by BAR executive editor Glen Ford
The more the Wall Street financial class dominates political affairs in the United States, the sooner they will meet destruction. By giving the banksters everything they wanted, including free money, the Obama administration actually accelerated the processes of finance capital’s decline. That’s because, unfettered, capital behaves in ways that make its contradictions even more acute.
The Unraveling of the Empire of Finance Capital
by BAR executive editor Glen Ford
“The more politically dominant finance capital grows, the deeper and more frequent the crises.”
We are living through an acute and irreversible stage of the systemic decline of finance capital. Not coincidentally, it is a time when Wall Street’s political supremacy in the U.S. is all but complete, having wholly captured or neutralized both political parties. This period is increasingly characterized by overlapping, cascading crises. Although the exact point in time that we entered this tumultuous juncture in history, under the firm hegemony of Wall Street, is subject to debate, we are clearly there.
The crises of bursting dot.com, stock and housing bubbles have been superseded by finance capital’s inability to reflate any of the old domestic bubbles, despite the transfer to Wall Street of $12-14 trillion through its synchronized servants in the Obama administration and the Federal Reserve. While unreconstructed “left” Obamites moan that the object of their hopes has failed to apply enough “stimulus” lubricant to get the machinery rolling, the real story – the one historians will tell – is that an administration whose economic policies were minted by Wall Street cannot halt the unraveling of the finance capitalist system.
The reason is simple: Wall Street’s hegemony, its unfettered freedom to act out its imperatives, inevitably spawns recurring – and ever deeper – crises. The more politically dominant finance capital grows, the deeper and more frequent the crises.
The crisis is now general, meaning the machine cannot be repaired. If $14 trillion – roughly the size of the U.S. Gross Domestic Product – couldn’t fix finance capital, nothing can. Indeed, it appears the greatest transfer of wealth in history, purportedly designed to flood the United States with loaned money, is instead being exported, causing such horrendous destruction to the world economic order that nations are joining to fence out the piranha-like U.S. dollar, before it destroys human society.
“An administration whose economic policies were minted by Wall Street cannot halt the unraveling of the finance capitalist system.”
The latest permutation of the general finance capitalist crisis has revived calls for a moratorium on home foreclosures, but may threaten an even greater catastrophe for the bankster class. The big-bank practice of “robo-signing,” where institutional officers certify to their personal familiarity with the terms and ownership of impossible numbers of mortgages per sitting – sometimes hundreds a day – has led Bank of America to voluntarily halt all foreclosures and wreaked havoc throughout the industry. If banks can’t prove, and courts don’t know, who lawfully owns what mortgage, then past and future foreclosures are under a cloud – another stake in the heart of the housing market. But, according to reporting by finance writer Ellen Brown, most of the mortgages bundled as securities in elaborate “tranches” by Wall Street may have been illegally processed through Mortgage Electronic Registration Systems (MERS). The banks claimed the MERS were temporary holders of the sliced-and-diced mortgages, but courts have concluded that MERS, as mere financial instruments, can own nothing and assign nothing. Therefore, “the chain of title has been irrevocably broken.”
Beyond the sheer, mind-boggling fiscal and human mess of it all, and whether the banks can survive having all that financial paper, good and bad, tied up for who knows how long, there is the howling question of what the banks owe each other? Can the fantasy values of these securities survive the kind of examinations that might be spun off by the “robo-signing” scandal? And if a number of major banks prove to be insolvent – as many suspect – what will be the governmental response?
We know the answer, or ought to. The Obama administration, with the compliance of Democrats in Congress, will mouth words and propose solutions formulated by a consensus of the Wall Street players that come out on top of the rubble, just as occurred post-September 2008. And because the political hegemony of Wall Street will remain intact – What is there to threaten it? – the remedy will encourage and feed the base imperatives of the finance capitalist class, leading inexorably to the next disaster and an accelerated process of destruction.
“U.S. finance capitalists, engorged with ‘free’ Fed money, went on a predatory speculative rampage.”
When the bankers got everything they wanted last time around – from Obama and the Fed, not the Congress – they took the trillions and went on a financial jihad against, literally, every government and currency on the planet. As research professor and former Wall Street economist Michael Hudson explains in his article, “How the U.S. Launched a New Financial World War, and How the Rest of the World Will Fight Back” (October 10, Counterpunch), U.S. finance capitalists, engorged with “free” Fed money, went on a “predatory” speculative rampage that has united growing parts of the planet in mutual protection societies against the U.S. dollar. Hudson’s scenario looks very much like what I foresaw in 2003, when a pattern emerged of global resistance to U.S. military and economic aggressions that I called “the redlining of America.” Of course, the redlining of America is economically problematical for common folks in the U.S., but we will all benefit from an earlier death of U.S. imperialism, which would be the result. In the interim, the people must organize their own movements of resistance to Wall Street’s domestic depredations, and try our best to disarm the imperial monster to whatever degree possible, since he will become even more dependent on his guns as imperial economic power crumbles.
All this means steering clear of the Democratic Party, which is wholly owned by finance capital and cannot help but serve it. Fortunately, the Democrats cannot save Wall Street from itself, no matter how hard they try.
BAR executive editor Glen Ford can be contacted at [email protected]