[R-G] Fwd: Three on Economic Crisis by Mumia Abu-Jamal

[Anthony Fenton]

Three on Economic CrisisOct 22, 2008 By Mumia Abu-Jamal
[Below are three ZNet commentaries by Mumia Abu-Jamal on the economic  
crisis.]

Behind the Money Crash
By Mumia Abu-Jamal

For millions of people, the economic crash and crisis seems almost  
mystical.

What happened?  Why did it happen?  How did it happen?

It seems more complex than it really is.  That's because the corporate  
media is, more often than not, a contributor to confusion, rather than  
a source of clarity.

The media thrives on conflict, chaos and controversy.

That's why I found in the {British} left press what I've never seen in  
the corporate media: the text of a 2002 open letter from U.S.  
financier, Warren Buffett to his Berkshire Hathaway shareholders.   
Buffett, one of the richest people in the U.S., warned his  
shareholders to avoid 'derivatives'. which he described as "time  
bombs, both for the parties that deal in them, and the economic system."

Buffett explained that derivatives are financial agreements for the  
exchange of money at some future date, which can be 20 years or more.  
What makes them dangerous is they're collateralized, or guaranteed,  
based on often faulty reference points.  For example, derivatives may  
be traded saying in 10 years, GM stocks will double its 2004 value,  
and if it does in 2014, the instrument buyer will receive say, $10  
million.  In many cases, before the contract is ripe, not a penny has  
changed hands, yet some companies assigned these instruments a value,  
recorded them on their books as assets, when in fact, they had no real  
value.

Remember Enron? On paper, they were rolling in dough.  In fact,  
however, they were rolling in paper -- for, at any time, if they hit a  
snag, they had no real cash to cover corporate debts -- it was on the  
books, but not in the banks.

Again, Buffett explained six years ago why these instruments should be  
avoided, writing to his shareholders:

The derivatives genie is now well out of the bottle, and these  
instruments will almost certainly multiply in variety and number until  
some event makes their toxicity clean. Knowledge of how dangerous they  
are has already permeated the electricity and gas businesses, in which  
the eruption of major troubles caused the use of derivatives to  
diminish dramatically.  Elsewhere, however, the derivatives business  
continues to expand unchecked. Central banks and governments have so  
far found no effective way to control, or even monitor, the risks  
posed by these contracts.*

In closing, Buffett warned, "derivatives are financial weapons of mass  
destruction, carrying dangers that......are potentially lethal."

{Source: Labour & Trade Union Review (No. 191: Oct. 2008), pp.16-18}


Scare Tactics
By Mumia Abu-Jamal

With the passage of the Wall St. bailout bill, a major line has been  
crossed in U.S. economic and political history.

The rulers can do anything, as long as they leaven it with fear.

Just like the Iraq War authorization, with enough fear Congress will  
roll over, and say, "Uncle."

And there was an avalanche of fear.  The corporate media sold oceans  
of fear and dread, just as it sold facile patriotism, the Iraq War and  
the so-called "War on Terror."

Using individual tales of fallen 401(k)s, or of a few firings, they  
successfully insinuated that unless the bailout passed, you might lose  
your job, or your 401(k) might turn to dust.

They ran the banner headlines of the drop of the Dow Jones Industrial  
Average, and scared legislators into flipping their prior no votes  
into yea votes.

Here's the deal.  What we've seen from both major political parties is  
the greatest transfer of public wealth into private hands in history.   
Indeed, it is privatization run amok.

It is a bailout, pure and simple, that the media and its masters want  
you to call a 'rescue', but who is rescued?

You? C'mon.

Does  a government that facilitated the loss of millions of jobs; that  
scuttled public education; that gave away the public treasury to Wall  
St. bankers; that sold a long war based on lies; that allowed millions  
of homeowners to fall into foreclosures, give a damn about you?

A government that cared about its people wouldn't have led them to  
this disaster.

Think of it this way: the same government that fought for months to  
privatize social security, or in other words, to invest peoples'  
retirement funds into stocks, came up with this bailout plan.

If the government was successful, some 40 million people (those 65 and  
over) would've been flat broke.  What they couldn't do one way, they  
did another, for the economic hole that another trillion dollars will  
blow into the deficit spells danger to this project.

If you elect a government based on its rhetoric of anti-government, of  
deregulation, of the 'blind hand of the market', you get economic  
carnage, crony capitalism, and misery for millions.

Moreover, what you have is the privatization of the State, by its  
rental by private capital.

For, in both houses of Congress, in both major parties, we find pols  
who have received tens of thousands of dollars from Wall St.  Can  
anyone deny that this money donated to Congress was wasted?  (By  
'wasted', I mean to those who made those donations -- not to average  
Americans).

As the saying goes, 'you get what you pay for.'

It might also be said that you get what you vote for.

{Note: Check out www.opensecrets.org for data on Congress for sale.}


Fall of the House of Capital?
By Mumia Abu-Jamal

By the time you read this the $700 billion bailout will have been old  
news, one of the biggest transfers of wealth in history.

But it will not heal that which ails the nation as it trips and  
stumbles like a drunken sailor on shore leave.

The reasons are simple.

For the problems are systemic, built into the rapacious nature of the  
machinery humming all around us.  The Rube Goldberg-like contraption  
of democratic forms at the service of the financial services industry  
is a bottomless maw, a gaping mouth that is never sated.

Why was there no alarm when millions of people lost their homes to  
foreclosures made inevitable by variable mortgage rates?  When  
millions lost manufacturing jobs to low paying service gigs?  When  
living standards crumbled, and when take home pay fell to 1973 levels?

Where was the alarm?

There was no alarm -- for this was the 'blind hand of the market' at  
work, the leveling way of globalism, the new world order moving  
through, preparing the way for the triumph of capitalism uber alles.

Few were the politicians who gave voice to this immense social  
suffering. Fewer still used their power to try to assuage their pain,  
for they too were drunk on the wine of globalism.

But when the ripples spread upwards, from the foreclosed homes to the  
foreclosing banks -and from the banks to investment houses, Congress  
stirred from their drunken stupor, and rang alarm bells loudest.

"It's an economic 9/11!", some bellowed; "It's a financial tsunami!",  
yelled others.

When Americans were hoodwinked into ruinous sub-prime loans, and  
millions were faced with foreclosures, where was the alarm?

More importantly, where was the help for those who were endangered?

Nowhere.  Nowhere.

If they helped them the present economic crisis would've been mitigated.

Instead, we're in a situation where a scam artist sets up shop in a  
street-corner, playing a fraudulent 3-card monty hustle, and along  
comes a cop.  The cop, instead of rousting the scam artist, rifles the  
pockets of every passerby, and delivers the stolen loot to the scammer.

The scam artist, of course, is the financial investment houses; the  
cop, of course, is Congress -- and you are the passerby, hustled and  
robbed by both of them.

Karl Marx and Friedrich Engels wrote, 160 years ago, that the State  
was but the executive for capitalist.  After what we are all seeing,  
who can doubt it?

The Empire is crumbling.



From: Z Net - The Spirit Of Resistance Lives
URL: http://www.zcommunications.org/zspace/commentaries/3657