Richard Mellor
AFSCME Local 444, retired
Oakland CA
10-1-08
 http://weknowwhatsup.blogspot.com
 http://www.laborsmilitantvoice.org
 http://www.myspace.com/unionguy510

I saw John McCain on T.V. this morning warning us all about the catastrophe that will arise if the bail out isn’t passed. They are very concerned as the polls show that people are against the bailout by more than a two to one margin. There is tremendous anger in society as workers and the middle class are disgusted, not only with Wall Street but Congress also.

It is this anger, this pressure from below that forced the first “no” vote and reflects the fear that the capitalist class has for their system and the working class abandoning it.
McCain described a horror scene where jobs will be lost, people wouldn’t be able to buy homes and students wouldn’t be able to borrow money for school; in other words, society would turn to anarchy. Credit will disappear if we don’t bail out the moneylenders.

Martin Wolf, writing in today’s Financial Times tells a similar tale. “We are watching the disintegration of the financial system.” he writes. Without finance he says, “no modern economy can survive” He warns that “one can’t punish Wall Street without hurting Main Street. The two streets meet, that’s what streets do.” It reminds me of the favorite line from politicians or CEO’s as they cut services and jobs, “this hurts me more than it hurts you.” Like McCain, Wolf tells us that everybody will be hurt as “businesses and households are starved of credit.” We’re all in this together; is the message. We all have the same interests.

The capitalist class is in turmoil as they experience what can only be described as “shock and awe”. Strategists like Wolf have peered over the abyss and are still not sure whether they can prevent a free fall. But great shocks reveal great truths, as the system is unmasked. Wolf writes that the very existence of capitalism is threatened, “with the ongoing collapse in trust and flight to safety”

So they are worried that there will be a capital flight to safety as Wolf puts it and, he adds, quoting another bourgeois economist, Hyman Minsky, “investors are so scarred that they can no longer bring themselves to participate ion the market.”

But if credit can disappear and households and businesses and society in general can be “starved” of it, there must surely be plenty of money available. After all, credit is simply selling money to us for a price so we can purchase the things we make that the capitalist class owns. I was talking to a co-worker the other day who understood the term credit crunch to mean that there was no money, but it is not a credit crunch, it is a strike of capital; the finance capitalists have gone on strike; they won’t even lend to each other.
They will not participate in the market until they are sure their capital can be multiplied. The marketplace is full of their failed bets so they want the working class to cover them and then maybe they’ll participate again.

The Times reported that Investors in gold are demanding "unprecedented" amounts of bullion bars and coins and moving them into their own vaults. The Krugerrand factory is running at full capacity seven days a week and can barely keep up with demand. Other owners of capital have shifted to the safer haven of government bonds.

But this money is not theirs; the money they are using to buy the gold was taken illegitimately from the working class, it is stolen value; the money they lend to us for a price is wealth our labor created and was stolen from us. I have been accused by some of idealism and writing too often about Marx. But it is Marx’s explanation of how wealth is created in a capitalist economy that enables us to find a way out. The source of the capitalist’s profit and all wealth is human Labor power as this unique commodity is the only commodity, the use of which adds value. It is through the productive process that this occurs:  http://www.marxists.org/archive/marx/works/1867-c1/ch07.htm

Marx’s explanation of how capital exploits Labor makes perfect sense to me; it corresponds to objective reality, it explains to me the nature of my life activity in production. If there is a better explanation I would like to hear it. Borrowed money to start businesses is the collective property of the working class it doesn’t drop out of the sky.

The no vote on the bail out Monday was due to the massive pressure from the working class that these politicians are experiencing, that is why they increased the amount of deposits that the FDIC will insure from $100,000 to $250,000 and are offering some tax breaks for workers and the middle class in the revised plan that they will vote on today; they are afraid of the working class that opposes this bail out of the rich.

So the point is that this credit that is fleeing, this money that is seeking safer havens, is our money and we have to take possession of it, we have to take the loot from the thieves and change the system of production that is based on such thievery. The alternative is workers deciding how capital is allocated and what society’s priorities should be as Sean O Torain commented here:  http://weknowwhatsup.blogspot.com

We are always told this is impossible and that workers are too stupid to be able to manage such a system and our history of struggle against this system is hidden also. But the fear the capitalists have at present is confirmation that they are afraid of workers rising to the occasion and changing society.

We can heed the words of workers spoken more than 150 years ago:

"Brethren we conjure you...not to believe a word of what is being said about your interests and those of your employers being the same. Your interests and theirs are in a nature of things, hostile and irreconcilable. Then do not look to them for relief...Our salvation must, through the blessing of God, come from ourselves. It is useless to expect it from those whom our labors enrich." (1)

(1) 1840's appeal from New England laborers to their fellows to abandon the idea that the employers/capitalists would solve working people's problems. Philip Foner History of the Labor Movement Vol. 1 p192