Parasites (Pt. 2)

I’ll get to my topic below, but first, The Washington Compost says the Democrat race is finished. It claims that Hillary can lose every remaining primary and still clinch the Democrat nomination. (UPDATE: I just realized that the lies originated in the Associated Press. The Compost merely repeated them, as did most other corporate media outlets.)

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Other sources say the AP is lying as usual. Clinton has a lead of 212 pledged delegates, but there are nineteen states to go. Sanders could still catch up in June, especially if he continues to surge in California with 475 delegates to be won.

Sanders would be finished if there were not over a thousand delegates remaining , but there are over 1,400 delegates still to be won. The ComPost doesn’t want you to realize that.

Regarding the New York primary, Hillary (supposedly) won in Buffalo, Rochester, and New York City, while Sanders won everywhere else (he won 58 out of 63 counties). Nonetheless, Hillary “won” officially.

I say Hillary supposedly won because it seems that the primary was rigged against Sanders, just as it was in Arizona…

[1] New York has a closed Democratic primary (as do ten other states) in order to keep current insiders in power. With a closed primary, you can only vote if you are a registered Democrat. (If independents could have voted in New York State, Sanders might have won. It was the same in Arizona.)

[2] Before the primary began, more than 27% of New Yorkers (3 million people) were disqualified by restrictive voting laws. Countless others were disqualified because they were deemed “inactive.” In one Brooklyn precinct, 10% of those who showed up to vote found their names had been purged. In the county in which Brooklyn resides, more than 125,000 voters were cut from the Democratic rolls, leading to a massive 14% drop of eligible voters in five months’ time.

[3] In upstate New York, which was more favorable to Sanders, polling station hours were substantially cut back.

[4] Only voters who registered as Democrats by 9 Oct 2015 were eligible to vote. (No one was aware of this until he got to the polling station and was told he couldn’t vote.)

002Republican insiders do not need to rig their system as much as do Democrats, since Republicans tend to be more consistent in their opinions. All Republicans hate equality, democracy, workers, poor people, refugees, children (except fetuses), and people of color (except for the occasional token).

004Democrats are equally full of hate, but Democrat insiders are also threatened by populists who are outside the Democrat machine, such as independents and Green Party members. Democrats are much less Democratic inside their own system than are Republicans within the Republican system. Republican delegates tend to go with the candidate who has the most public popularity. Democrat delegates focus on keeping Democrat insiders in power, regardless of which candidate is the most popular with the public. (40 Senators and 166 House Representatives have endorsed Hillary, while only one senator has endorsed Sanders.)

005In fact the popularity factor proves that the Democrat system is rigged. National polls consistently show that Sanders has the highest favorability rating of all presidential candidates by far, and beats out all Republicans in head-to-head match-ups. Yet the Democratic machine and the corporate media outlets want to eliminate Sanders before the Democrat convention, so that Wall Street can continue to rule through Hillary.

Why does this happen? Why do the 1% rule the 99%? Reason: among average people there are too many like these…

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Amazingly, some people call Hillary a “aocialist.”

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Anyway I want to return to the theme of parasites and hosts.

Neoliberals and their toadies pretend that the financial economy is the same as the real economy. Thus, for neoliberals and their toadies (including the corporate media outlets), when Wall Street is booming, Main Street is booming, even when Main Street is dead. When the financial economy is hot, the real economy is hot, even when the real economy is in a depression.

Wall Street is a deadly parasite that claims there is no parasite. Thus, the more Wall Street gets fat by sucking the life out of Main Street, the more the corporate media outlets claim that Main Street is in a “recovery.” The fatter the parasite, the deader the host, and the greater the “recovery.”

The purpose of neoliberalism and austerity is to fatten the parasite. That is, to advance private ownership by rich oligarchs in order to widen the gap between the rich and the rest. All public assets and services must be surrendered to the parasites (i.e. privatized). Corporate power must supersede government power.

For example, austerity reduces the amount of government-created money in circulation so that you are forced to seek private money in the form of loans. This reduces you to a debt-slave, with your owners being the financial and corporate parasites.

However, even if we have less austerity, and we have more government money in circulation, we will be no better off unless we remove the parasite. As long as people remain debt slaves, they will surrender any extra money they get (e.g. from a $15.00 per hour minimum wage) to the banks and Wall Street.

As long as the parasite exists, it will continue to grow no matter what we do.

That’s why all money tends to flow upward in our society. It’s why inequality between the parasite and the host continues to worsen every day. All money and human energy is being sucked up by the bankers, investment bankers, financiers, equity fund managers, corporate raiders, corporate CEOs, etc.

The tube through which human energy is drained is private debt, which includes rents, fees, loan payments, and so on.

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Michael Hudson has an article about this in the Washington ComPost, which is also reprinted at Counterpunch.

Our economy has increasingly been financialized, and the result is a sluggish economy and stagnant wages.

Yes. All human energy is sucked up by the parasite. The economy is sluggish because we are being drained.

We need to decide whether to save the economy at large, or continue to save the banks and bondholders by leaving the debt hangover from 2008 intact. Without a debt write-down, the economy will continue to languish in debt deflation, and continue to polarize between creditors and debtors.

We need more than just a debt write-down. We need to kill the parasite. More on this below.

Instead of using credit to finance tangible industrial investment that expands production, banks have been lending to those who want to buy real estate, stocks and bonds. Banks are also lending to corporate raiders – those who buy companies with high-interest bonds, thereby raising debt-to-equity ratios. The raiders leave a bankrupt shell, and threaten employees that bankruptcy would wipe out their pension funds or Employee Stock Ownership Plans if they do not agree to replace defined benefit pensions with defined contribution schemes that are much more risky.

It’s called asset-stripping, and it’s how Peter G. Peterson became a billionaire. It’s also how Mitt Romney got rich, namely by destroying companies and escaping with their loot. Now Peterson uses his fortune to push for the privatization of Medicare and Social Security.

The parasite dynamic is more extractive than productive. Corporate financial managers, for example, can raise their company’s stock price by simply buying back shares from investors. The managers borrow money to buy the stick.  In addition to raising debt-to-equity ratios, these short-term tactics “bleed” companies, forcing them to cut back on research, development and projects that require long lead times to complete. Corporate managers are paid by how much they can raise their stock prices in the short run. When earnings are diverted to pay dividends, or to buy back shares, growth slows. But by that time, today’s manages will have taken their money and bonuses and run.

For example, hedge fund investor Eddie Lampert bought K-mart when it was in bankruptcy in 2003, merged it with Sears, and squeezed billions of dollars of cash out of the company and shunted the, into his own businesses. In 2000, K-mart had 2,165 stores. Since then, because of Lampert, 1,203 stores had to close, and the number keeps rising fast. In three years or less, K-Mart and Sears will be extinct. Lampert will have sucked the company dry. (K-mart will close 68 more stores this summer. Sears will close 10.)

On an economy-wide scale, rising debt can inflate prices for real estate, stocks or bonds on credit. Asset prices reflect whatever banks will lend against them, so easier credit terms (such as lower interest rates, lower down payments and more time to pay back loans) increase the asking prices of everything else.

In my opinion this is the main reason why a car that cost $300 in 1925 costs $30,000 today. On a macroeconomic level, debt inflates prices over time.

Banks have found the biggest loan markets (and targets) in mortgages for real estate, natural resources (oil and mining) and infrastructure monopolies. Therefore most of the interest that banks receive from their lending comes from property rents and monopoly rents. Whatever the tax collector leaves behind can be sucked up by the banks in form of interest payments on further loans. These loans create debt-leveraged “capital” gains, which receive favorable tax treatment compared to profits and wage income, which are taxed higher. The savings end up in the hands of banks rather than individuals who would spend that money back into the economy.  

At least half of all the money in the economy is sucked up by the parasite. Some of it right away. Other portions of it more slowly.

Home mortgages absorb a maximum 43 percent of the buyer’s income just to service their debt. Student loans, auto loans, credit cards and other bank debt may absorb another 10 percent of the debtor’s income. This leaves only half of personal income available to spend on anything else one might need. Meanwhile, wage withholding for Social Security and Medicare (the FICA tax) eats more than 15 percent of income. Other taxes (income taxes, property taxes and sales taxes) take up another 10 to 25 percent. In the end, the combination of financialization and the taxes shifted off the finance sector and onto individuals can eat away as much as 75 percent of a wage-earner’s income.

Therefore 25% of all your money (i.e. all your human energy) is taken as taxes, and half of your remaining money sucked away by the parasite, which enjoys a free lunch.

Loading the economy down with debt (in all its forms) leaves less disposable income for individuals and businesses that could otherwise be buying consumer goods and investing in real production. As the “One Percent” puts the “99 Percent” deeper into debt, financialization has become the major cause of increasing inequality of wealth and income. In due course, the amount of debt will exceed the economy’s ability to produce a large enough surplus to pay it back. This makes a financial breakdown inevitable.

It’s tempting to think there will be a mass breakdown, but the USA could just as easily become a nation of shanty-towns. The rich will still have their mansions, country clubs, gated communities, private jets, and private islands.

This financial dynamic always leads to a transfer of property from debtors to creditors, unless debts are forgiven or brought in line with the debtor’s ability to pay and the current market value of homes that are over-mortgaged and owe more debt than they are worth.

With neoliberalism, everything is geared toward [1] giving public assets to rich owners, and [2] reducing everyone to slaves so they give their human energy to their owners.

In 2008, banks convinced governments to “solve” the debt problem by taking bad bank debt onto the public balance sheet and then bailing out the banks. But while a government bailout or IMF loan may enable private creditors to jump ship, it shifts the burden onto the government – mainly to be borne by taxpayers. This requires governments to cut back spending, or to raise taxes to transfer income from taxpayers to bondholders.

That’s true at the state, county, and municipal level, where governments impose austerity in order to pay creditors. The system is insane. Or maybe this is the natural course of all empires. They are born, they grow, and they develop cancer, which kills them. Or else they are destroyed by war or some calamity.

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In the end, society must choose whether to save the economy at large, or to save bondholder and banking claims on the economy.

What would getting rid of the parasite entail? The Socialist Worker blog has a detailed explanation of how the banks should be reformed. I very lengthy but you can skim it if you’re in the mood.

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Finally, here’s a bit of macabre absurdity.

In an interview with Austrian newspaper Die Presse, Former U.S. Secretary of State Madeleine Albright defended her murder of half a million children, while calling Russian President Vladimir Putin, “a truly evil man.”

Madeleine Albright is tight with Hillary Clinton. (“We came, we saw, he died.”)

Albright

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