Capitalism Calls for Nationalized Banks

The word for today, boys and girls, is NATIONALIZE! All thru out the news yesterday, economic pundits called on the government to NATIONALIZE THE BANKS! What does this mean? Leading economists of the capitalist system calling for nationalization can mean several things.

But first, we need to define nationalization and society in the age of misinformation.

President Barack Obama made a speech in Arizona, which has the third highest foreclosure rate in the country. Obama wants to help banks restructure mortgages, and refinance some mortgage holders who owe banks for homes no longer worth what they paid. All this is part of his stimulus package.

But the automakers continue to be in distress as Goodyear lays off workers because slow car sales means less tire manufacturing. The New York Stock Exchange closed down by 300 points. Economic activity is predicted to contract and unemployment is expected to rise. Most experts believe the recession will last at least 24 months if it doesn’t plunge into a depression.

Structural readjustment for the US economy can only lead towards financial disaster. The bloodsucking international banking system proved this in Africa, Asia and Latin America. When economists begin demanding the nationalization of banks, capitalism is in big trouble.

Nationalization means a government takeover of a sector or the whole economy. This can happen under a socialist state, which we do not have, or it can happen in a state moving towards fascism, which we appear to have.

While the administration has not broached this subject, since Larry Summers of the White House’s National Economic Council appeared in several interviews and never even hinted at it, business experts and leading economists have begun making powerful cases for nationalizing the banks. To underscore, Timothy Geithner, Treasury Secretary and former head of the New York Fed, has a grounded policy initiative due to a sharp change of course which resulted in tanking markets on Wall Street. The pundits have panned Geithner and made an issue of Obama trying to fix the economy from the White House, citing politics and, paradoxically, George W Bush’s policy of giving the Fed a free hand.

All the leading capitalists, from the president on down, smell like a stinking joke.

But to nationalize the banks? Wow, that is a great leap, and not of the Maoist kind. Because we must ask the inevitable question, how will that happen? Especially after banks continue to receive massive monies from the public coffers.

In the age of misinformation, where the neocons have convinced white workers that welfare, national health care reform and Social Security are socialist programs while remaining silent on gov’t giveaways to financial institutions, people must be wary of what it means for certain forces to make the call for nationalization. Because if Obama’s administration emerges from this period looking like the Weimar Republic, it will set the stage for a neocon resurgence looking for blood.

A government takeover of the banks musn’t transpire after so much money has been doled out to them, nor without purging the top management of any banks that get seized. No takeover should happen with compensation for stockholders, either. Altho this contradicts US laws concerning imminent domain, the banks have already received massive liquidity injections of public funds on a periodic basis since July 2006. Yet whichever banks are insolvent the government has no business acquiring them in attempting to make them float.

Thus, experts calling for nationalization seem to be pulling the wool over our heads. They have the temerity to defend Bush’s asleep-at-the-wheel economic decisions while criticizing aggressive moves made by the four week old Obama presidency. Business experts Nina Easton, Fred Mishkin, Nouriel Roubini and Mark Zandi appeared on Charlie Rose to form a consensus on nationalization and against having a White House-run national economic plan. However, the calls for nationalization have been broader than just theirs, to cattle-prod the black president into a less deliberate approach to a crisis that has built up over the entire subprime mortgage era.

Since the Clinton-era “war on crime”, codified in repressive criminal legislation and accompanied by a massive prison boom built on the backs of black prisoners that jolted the voodoo economy of his predecessors, plus the passage of NAFTA alongside the unspoken war against Chicanos and other latino immigrant workers, the United States has become a neo-fascist republic. During this period, the US accounted for holding 25% of the world prison population, and private prisons and security firms became the fastest growing sector of the US economy.

This trend sharply intensified under two terms of the Bush 43 administration with the so-called “war on terror”, itself a form of terrorism. Combine that with an economic crisis in the making since the S&L scandals of the Eighties thru the DotCom shakeout on to the current subprime mortgage meltdown, if it can be correctly characterized that way.

The effect of these combined scandals and crises has been a huge concentration of liquidity into ever fewer hands. The credit regime arose because liquidity had been squeezed to the extent that people lacked the chance to buy with cash. After all, two percent of the population owns and controls 50% of the money. So, in backing paper tigers from coast to coast, it became necessary to heavily rely upon consumer credit spending for economic growth. And this practice resulted in a more intensified concentration of liquidity. By concentrating cash in so few hands, money became even scarcer for workers, the middle class and small business. In the end, statisticians revealed how Americans worked longer and harder than their counterparts in other industrial countries, how production had increased -- because of people trying to work themselves out of debt -- and folks had less to show for it.

In a country where workers happily settle for $300 tax kickbacks while the government doles out $750 billion to financial institutions, anybody calling for nationalization of banks is either delusional or on a serious mission to turn this country into a fascist state. The steps towards fascism remain firmly in place and Obama, being a part of the ruling class, may not be firmly against turning away from that. For that reason, we need a workers economy based upon humanity rather than capitalist ideals. We need a society built on people power rather than crass dollarism.