Tricky Banking Socialism for the Rich

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By Jay Janson (about the author) Page 2 of 2 page(s)

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"Government steps in again, bails out AIG with $85B ... with an $85 billion injection of taxpayer money...In the most far-reaching intervention into the private sector ever for the Federal Reserve...not just another bailout...a stunning government takeover."

"The government's move was similar to its bailout of Sept. 7 of mortgage giants Fannie Mae and Freddie Mac, where the Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies if needed to keep them from going broke."

Former Supreme Court Chief Justice William O. Douglas once quipped,

"Our upside down welfare state is 'socialism for the rich, free enterprise for the poor.' The great welfare scandal of the age concerns the dole we give rich people."

Right now the world must be seeing Americans as the most gullible citizenry on earth kowtowing to its undemocratic, unethical, greedy, government controlling rich and powerful.

In lieu of honest economics journalism today, we can study American's most famous economist Thorstein Veblen, who wrote a century ago:

"The fabric of credit and capitalization is essentially a fabric of concerted make-believe resting on the routine credulity of the business community at large."

"To the community at large the work of pecuniary management, it appears, is less serviceable the more there is of it."

"The leisure class is not an indolent class; it is a class of property owners or, more generally, a class with claims on the production of others."

For Veblen, at the apex of the leisure class is the ruling class. It is the class
that runs the show; that consumes without producing, that sets society's standards; and that accomplishes all this and more by some combination of ''force or fraud."

Veblen was deeply affected by a sense of ubiquitous social injustice. Veblen saw the modern business leader as essentially a latter-day predatory warrior-transformed, armed, and clothed in a fashion that enables him to dominate modern society:

"The relation of the leisure class to the economic process is a pecuniary relation- a relation of acquisition, not of production, of exploitation, not of serviceability.

Their office is of a parasitic character, and their interest is to divert what substance they may to their own use, and to retain whatever is under their hand. The conventions of the business world have grown up under the selective surveillance of this principle of predation or parasitism. They are conventions of ownership; derivatives, more or less remote, of the ancient predatory culture."

Serviceability. By this term, Veblen meant the ongoing ability of an economy to produce goods and services required for the health of the evolving community.

Veblen noted that, whatever businessmen might say, they did not live by such a system of atomistic individualism. Each year of technological advance brought with it a further "concatenation of industrial processes," and increasing interdependence between and among the separate branches and sectors of the economy.

By the 1880's the "captain of industry" had already begun to give way to the "captain of finance", the proprietorship to the corporation."

For Veblen, Keynes and Marx, profits showed a tendency toward zero in the long run as the supply of capital, i.e., of productive capacity, increased. Again, for all three, this would be true only in the absence of compensating factors making for contrived or natural scarcities of goods - e.g., wars, technological revolution, geographic expansion, monopolistic restriction of production.

"The current situation in America [1922] is by way of being something of a psychiatrical clinic...Perhaps the commonest and plainest evidence of ... unbalanced mentality is to be seen in a certain fearsome and feverish credulity with which a large proportion of Americans are affected.... There is a visible lack of composure and logical coherence, both in what they will believe and in what they are ready to do about it."

Veblen assumed depression to be the normal condition in a business-enterprise economy, to be relieved in periods of excitation caused by stimuli not intrinsic to the system (e.g., war, expansion abroad, etc.)

The foregoing is from the article Dementia Praecox, in a period when big business grew to giant size; when financial manipulation and feverish speculation-perhaps the epitome of "getting something for nothing" -became an integral and even admirable activity for a large number of Americans;

(The above text has been gleaned from Thorstein Veblen by Douglas F. Dowd)

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Musician and writer, who has lived and worked on all the continents and whose articles on media have been published in China, Italy, England and the US, and now resides in New York City.

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