Sunday, December 13, 2009


Corporate America began to wage what turned out to be a one-sided war against working people in the mid- to late-1970s,
The presumed failure of Keynesian economics
Maybe there had been too many restrictions placed on the market,
If these complex arguments could be tied to simple clichés,
the government
the unions
"welfare queens"
President Jimmy Carter appointed Paul Volcker to chair the Federal Reserve Board of Governors, and Volcker, under the guise of fighting inflation, immediately began to snuff the life out of working class communities by forcing interest rates up to nearly 20 percent.
What Carter began, Reagan completed, firing the air traffic controllers and putting the nail in labor's coffin.
right-wing think tanks
Heritage or the American Enterprise Institute or the Cato Institute.
ideological centers churn out
find their way into our newspapers
A gigantic network
a television network (Fox) bombard us with right-wing propaganda.

the shibboleths of neoliberalism--such as the needs for privatization of public entities, the free reign of markets, the obviousness of the success of welfare reform, the evils of raising the minimum wage--
lack of an ideological alternative
due to the abject failure of organized labor to provide one.
In other words, until there is a radical ideology to replace right-wing thinking, the latter is unlikely to lose its drawing power.
"In 2006, the financial sector employed about 6 percent of the workers, but 'produced' 40 percent of the profits of all domestic firms."
"Making money without actually making something turned out to be the largest growth sector of the U.S. economy from the early 1980s to the present crisis."
manufacturing and other parts of the "real" economy have become less lucrative, the trading of paper assets has become Wall Street's new profit-center,
What impact has the "financialization" of the economy had on ordinary working people?

First, it was the neoliberal "revolution" begun in the 1970s that did immense harm to working people.
Real wages (the purchasing power of our paychecks) began to stagnate in the 1970s and are not much higher today than then.
Relatively high-wage public employment began to endure a long period of privatization,
The move toward "free trade" did workers here no good, as manufacturing began to flee our shores for low-wage havens abroad. None of these things had to do with financialization per se.
incomes began to flow upward, those with a great deal more money began to look for ways to put this money to work.
The corporations that they owned also had higher profits, and they did the same.
robust financial sector
in the past, it was not the tail that wagged the dog as far as our system of production and distribution was concerned. Neoliberalism brought with it a deregulation of international movements of money and goods and services.

we see neoliberalism as a political response to capital's quest for restored profits beginning in the mid-1970s
boom ended and the slow growth (stagnation) common to mature capitalist economies reasserted itself.
These, in turn, required a certain amount of financial innovation, to reduce
the risks of fluctuations in currency exchange rates and sharp changes in political conditions that could threaten investments.
finance began to take on a life of its own.
And while neoliberalism and direct corporate actions inside workplaces did reduce costs and raise profits, they did not create nearly enough capital spending opportunities (investment) to absorb the growing individual savings and business profits.
Leveraged buyouts, stock market speculations, real estate "investments"--all took off from the 1980s on, absorbing money that could not find enough opportunities in the real economy of production.

Leveraged buyouts inevitably resulted in the hollowing out of what were often perfectly viable businesses. Companies were saddled with debt, assets were stripped and sold, and workers were furloughed by the tens of thousands.
The inflation of asset values gave rise to the notion
to increase the share price of their businesses
Businesses came to be thought of as mere collections of assets rather than entities that produced things. Asset inflation gave rise to asset speculation and the development of ever more complex financial instruments, all leading sooner or later to financial bubbles and the inevitable bursting of the bubbles.
the bursting of financial bubbles has had tremendously negative impacts on working people: shuttered workplaces and unemployment to name but the primary ones.

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