallek, New York Times, July 1, 1990). It also insured that a predominantly agricultural political economy would be sustained while the United States experienced a steady increase in population. The Louisiana Purchase appeared to be clearly within the interests of the United States.
    However, Tucker and Hendrickson point out that in order to make this purchase, Jefferson abandoned several of his sacred principles of liberty. In acquiring Louisiana, Jefferson abandoned his deeply held commitment to strict construction of the Constitution, which did not specifically mention a power to acquire territory (Dallek 1990). Tucker and Hendrickson question this abandonment of principle in light of the circumstances revolving around the purchase. They point out that Napoleon would most likely have not repudiated the agreement if action had been delayed, and that the speedy ratification of the treaty that Jefferson advocated was not necessary (Cunningham, Journal of the Early Republic, September 1991). Like Henry Adams, whose history of Jefferson’s administration the authors admire and frequently draw upon, Tucker and Hendrickson emphasize the president’s abandonment of strict construction in regard to the Louisiana Purchase as evidence of his desire to establish an empire.

    This book has many notable strengths. Tucker and Hendrickson advance their ideas with a portrayal of Jefferson’s statecraft that is very comprehensive. Most of the main foreign policy circumstances and events of the Jefferson era are described in detail–in addition to the Louisiana Purchase and policies regarding Native Americans, the authors provide comprehensive analysis on the maritime crisis with Great Britain, and Jefferson’s views on Napoleon. Tucker and Hendrickson give a freshness to historical subjects of the Jeffersonian era that have already been mulled over by countless historians.
    Along with its strengths, a couple weaknesses exist in “Empire of Liberty.” Occasionally the authors press their points too hard. Although Jefferson somewhat abandoned his embrace of free trade in 1807, Tucker and Hendrickson exaggerate his original devotion to the principle. Additionally, labeling him as a “true believer in strict constructionism” until the Louisiana Purchase ignores his acceptance of Hamiltonian policies from the inception of his administration (Kaplan, Journal of American History, June 1991). Tucker and Hendrickson’s critique of Jefferson’s foreign policy is perhaps somewhat overbearing.

    Regardless of any shortcomings Tucker and Hendrickson’s analysis may have, they do an exceptional job of making a definite contribution to Jeffersonian literature. They create a picture of Jefferson somewhat different than the image conveyed by such historians as Gilbert Chinard, Merrill Peterson and Dumas Malone. “Empire of Liberty” tends to lean more towards to so-called “darker side” of Jefferson represented by the work of Leonard Levy. Overall, by provoking thoughts on Jeffersonian foreign policy, Tucker and Hendrickson’s work contributes monumentally to the discourse on the life of Thomas Jefferson.

    i think that it is safe to state that USA was founded by fascist bourgeoise capitalist, business-men (Jefferson, Washington, Benjamin Franklin) and they had a goal of creating an oligarchic-republic with some little crumbles, checks and balances for the masses. They did not intent to create a real people’s democracy for the people by the people in favor of the people, but a sort of type of humanized oligarchic capitalist plutocracy where the wealthy bourgeoise elites would be checked out and controlled by the US Constitution, but still they didn’t create a real humanist democratic republic, just an oligarchic republic like USA has been all the time.

    But i don’t think that we can blame the US liberators, because you have to apply historical-materialism and evolution and in the 1700s the socialist equality ideas where not so developed as today.

    So I think that Jefferson, Lincoln, Madison etc, were not evil like today’s leaders like Clinton, Bush and Cheney.

    hahaha sorry to compare the dirty drug-smugglers of Clinton, Cheney and Bush with US founding fathers. it is a disrespect to their honor and dignity to compare US founders with mafia-thugs like Clinton, Bush and Obama.

    .

    HERE IS MORE INFO ABOUT THE TRUTH OF CAPITALISM. CAPITALISM WAS REALLY AN IDEOLOGY INVENTED BY ADAM SMITH, DAVID RICARDO AND OTHER ECONOMISTS WITH THE GOAL OF INCREASING THE WEALTH OF A FEW OLIGARCHS AND FACTORY OWNERS USING WORKERS AS SLAVES.

    That’s why most americans are poor, in pain, suffering and enslaved, because USA has a capitalist system of pleasures for a few, and pain for the majority.

    So dont trust anti-marxist writters who claim that Marx, Lenin and Chavez are “dictators”. Remember that capitalists “freedom” means zero-government regulation so that business owners could make lots of money in a zero-government regulated system.

    The invention of Capitalism

    http://www.amazon.com/exec/obidos/ASIN/0822324911/critiquesofliber

    Review
    “This study is to be admired for its comprehensiveness, scope, and the amount of unearthing and excavation Perelman provides The indictment of political economists who addressed themselves to the matter of primitive accumulation is masterful.”–H. T. Wilson, York University

    Product Description
    The originators of classical political economy—Adam Smith, David Ricardo, James Steuart, and others—created a discourse that explained the logic, the origin, and, in many respects, the essential rightness of capitalism. But, in the great texts of that discourse, these writers downplayed a crucial requirement for capitalism’s creation: For it to succeed, peasants would have to abandon their self-sufficient lifestyle and go to work for wages in a factory. Why would they willingly do this?

    Clearly, they did not go willingly. As Michael Perelman shows, they were forced into the factories with the active support of the same economists who were making theoretical claims for capitalism as a self-correcting mechanism that thrived without needing government intervention. Directly contradicting the laissez-faire principles they claimed to espouse, these men advocated government policies that deprived the peasantry of the means for self-provision in order to coerce these small farmers into wage labor. To show how Adam Smith and the other classical economists appear to have deliberately obscured the nature of the control of labor and how policies attacking the economic independence of the rural peasantry were essentially conceived to foster primitive accumulation, Perelman examines diaries, letters, and the more practical writings of the classical economists. He argues that these private and practical writings reveal the real intentions and goals of classical political economy—to separate a rural peasantry from their access to land.

    This rereading of the history of classical political economy sheds important light on the rise of capitalism to its present state of world dominance. Historians of political economy and Marxist thought will find that this book broadens their understanding of how capitalism took hold in the industrial age.

    Book-review.
    By Dr. Regino Diaz-Robainas (Stuart, FL USA) – See all my reviews

    An impressive study of the significance of Primitive Accumulation in the development of the refined and reified slavery that we call Capitalism. Through Primitive Accumulation, in its pure, somewhat abstract “original sin” form, the ancestors of those who today control the wealth and power in the world robbed- by violence and brute coercion- the means of autonomous livelihood from the majority of peoples.

    It was the brutal process of “separating people from the means of providing for themselves” to turn them into instruments of production for profits, as in factories. This process evolved into more habitual and masked “market relations” to institutionalize and render more permanent the status of workers as wage quasi-slaves. In contrast to Adam Smith, Jeremy Bentham and other apologists and defenders of the system.

    Marx described this process with historical concreteness describing such historical events as the English Enclosure and Game laws. The conventional view has been that primitive accumulation was substituted by subtle and less exploitative reified market relations. But, as Perelman explains with resolute clarity,the two aspects of Capitalism are dialectically and continuously interlocked.

    After all, between Bentham’s struggle to subdue the poor into military work prisons with lives rigidly controlled in the service of the Masters’ profits- shades of Auschwitz- and Greenspan’s concerns (!) about the “wealth effect” reducing the willingness of workers with some minimal invested savings to get back to the “labor force” for “flexible” wages and the new regulator of “markets” concern for “unacceptably low levels of unemployment”- is there, really, that much difference ? The brutal process continues with such slogans as “buy when there’s blood in the streets”, and Michael Perelman has done a great service in describing it.

  16. Tennessee-Socialist said on February 5th, 2009 at 9:41pm #

    it is sad that this nation which was an economic powerful nation, has been destroyed by the corrupted plutocratic Democrat and Republican Parties, along with the different corporate lobbies, with the zionist lobby, and with the capitalist philosophy which has been a great traditional ideology in the essense of America. The Free Market egocentric, selfish ideology of Ayn Rand, Adam Smith, John Locke, John Stuart Mill and other egoists. We must burry that ideology as failed and wrong and give way toward Leninist, Marxist, Christian, humanist and socialist, collective ideology and doctrine.

    USA was a very developed nation producing a lot of wealth, and statibility for most US citizens compared to third world nations which have less rational, orderly, and scientific political and economic systems.

    USA has never been a socialist nation, however the capitalist-welfare american system provided stability for most americans thru the a “trickle down capitalist welfare system”.

    Unfortunately, thanks to the mafia-cartels of both capitalist parties (Democrats and Republicans)this ‘trickle down welfare capitalist system’ which has provided stability, food, cars, pleasures, toys and wealth for majority of americans is coming to an end ending !!

    Sooner or later this ‘tricke down welfare capitalist system’ will not provide bread for all, and will morph a plutocratic corporate capitalist system that can only provide stability, food and wealth for the upper bourgeoise classes of America.

    when that time comes we will see a revolutionary situation, when the proletariat take the bull by its horns and overthrows the corporate corrupted capitalist system for complete emancipation of the workign classes of this country

    HERE ARE THE MAIN 3 TRAITS OF A REVOLUTIONARY SITUATION IN USA:

    # 1 – When it is impossible for the rich people of this country (like Bill Gates, Jennifer Lopez, Tom Cruise, Donald Trump, Al Gore, Ross Perot, Dick Cheney, etc.) to maintain their wealth without any change; when there is an economic crisis, in one form or another, among the rich people, a crisis in the policy of the rich ruling class, leading to a fissure through which the discontent and indignation of middle and lower classes of America burst forth. For a socialist-revolution to take place, it is usually insufficient for the middle and lower classes not to want to live in their old comfortable and stable way; it is also necessary that the rich upper millionaire class should be unable to live in their old comfortable way.

    # 2 – When the suffering and the needs of the middle and lower working classes of this country have grown more acute than usual

    # 3 – When, as a consequence of the above causes, there is a considerable increase in the activity of the middle and working classes, who uncomplainingly allow themselves to be robbed in peace time, but, in turbulent times, are drawn both by all the circumstances of the crisis *and by the upper classes themselves* into independent historical action.

    READ SOME OF MY PERSONAL THOUGHTS ON HOW TO SAVE UNITED STATES FROM SINKING LIKE THE TITANIC:

    What USA needs is a gradual change toward a participative-democratic socialist system of the XXI Century, thru a Constitutional Reform by a Constitutional Assembly like many modern nations today are reforming their own political and economic systems in order to change this country from a corporate-kleptocratic plutocracy of the few into a participative-democratic social economic democracy for all americans, not for the few millionaires and billionaires.

    A Political Reform would not be complete without a democratic economic reform, so that USA could move from a corporate-capitalist country toward a real democratic workers socialist economy by the workers in favor of workers who are the creators of wealth like Karl Marx said.

    The wealth of this great land belongs to all US citizens and specially *workers* who are the creators of wealth, but they won’t be able to claim that wealth without a nationalization program under state and workers-control of the key elements of US industries like oil, water, communication, electricity, gold, mines, etc.

    Americans also need access to subsidized or free Universities and Colleges, this country needs more public socialist education instead of private education. It would also be a great idea for US government to regulate right-wing stations like CNN and FOX and also to create a state-owned progressive TV station with progressive media people like Amy Goodman and Juan Gonzalez, in order to spread the ideology of the US founding fathers, to teach americans democratic egalitarian values, so that thru a good education programs americans truely be free individuals and architects of of our own destiny and wealth. On the international level it is worth studying the closing of most US military bases, the incorporation of USA in the ALBA (Bolivarian Alternative of the Americas), and it would be a great idea to consider Jimmy Carter as peace missioner on the Israeli-Palestine conflict.

    .

    Let others know about People’s Revolution! Spread the word… the more who know the truth, the greater the force against the capitalist system! Resistance forever!

    …………………../´¯/)
    ………………..,/¯../
    ………………./…./
    …………./´¯/’…’/´¯¯`·¸
    ………./’/…/…./……./¨¯\
    ……..(‘(…´…´…. ¯~/’…’)
    ………\……………..’…../
    ……….”…\………. _.·´
    …………\…………..

    STICK UP YOUR MIDDLE FINGER TO US IMPERIALISM AND CAPITALIST OPPRESSION!

  17. Michael Collins said on February 5th, 2009 at 10:47pm #

    joed: Truth is liberating. The truth is that there is no financial system left. The idea of a national cramdown is to park the debt with the banks and then have them nationalized. With the U.S. Government negotiating the acquisition, then there would be a cramdown for all this silent investors in the Ponzi scheme. That presumes we get a U.S. Government with brains and a degree of cleverness. Somebody has to set it up so the whole system collapses without the ritual suffering that many seem to believe is required. It is not. Superstition is out, science is in;)

    Max: I agree with your assessment of Geithner and Summers. Their only use would be as the appointed muscle to make their former peers get in line.

    Here’s what I said about them in another article: “Previous Obama cabinet picks emphasized the absence of clear ideology while paying lip service to qualifications. For example, Timothy Geithner, the Secretary of Treasury pick, and Larry Summers, named to head the National Economic Council, both seem to have impressive resumes in banking and finance. Obama insiders made what appears to be a safe bet that the public wouldn’t notice that both were up to their necks in the recent economic crash and tens of billions in Wall Street welfare.” http://www.scoop.co.nz/stories/HL0901/S00099.htm

    It doesn’t matter who does the deed, it just has to get done. These guys are conniving enough to know the weak points of the banks that would be across the table. They’d do as they were told or someone else would do it.

    Catherine: “Milione ringraziamenti” for your very kind comment about my metaphor. The military can fantasize but they live by the old paradigm and there’s no money for their fantasy. The corporations would take it right where it belongs – in their treasury, particularly the banks and those individuals who invested so much in thee silly real estate schemes. There’s a bigger crisis coming our way called credit derivatives, 40-50 times the size of the subprime derivative crisis. The whole game is up. The good news is that the nation is filled with bright people, people who are willing to work collaboratively to restructure the way we do things. It will be interesting or it will fail (in which case we’re all doomed;)

    Deadbeat: I agree with Kaptur. You’re right; I didn’t mention child support payments since the article wasn’t about that.

    Max: Obama wouldn’t do this on principle, he’d do it under serious pressure. The idea is already out there, it’s just inadequately proposed. Congress wants bankruptcy judges to have this option, cramdowns. They act like we don’t know who the judges are and who appointed them..

    This idea is only feasible if Obama thinks that his survival as a popular leader is at stake. That’s his goal, to govern with popular support. He’d toss the Geithner’s and the Summers’ of the world under the bus if he had to. He’s got an intellect superior to most of the establishment types so he might pull it off.

    Mass action should, imho, be directed at getting these people out of their fantasy world and making real changes. That’s the only way things have changed here.

  18. Kishore Kumar said on February 5th, 2009 at 11:49pm #

    “Cramdowns” make perfect sense and should become the standard procedure instead of foreclosures.

    It appears that lenders, while giving loans in an inflated real-estate market, forgot that the risk related to the market value of the house is always borne by the lender, because if the market value goes below the loan amount, the homeowner can always walk out.

    If a lenders foreclose, they can barely get the current market value minus costs of sale. Instead, reducing the loan amount to the current market value creates a win-win situation.

  19. arjay said on February 6th, 2009 at 8:09am #

    all of these “solutions” try to correct symptoms of the problem. the source is simple – the federal reserve system. without it NONE of the problems we’re facing would ever have occurred.

    cramdown – is just another word for bailout for the over indebted; people who never should have gotten the loan in the first place.

    dont ever forget that geithner was president of the ny fed and obamas massive campaign funding came primarily from the money center banks – the very same people who created this mess in the first place. if you think that he is going to do anything to upset them, you are truly naive.

  20. Tennessee-Socialist said on February 6th, 2009 at 2:57pm #

    Michael Collins: hi, how are you? All the things that we are saying here in this blogger, and forum site, however the real world out there in USA is a lot harder than theory. I mean i don’t really see a light at the end of the tunnel. Because i think that the only ones who could do a fundamental change in USA would be a non-mainstream, alternative political candidate and alternative political party like Ralph Nader, Ron Paul, Cynthia Mckinney, Dennis Kucinich or some social-democrats, reformists, like that. I don’t think that there can be any change coming from the corporate Democrats and Republican Party. So we are doomed.

    .

  21. Michael Collins said on February 6th, 2009 at 6:57pm #

    arjay, I agree with you on Geithner and Summers. They’re really dreadful choices at a time when intellectual honesty, at the very least, is required, not to mention a positive track record; neither of which are possessed by those two. Here’s my scenario. Obama want’s to be president, that’s his ideology. When enough people are evicted then the real pressure starts. It’s arisen before, namely with the defeat of the first bailout in the House. But when enough people think they might be on the street, that’s when political pressure will be come huge. If he responds with something that’s universal and that breaks the mold, he stays in power. If not, he’s just another gatekeeper and wanders off to obscurity. There needs to be a full recognition that there is no financial system or economy left, it’s over. In the mean time, my modest proposal, just one of many actions necessary, would keep people off the streets. Geithner and Summers are in place, so why not use them. I’d never have pickedk them nor would I ever endorse them in their jobs.

    You said, “cramdown – is just another word for bailout for the over indebted; people who never should have gotten the loan in the first place.” Not necessarily but it doesn’t matter. The objective, imho, is to keep people in shelter and able to feed themselves. The banks have the ultimate responsibility for issuing the loans. They’re finished anyway. There are some elaborations of this at the link to the thread in the acknowledgment at the end of the article.

    Brother Tennessee-Socialist, you are right as rain. The mold is broken, time to have a reality based economy, which would be quite decent for us and the rest of the world. None of those alternative candidates get their views aired. However, I can recall when people accepted our lousy elections as fair instead of the rigged farce that they are. Four years after that consciousness raising process started on the internet, polls show that majorities of people lack fundamental faith in the election process.

    The change can come quickly on these economic issues given the more immediate impact on folks. The idea of generating this suffering to pay an imaginary debt is totally unacceptable. I’m hoping for a robust dialog on the various alternatives. There’s work to do and dealing with the deviants who created this mess should be accomplished as soon as possible.

    We need the mind set of an engineer, the accumulation of wonderful science out there, and the fighting spirit of the “Overmountain people.”

    http://discuss.epluribusmedia.net/node/3375

  22. Tennessee-Socialist said on February 6th, 2009 at 9:33pm #

    Michael Collins: Thanx for your good words !! And indeed, USA has lots of science, universities, colleges, and mental-energies. But i think that the objective conditions for a revolution like Vladimir Lenin wrote about are not here in USA yet. However the objective conditions for a social-revolution are real close, like you just said because there is no money and economy left.

    The road toward democratic-socialism of the XXI Century will be a bumpy one though, so fasten your seat belts 🙂

    And indeed, the US left and progressives and even non-leftist people in USA need to unite into a single United Front a United Revolutionary Jeffersonian Workers Democratic Socialist Party as a real electoral alternative for the corporate evil parties of Democrats-Republicans corrupt mafia cartel.

    thanks again for your cool words

    .

  23. Tennessee-Socialist said on February 6th, 2009 at 9:57pm #

    The USA progressive masses, should learn from the Venezuelan Chavistas and socialists who are trying to deffend 10 years of Democratic-Revolution in Venezuela (The Most democratic nation of this world). The US left should also support the Venezuelan Revolution. Remember folks that the real enemy of the American opressed Masses is not The Democrats or Republicans, but the “International Corporate elites” like Alex Jones says, and our allies should be the workers, peasants and leftists from all countries.

    Venezuela: Vote YES in the referendum on the constitutional amendment and move on to complete the revolution!

    By Alan Woods

    http://www.marxist.com/index2.php?option=com_content&task=view&id=7071&pop=1&page=0&Itemid=730

    Friday, 06 February 2009
    On February 15th an important referendum will take place in Venezuela. The central question is the removal of the limit on the number of times the president can be elected.
    Hypocrisy of the bourgeoisie and Imperialism
    The constitutional amendment has been presented by the bourgeoisie as a dictatorial move whereby Chavez is aiming to install himself as President for life. This is complete nonsense and corresponds to the propaganda campaign of lies and misrepresentations that the western media has conducted against the Bolivarian Revolution from the very beginning.

    The mass of urban poor, youth and workers have moved time and again to save the revolution and defend its gains. However, after ten years of ceaseless struggle, the revolution has still not been completed. Photo by Immigrante a media on Flickr. Reactionaries and imperialists have raised a hue and cry: “Chavez is authoritarian.” This is pure hypocrisy. In France, Spain, Britain, there are none of these limits. What is being proposed in this referendum is not that Chavez be President for life, or even for a moment longer than his present mandate expires. What is being proposed is that the people of Venezuela should have the right to vote for Chavez at the next election. The people ought to have the right to vote for whatever candidate they choose. This is a basic democratic right, which we defend. Moreover, this rule would also apply to local mayors and regional governors.

    In a democracy the people should have the right to choose a president of their choice. In some western countries that like to think of themselves as democracies, the head of state is never elected. That is the case in Spain, where king Juan Carlos has never been elected by anyone, but was nominated by the dictator Franco. Yet this unelected Bourbon thinks he has the right to tell the President of Venezuela, who has been repeatedly re-elected by big majorities to “shut up”.

    What sort of democracy is it where the head of state is decided not in an election but through an accident of birth? Yet this remains the case in Britain, Belgium and other countries that claim to be democratic. In Britain and other countries there is also no limitation on the number of times a prime minister can stand for election. This fact is non-controversial and nobody even mentions it. But when it comes to Venezuela other standards are applied. Why? The answer is clear: They don’t want Chavez to stand again because they fear he will win.

    A crucial moment
    This referendum is taking place at a crucial moment of the Venezuelan revolution. After ten years of revolution the contradictions are sharper than ever before. The mass of urban poor, youth and workers have moved time and again to save the revolution and defend its gains. On several occasions their mobilizations have prevented open counter-revolution (the coup d’etat of April 2002, the bosses’ lockout of December 2002, etc.).

    However, after ten years of ceaseless struggle, the revolution has still not been completed. The bulk of industry, land and the banks remain in private hands. The counter-revolution is waging a ferocious struggle to undermine the economy, organizing a deliberate sabotage that is causing scarcities of particular foods and giving an additional twist to the spiral of inflation. They are organizing a strike of capital that results in stoppages of production in factories throughout the country.

    Although the revolution has made significant gains, it is still not irreversible. The first serious warning came in December 2007 with the defeat in the constitutional reform referendum. In November 2008 the revolution lost important Mayorships to the opposition. Although the PSUV [Chávez’s Socialist Party] received 58% of the vote, there were high levels of abstention in traditional Chavista strongholds. That was why strategic areas such as Miranda and the Mayor of Caracas were lost.

    The first serious warning came in December 2007 with the defeat in the constitutional reform referendum. The blue areas represent the densly populated areas where ‘no’ won.
    The masses want action. They defend the achievements conquered by the revolution, but they are growing weary of speeches and empty talk about Socialism, with no fundamental change in society in sight. The masses demand a solution to inflation, food scarcity, bad housing and corruption. They are tired of the slow pace of events and are pushing with all their might for an immediate change. They are beginning to understand that a “revolution within the revolution” is necessary – not just in words, but also in deeds.

    The Venezuelan revolution is clearly at the crossroads. Either it goes ahead with the task of expropriating the economic power of the capitalists, the landlords and the bankers or sooner or later it will end in a defeat. It is in this context that we must see the new referendum on the constitutional amendment.

    A class point of view
    There are some intellectuals and even supposedly “left-wing” organizations that will remain silent on this referendum. Or they will try argue against the referendum, on the grounds that it shows “disrespect for the past decisions”, or that it is “against the democratic traditions of the country” and so on. These self-styled “Lefts” and “democrats” are reflecting the pressure of bourgeois “public opinion”. They see everything in legalistic terms, pointing to this or that detail as a supposedly “democratic problem.”

    We answered these people in advance. In December 2007, in an article that explained the referendum defeat, we wrote:

    ”The reformists believe that the working class must always observe the legal niceties. But long ago Cicero said: Salus populi suprema est lex (“The good of the People is the Supreme Law”. We might add: the Good of the Revolution is the Supreme Law. The counter-revolutionaries showed absolutely no respect for the law or the Constitution in 2002 and if they had succeeded they would have abolished the 1999 Constitution immediately. Yet now they are all shouting about the defence of that very same Constitution. ”.

    This is not just a question of formal democracy. For the workers and the poor people of Venezuela the election of Chavez meant the social reforms and gains of the last few years an environment of revolution in which trade union organisation has flourished and the ordinary people who were excluded from political life, have found a voice and a goal. This is why they want to re-elect Chavez.

    The masses are very practical people. They will say; “If we lose the presidency, the right wing will smash all the social projects and the other conquests of the revolution”. These concerns are well grounded. When the Governorship of Miranda was lost in November last year, the first thing Radonski, the new opposition governor, did was to attack the misiones and let fascist gangs run amok, threatening Cuban doctors working in the Barrio Adentro projects. This reveals the ugly face of the counter-revolution. It is also a warning of what we can expect, should the counter-revolution get its hands on the presidency.

    The masses will fight to win this referendum. It is a very concrete question. They understand very well that Chávez is the only candidate that can beat the right wing in new presidential elections. Thus they see the referendum as a direct struggle between revolution and counter-revolution. The counterrevolutionaries see it in exactly the same light. Only hopeless petty bourgeois and blind sectarians can fail to understand this.

    The socialist revolution, like the wars between nations, consists of a series of battles and partial struggles. Only by fighting and winning such battles can the workers and peasants acquire confidence in their own strength and thus proceed to greater battles. Marxists will therefore stand with the workers and peasants and against the oligarchy, imperialism and the counterrevolutionaries and will campaign for a YES vote.

    The question of the state
    Recently, an attack on the occupation of the Mitsubishi factory by the Anzoategui regional police took place, resulting in the death of three workers. It was later revealed that this crime was committed by corrupt and reactionary elements in the police. They were subsequently suspended and arrested by the Bolivarian governor, Tarek Saab. But this is not an isolated case. Other cases of infiltration in the Venezuelan police forces have also been exposed in the last period, as when eight unarmed youths were recently killed in Mérida by counterrevolutionary elements within the police.

    Workers occupied INVEVAL, the valve making factory in Carrizal, State of Miranda, and through their long struggle for nationalisation and workers control they proved the possibility to realise Lenin’s four principles. The Marxists have been warning for years that it is impossible to use the old bourgeois state apparatus to serve revolutionary purposes. The latest events are an irrefutable proof of this! It is absolutely necessary to smash this rotten state apparatus inherited from the notorious Fourth Republic. Partial measures such as the purging of this or that institution cannot solve the problem in the long run. But we must replace it with something else. What do we put in place of the old rotten and corrupt bourgeois state?

    The answer was given long ago in Lenin’s “State and revolution”. He outlined a model based on the following principles:

    Free and democratic elections of all state functionaries with right of recall.
    No official to receive a wage higher than that of a skilled worker.
    No standing army or police but the armed people.
    Gradually, all the tasks of administration should be done by everyone in turn: when everyone is a bureaucrat in turn, nobody is a bureaucrat.
    It is entirely possible to put this into practice in Venezuela. We have already seen how elements of this kind of organization were present in the struggle against the counter-revolution. In 2004 we had the UBE’s (Electoral Battle Units) and later on with the Commando Maisanta, bodies elected directly by the rank and file from below, with the possibility or re-calling the elected representatives should they betray the struggle.

    Another excellent example is the factory INVEVAL in Carrizal, State of Miranda, where the workers occupied the plant and through a long struggle achieved its nationalization. Now the president of the factory is a worker, elected by his workmates and who receives the same wage as the other workers in the factory. The workers at INVEVAL have also shown that Lenin’s third point (about the arming of the people) is entirely possible. They have organized their own battalion of the National Reserve, thus showing in practice that the armingof the working class is completely possible.

    Vote YES and move on to complete the revolution!
    We must face facts and speak the truth: the murder of workers in Mitsubishi shows that the fundamental problems have not yet been solved. The revolution still has mass support (in the last elections the Chavistas won 5.5 million votes and 17 out of the 23 governors), but it has lost ground. Why? Because the masses are losing patience. The last two electoral contests (December 2007 and November 2008) have been serious warnings. The reformists in the Bolivarian Movement say that these defeats were because the Revolution has gone too far, too fast. The Marxists of the CMR say: On the contrary, it is because the Revolution has gone too slowly and has not gone far enough!

    We must win the referendum in order to inflict a new defeat on the counterrevolutionaries and press on to the fundamental tasks of the socialist revolution. There have been too many elections, referendums, too many speeches, too much talk about revolution and socialism, while the fundamental task of expropriating the oligarchy has not been carried out. There have been reforms but the most pressing problems of the masses remain unsolved. These problems will be exacerbated by the world economic crisis. The fall in oil prices will have a serious effect on Venezuela. The Venezuelan capitalists are organizing an investment strike in order to destabilise the situation. This shows the failure of the reformists’ attempt to build a “mixed economy” on the basis of “oil socialism”. Half measures will not solve the problems but only exacerbate the crisis.

    Comrades! The February referendum is another battle in the revolutionary war. We must win this battle in order to inflict a new defeat on the counterrevolutionaries and press on to the fundamental tasks of the socialist revolution. What is needed is to carry the revolution through to the end, expropriate the oligarchy, overthrow the bourgeois state and appeal to the workers and peasants of America and the whole world to join us in the socialist transformation of society.

    For these reasons we say to the working people of Venezuela:

    Vote YES in the referendum on February 15!

    Step up the fight for socialist revolution!

    Nationalize the land, banks and industry under workers’ control!

    Join the Corriente Marxista Revolucionaria, the Marxist tendency in the PSUV, and struggle for this programme!

    Long live the Socialist Revolution!