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The deluge

By Michael J. Smith on Tuesday September 30, 2008 09:17 AM

I really wouldn't have thought that anything could make me proud of the US House of Representatives, but yesterday's stunning rejection of the bailout bill certainly did -- no thanks to the Democrats, who voted for it 140-95.

All the experts and wise men were for it -- the Waxmans, the Franks, the Rangels. In fact anybody with a safe seat was apparently for it. The people who bolted were the people who don't take their re-election this fall for granted -- in other words, the people who had to listen, however unwillingly, to what the public was saying.

For the experts, deeply invested in their knowledge of the arcane institutions of finance, a threat to those institutions is a threat to civilization itself. Apparently the public, however, doesn't grasp just how indispensable these institutions are. I'm with the public on this one.

* * *

Comrade Owen understands these matters better than I do, so I asked him about it. His take:

The returning mariner immediately chivy-ed me with "meltdown" questions:

"Just what would be so terrible if we let all these bankrupt institutions evaporate? -- Nobody to lend to solvent businesses any more? But surely that's nonsense -- the Fed could do it directly if need be, no?"

Yes indeed, if Uncle stands ready to put the whole corporate economy (globally) on a new "artificial" gubmint hi-fi vascular system. The chaos would be temporary and the damage to organizational momentum among our production outfits minimal. Boldness to the max of course would be de rigueur. Damn the glitches and full speed ahead -- anything less would yield unnecessary losses of real output.

Warning, Will Robinson! Warning!

Yes the commanding heights are right there within Uncle's grasp. he has all he needs to get on with it. But need I notice a jilted Wall Street gathering herself on her Manhattan Laputa, ever ready across the Rhine -- like any deposed ancien regime, preparing her vicious pounce at even the slightest wobble or uncertainty on Sam's part.

Obama got the fire in his belly for the likes of that? I mean do he look like this guy to you?

The black man who straight-armed Wall Street. Hmmmmm.

Comments (5)

At present, undistributed corporate profits plus corporate depreciation allowances (this latter being a form of cash-from-income that has long had only a VERY loose relationship with actual machinery-replacement needs) together are 85 percent of private business investment.

In other words, if they were to cut their dividends for a while, businesses could operate and even expand entirely from existing internal cash flows.

Whatever Wall Street is these days, it ain't the bank for basic production and distribution. Quite the contrary. It's a playpen for all the surplus wealth that has "nowhere else to go," thanks to the over-accumulation of capital/the basic purpose of the system itself.

The government could also easily make up for whatever slow-down might come from telling capitalists to sit & spin. We could, for instance, start building a modern national railroad system.


"if they were to cut their dividends for a while, businesses could operate and even expand entirely from existing internal cash flows....."
are you saying
they don't need to leverage their equity ???

"thanks to the over-accumulation of capital....."
a fairly radio-active phrase comrade dawson

"The government could also easily make up for whatever slow-down might come
from telling capitalists to sit & spin"

capitalists ???
are you talking the hi fi corporations here
are u talkin all the trans nats ???

if the former i agree
uncle can be his own commanding heights
but if yu mean all the big corporations
i'm not so sure what you mean by
sit and spin

even more gravely
are you including
the vast pool of medium to small sized bizz-niks too ??


its i'm sure entirel un-necssary
to point out

the orthrian core of the two party system
was exposed
in the big vote on monday
as if by lightening strokes

much as reconstruction history
was revealed
to st woodrow
by griffith's birth of a nation

Well, OP-san, as Sensei Noam always says, the overs are a highly class-conscious lot -- an injury to one of them is an injury to all of them.

But you're certainly right that this whole thing hasn't (yet?) ensnared the global players.

If my view (that it's a mere early symptom of the 1929 flu) holds water, that will come soon enough, though...



imperial obligations weigh heavily here

i suspect paulson
wanted to "make a market"
here in freedonia
for all that toxic shit
wally and company peddled
to the world's sovereigns and not so sovereigns
of course
europe had its house brands of toxic too

the joint dream

a virtual yuka mountain
for all god's creatures
little toxic securities

a holder of last resort
where the globe's
privateering hi fi ers
can stuff all their jive
off load it on uncle
and store it
like king arthur's remains
till the end time cometh

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