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Deja Moo, I Think I've Heard This Bull Before

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Deja Moo

In the 1920s, as in the period from the 1980s to the present, there was a massive shift in the distribution of income - a redistribution - away from wages and toward profits, which in turn suppressed "consumer" (I hate that word!) demand.  Workers, it seems, are nothing more than machines, parts of machines, tools to produce wealth, which is then taken away from us - at least the greatest share.  And further, we are forced to return that piddling share by buying, or using credit/debt, to secure what we need to live.

When wages are "restrained", more and more of the wealth created by workers is appropriated as profit by corporations/owners/capitalists/the Rich, and worker-consumers are left with insufficient money/wages with which to create demand for the products they produce for corporations/ owners/capitalists/the Rich.  (Consumer demand is 70% of US GDP.)  In turn, corporations owners/ capitalists/the Rich have little incentive to expand production of goods/products for which there will be little or no demand.  Can you say killing the goose that laid the golden egg?  There are two sides to a seesaw, or a scales, whether of justice or of economics.

But rather than balance their side of the seesaw, e.g. invest in a new enterprise or maintain an ongoing operation, corporations/ owners/ capitalists/ the Rich prefer to just take the money and run.  When was the last oil refinery built in the US?  Why are dangerous nuclear reactors inadequately maintained?  Why do the producers of such toxic waste as mercury-containing coal slurry and CAFO manure ponds pump these poisons into our shared air, soil and water rather than paying to dispose of it?  When was the last time your landlord cheerfully agreed to have your leaky faucet fixed or to replace the 1970s-era fridge that just laid down and died on you?

In all these examples - and many, many more - the "investment", now totally depreciated, the refinery, the reactor, the industrial operation, the plumbing fixtures and appliances in your apartment or house are seen simply as a money well, cash cows, from which the corporation/ owner/ capitalist does nothing but draw water/milk/profit with no further investment whatsoever being the goal, with maintenance undertaken only in the face of imminent collapse, or perhaps collapse is the point, so the entire "enterprise" can be written off the corporation's/owner's/capitalist's taxes.

You see, it does not matter that too-few, creaky refineries choke off the supply of gas.  That creates demand and drives up profit.  It doesn't matter that an ill-maintained nuclear reactor, uncontained coal slurry or a leaking fecal pond leeches poison into the atmosphere in which we all live.  When these investments/enterprises are shoddily maintained, or not maintained at all, the money thus saved can be appropriated as more profit.

"Carbon-sequestration initiatives have recently been cancelled.  In the UK, Shell has just pulled out of the world's largest wind-energy project. Despite heroic levels of advertising, energy corporations, like pharmaceutical companies, prefer overgrazing the commons, while letting taxes (yours), not profits (theirs), pay for whatever urgent, long-overdue research is actually undertaken." - Mike Davis, "Humanity's Meltdown"  June 2008

And why would you use the fixtures and appliances in the apartment or house you rent?!  Those have to last - forever.  You can't go spending money on repairs and replacements every thirty years simply because some wasteful tenants want to actually use them, despite the fact that these products are planned with obsolescence in mind. 

You see, after the initial investment, the procuring of the money well/cash cow, everything else is to be appropriated as profit to as great an extent as possible.  There is a vast refusal on the part of corporations/owners/ capitalists/the Rich to maintain or update any thing at any time.  That interferes with making a profit.

Since 1980, the rapidly accelerating income shift, directing more and more of the wealth produced by labor away from wages and toward profit, the massive tax cuts for the already massively wealthy, and the massive deregulation by Clinton/Bush created not only a vast surplus of wealth at the top of the heap, but a consequent drop in consumer demand - no wages, no demand.

Without demand, corporations/owners/capitalists/the Rich have no incentive to invest their outrageous profits in producing things that workers can't afford to demand, so corporations/owners/capitalists/the Rich turn to financial "speculation"/gambling/turning things over/flipping them/making misery a commodity all in order to produce more profit.  This is getting tiresome, isn't it.  And this is all corporations/owners/ capitalists/ the Rich are interested in.  Pretty boring.  But then, they don't have to be interesting.  They're rich.

So since the Reagan/Bush/Clinton/Bush massive tax cuts for the already massively wealthy, along with their slash and burn deregulation, had created a surplus of wealth (derived from that "surplus" value they appropriate from the workers), that excessive wealth was just up there, at the top of the income pyramid, sloshing around, looking for a place to be "invested"/gambled and - voila! - there was real estate, bubbling up and around Alan Greenspan's low, low interest rates, spurring workers to go into debt via credit (same thing) and bankers and real estate brokers to make greater and greater profits by making more and more low interest, no interest and "liar loans" to generate more and more fat fees.

And in most cases, the "loan-er" making the low interest, sub-prime loan, KNEW the "loan-ee" wouldn't be able to pay the ARM mortgage payment once the rate adjusted upward.  (Google Adjustable Rate Mortgage, or "exploding ARMs".)  However, "loan-ers" told "loan-ees" that long before that happened they'd be able to sell the house at a fat profit, or renegotiate the mortgage by using the increased value/equity of the house, since the market could only keep going up.  That way they'd be able to pay the higher "exploding" ARM.  In the case of "liar loans" it was "don't ask, don't tell."  The bankers and real estate agents could have cared less, and in many instances, knew the "loan-ee' wouldn't be able to make the mortgage payments.  They didn't care.  They made their money by making more and more loans, generating more and more fees, then selling the loans, all bundled together in one big revenue stream, to some other suckers as derivative "securities" that they knew were insecure to say the least.

When a very few people take more and more and more, a bigger and bigger and bigger share of the total economic pie, e.g. the wealth created by labor, (See CEO pay and bonuses.) it encourages financial speculation/ gambling/betting in order to feed the greed for more and more and more.  And because wages are driven down, down, down so far that worker-consumers can no longer create the demand for actual products, there is no incentive for profit-seekers to produce them, and they turn to financial speculation in search of their next hit of addictive profit.

In addition, it's impossible to spend all the money corporations/ owners/ capitalists/the Rich have funneled up to themselves via campaign contributions and lobbying to obtain low-low taxation, next-to-nothing regulation, offshore banking privileges, subsidies, abatements and over-the-counter (which actually means under the table) stock and securities trading.  How many private jets and yachts can one use?  And often, after one has acquired above a certain number of mansions, one even forgets how many one has ala John McCain. 

So in order to get the next fix, the ultra-ultra rich, the point-oh-one percenters, are driven, driven to do something "creative" with all that money, to "invest" it in order to make more to feed that habit by speculating/ gambling, often betting on which companies will go under.  And with their massive amount of betting/leverage, they often create the very condition they're betting on, when others rush to make the same bet, driving down the value of the company even to the point of bankruptcy, taking all of its employees with it, and thus profiting off the misery they create.

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Vi's works appear widely both in print and online. She conducts Poetry Workshops and gives readings in Central New York. Her latest chapbook is "Sine Qua Non Antiques (an Arcanum of History, Geography and Treachery).
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"Funnel up" as in what happens to your a... by Margaret Bassett on Sunday, May 31, 2009 at 12:31:20 PM
...and the attending article is even better. Even ... by Jennifer Hathaway on Sunday, May 31, 2009 at 12:38:14 PM