October 30, 2009

Bailout War

Filed under: Disaster Capitalism, Global War On Terror — Tags: , — Russ @ 11:01 am
As we enter year two of Bailout America and reach the end of year two of the official bank-created recession, and as we continue further and deeper into the decades-long quagmire of financialization and the devastation of the real economy, we should look to the state of what’s supposed to be our democracy as well, since it has been just as degraded as our wages, just as hollowed out as our manufacturing, just as fictitious as our “growth”.
Last fall the Bush administration tried to seize the ultimate disaster opportunity when it sought to steamroll Congress into passing a three-page authorization which would have made Henry Paulson a veritable dictator. They threatened a complete meltdown, that by Monday “there might not be an economy” unless Congress stampeded. The “leadership” was suitably terrified, which reinforced their normal corporatism and cowardice. They did all they could to deliver the “emergency” war powers Bush and Paulson sought. (That’s exactly how the inception of the bailouts should be seen, as an internal economic war authorization, and very similar to the Enabling Act demanded and obtained by Hitler in 1933.)
By some miracle the House at first listened to the fierce wisdom of the people who immediately saw this for the coup d’etat it was. But the miracle was ephemeral. The coup plotters added a few pages and toned down a few provisions. They added some limits and oversight authority. Meanwhile the corporate media kept up a drumbeat similar to the SA troopers outside the Reichstag shouting in unison, “We want the Enabling Act or there’ll be hell to pay!”, while an astroturf telephone and e-mail campaign laid seige to the holdouts. “We want the Bailout or there’ll be hell to pay!” It was a classic top-down/bottom-up vise.
Congress caved and Bailout America was officially established. The result wasn’t perfect from the looters’ point of view. They’d had to compromise on those limits, deadlines, oversight.
But one year in Obama and Geithner are trying to finish the job. They’ve proposed, as part of the general package of phony reforms being bandied about, that Treasury war authorization be made permanent, that there no longer be independent oversight, and that there be no limits on time frames or funds conveyed to the Too Big To Fail rackets. When Congressman Brad Sherman, wanting to avert this “TARP on steroids”, asked Geithner if he could accept a $1 trillion limit on his discretion, Geithner flatly said No. He’s demanding complete bailout dictator power.
(All this comes as another TBTF corpse, GMAC, staggers up to the trough for the third time. It’s been a year since the crisis hit and two bailouts already for GMAC, a dog so decrepit and diseased that its own daddy, Cerberus, won’t put money into it. Yet in all this time not only has the administration done nothing to unwind and dismantle it, or any other TBTF entity, but every policy has sought to make them bigger, more unsustainable, to further concentrate them, further entrench them.)
You put all this together and it’s clear that this administration, beyond even the normal standard of corrupt government, is nothing but the hired thug arm of the bank rackets. This is the one and only priority. Bush was always rightly pegged as a childish warmonger who wanted to let big corporations loot the country. Obama was rightly questioned for running a vacuous campaign based on nothing but charisma and vaporous rhetoric. What would be the basis of an Obama presidency, and how would it represent Change from Bush?
Now we see that Obama represents not change from but the refinement of Bush corporatism. The core of his policy is delivering the country to the Wall Street racketeers as a mine and a playground. The pretext is the crisis, the vehicle is the bailout. Every other policy flows from this.
So the overthrow of democracy and institutionalization of looting remains the same, but it’s more focused, better organized. It has more of a sense of permanency.
Just as the Global War on Terror is intended to now be permanent (Gates and others consistently refer to the “Long War” and “our wars”), so the Bailout War will now be permanent. The GWOT represents the institutionalization of military Keynesianism (that is, the state as dedicated corporatist buyer to the military-industrial complex), the security- and prison-industrial complexes, and rising authoritarianism, fostered by the power of these complexes as well as by MSM propaganda. The astroturf teabaggers will supplement with street terror from below, if necessary.
Similarly, the Bailout War institutionalizes the government as primarily a loot conveyor to the finance sector (and, using Wall St as conduit, to other sectors and to the GWOT), while here authoritarianism takes the form of releasing the government’s fiscal powers from any democratic accountability. This will dovetail with the Fed’s existing anti-democratic unaccountability in its monetary policy, to remove the government from all taxpayer oversight and accountability.
Put the bailouts and the Global War on Terror together, see them being used to pursue the policy of resource fascism, and you have a complete precis of what this power structure intends to do in the coming decades of Peak Oil energy descent. It’ll be serfdom for an increasing majority, the looting of our wealth, labor, and blood, and the creeping totalitarianism which won’t be creeping much longer.
We’ll have come full circle to the original taxation without representation. After over 230 years we’ve come back to ground zero. American history must end here or start anew.


  1. Another fine piece, however, it is Brad (not Bart) Sherman.

    I think your analysis is correct about the intentions of the “elites.” We will see if the best laid plans of these rodents are successful in due course. I argue they will fail, but not necessarily because I hold onto the quaint notion that “We The People” will somehow find the fortitude to go well beyond e-mailing and phone calling in our discontent to a cowardly and corrupt Federal Legislature.

    Comment by Edwardo — October 31, 2009 @ 9:18 am

  2. Thanks for pointing out the typo.

    Yes, I also don’t think the people are likely to actively take back the country. That’s not the way things have historically worked even with better human material than we have here.

    This system will certainly fail. it will collapse of its own weight if nothing else. The way real Change comes is when the already untenable system can no longer command obedience, especially from the instruments of violence, or where these instruments themselves are collapsing. At that point, in a non-linear change, the people have the power fall back into their hands by default.

    There’s probably no way to precisely forecast when this will happen.

    In the meantime, the historical role of true reformers is to understand where normal “reform” cannot work, organize as those seeking true systemic reform (i.e. getting rid of the system entirely), educate as many people as possible, and wait for the vacuum.

    Comment by Russ — October 31, 2009 @ 11:34 am

  3. Good writing Russ, you build a good argument and use effective parallels (I like “hollowed out manufacturing”).

    And hi Edwardo, fancy meeting you here!

    Edwardo brought the rebirth of cold fusion to my attention. If you’re not aware of its potential ascension (ha ha) check it out (on a “60 Minutes” in April 09). Also very interesting in the energy arena is Black Light Power. Their site is worth a visit (www.blacklightpower.com). Energy is pretty much a solved problem, only our cultural and financial infrastructures are not yet ready to deal with the solutions. They would cause such upheavals.

    On hope and hopelessness, I’m with Edwardo — the big bad guys can only lose. They’re gonna win every battle and lose the war, to paraphrase Dylan. It’s the only way that part of this can play out. In the meantime, people who can communicate well must sharpen their skills, and from that, this request from me to you:

    Do you think you could knock something short and sweet together that explains the bankruptcy of the current system/situation, that even an uneducated Joe could understand? That would be a damned useful little thing to have. As I commented over on Naked Cap, there’s way too much over-complex theorizing, and not enough meat and veg explaining. I get the sense from your piece here that you might have the right stuff for such a task.

    You can find my email vial my blog if you’re interested. As I said to Edwardo yesterday, it’s time to do something. To whatever minimal extent I am able, I want to make the collapse as unmessy as possible. That means networking and organizing.

    Comment by Toby — November 2, 2009 @ 8:43 am

  4. Hi Toby,
    I’ve been meaning to start getting shorter and sweeter with some of my posts. I’m not any sort of formally educated finance professional myself. Besides, like you I think a lot of the technical detail obscures the big picture.

    So it never hurts to go through it all again, always honing the educational message.

    Along those lines, did you check out my categories-for-analysis post?


    Tomorrow’s post is going to be a run through most of the categories, with some pending examples.

    Comment by Russ — November 2, 2009 @ 4:40 pm

  5. Well said and all true, but I don’t think that what is now happening represents a fundamental departure from the merger of government and big business begun immediately after WW II. What has changed most significantly is the shrinking opportunity for outsider individuals to exploit gaps in the scheme for their own benefit, to build little personal islands in a sea of madness. That is getting harder and harder, particularly now that the financial system is entirely dishonest. Even those with substantial personal savings are now hostage to the next unexpected collapse by an allegedly sound company the financial statements of which gave no hint of its vulnerability because everything is off the balance sheet.

    We are approaching Ayn Rand’s society of pull. Those without it will be SOL. Rand was a lot smarter than the dewy eyed collectivists who dispised her.

    Comment by jake chase — November 3, 2009 @ 9:52 am

  6. I think the main difference is that from Bretton Woods through the next twenty-something years, the pie was still getting bigger, so the rentiers figured they could afford to share the wealth to some extent with domestic workers. It was co-optation and buying some political security.

    Lenin anticipated this development in Imperialism.

    But with the twin blows of the US oil Peak in 1970 and the debt run-up Vietnam entailed, which scared the Europeans into grumbling about their dollar holdings (and Degaulle into starting to demand gold), the power structure realized the pie was going to start getting smaller.

    We had the oil shocks and Nixon closed the gold window, the dollar was pegged to OPEC oil instead, petrodollar recycling and neoliberalism got rolling, debt exploded in the 80s, and everything was set for the real onslaught to begin with the fall of the USSR.

    So that’s what I think changed. The result is just like you said – a far more vicious Hobbesian/Randian world.

    You’re right about who’s smarter. I look around at activism and I see alot of good will but terrifying naivete. These people really don’t understand that the teabaggers are fascists waiting to be organized into shock troops.

    Comment by Russ — November 3, 2009 @ 10:51 am

  7. I no longer see any point in analyzing the politics of all this, and recent history does not go far enough back. This problem has occurred before, and is a natural recurring problem as the parasites run out of enough host to devour. Politics has become nothing more than the (almost) acceptable face of “big business,” which is the natural outcome of “free” market capitalism, or indeed any monetary system (in communism/socialism the State is merely more obviously seamless). The core issue is our relationship with scarcity, our piss poor understanding of human nature, centuries-old received wisdoms about all manner of supposed truths, and the consequent and inevitable calcified status quo reluctant, no, incapable of coping with change.

    Forget the politics, forget the bogus left-right bullshit, and focus on the commonalities. It’s time to come together, not further increase the gap between both sides of a tired old ideological war. What’s the point of perspicacity and pertinent erudition if you are unable to come up with anything better than: “We’re all fucked!” ?

    Solutions please…

    Comment by Toby — November 3, 2009 @ 11:08 am

  8. I agree that “left-right” has pretty much become meaningless where the entire system is in the clutches of corporatism. It’s really a form of totalitarianism as analyzed by Arendt, more a process than an ideology. Instead it just manipulates all ideological ideas towards its power goal, and in this case its profit goal.

    I’m afraid I don’t have “solutions” to fix the whole mess. I do think the politico-economic system is fucked, as is the resource situation.

    In the Peak Oil community it’s a truism to say none of this is a problem that can be solved, but a predicament which has to be endured.

    That doesn’t have to mean we all have to be fucked. The people who understand what’s happening and who have the will to do what we can, not to solve everything (which can’t be done), but to prepare (on the personal and community level), can politically organize toward:

    1. public education about the true state of our world;

    2. targeted policy advocacy;

    3. political preparation to provide leadership if and when the system collapses of its own weight.

    BTW, believe it or not some people sort of enjoy “analyzing the politics of all this”. The whole point of the political blogosphere is to open up a space of public freedom which hardly exists anywhere else.

    Comment by Russ — November 3, 2009 @ 11:52 am

    • The idea that a crowd will come together to dispense a better society hasn’t really had much currency since Lenin’s little experiment produced Stalin. I discovered at age 21 that my government was perfectly willing to kill me in order to bring Democracy to Viet Nam, that if I wanted to survive I had better turn my own efforts in that direction and reject the trumpets and sirens of flatulent patriotism. Today, at age sixty-six I realize my government wants to rob me for the benefit of those system insiders who keep those endless payoffs coming. I am pretty certain it is going to take all my intelligence to avoid being robbed. I think Flaubert was right about the mass of men being unworthy of anything but contempt. It keeps right on voting and electing these scoundrels and every individual is pretty much on his own. But I do enjoy reading your posts. Have you figured out how to make a score on these insights?

      Comment by jake chase — November 3, 2009 @ 4:51 pm

      • If you mean make a living, no. Not hardly. These days there’s not much demand for complete outsiders.

        I do keep repeating to myself Raoul Duke’s motto: “When the going gets weird, the weird turn pro.”

        At any rate, no crowd is likely to dispense anything of its own, but perhaps temporarily rush into the void when the system finally blows itself up. As we agreed before (I think it was you), it’s not likely to bring a better society anytime soon after that, except maybe in the sense of better than what it replaced.

        Comment by Russ — November 3, 2009 @ 6:44 pm

  9. Hi Jake,

    a resource-based economy strikes me as the best way forward out of this. I have had nothing like your experience, but nevertheless feel a powerful need to keep on keeping on. I don’t want to give in to despondency, and certainly don’t believe that the mass of men is unworthy. Judgements like worthiness and unworthiness are too arbitrary, too bound up in received wisdoms and untested platitudes. Culture makes man as much as man makes culture.

    That said I agree that no crowd is going to assemble and clearly express some solution upon which the world agrees. However, that won’t prevent me from trying to articulate a set of ideas that in my mind offers a constructive and pragmatic solution that takes as much into account as I can currently think of.

    We are approaching post-scarcity economics in my reading of things. Whether or not we make it or lurch into fascism I can’t say, I only know on which side I want to fight, in which direction I seek to apply whatever strength I have.

    What others do is up to them.

    And now, after typing, it strikes me your comment was aimed at Russ. Ah well. I’ll submit this anyways…

    Comment by Toby — November 3, 2009 @ 5:06 pm

    • As for the lurch into fascism, here’s two pieces I wrote this summer which give a basic rundown on what I think we’re up against.



      From what I gather, you might not agree with parts of these, but check ’em out if you want.

      Comment by Russ — November 3, 2009 @ 6:51 pm

    • Toby,

      You’re right, I hit the wrong reply button but concerning solutions I think the only solutions that ever work involve a set of rules which apply across the board rather than allowing annointed leaders to carry out master plans. We’ve allowed a small gang of insiders to get too much power and now the collectivists have an irresistible urge to finish the job in the name of the people, which always begs the question which people and with what purposes in mind? As for fascism, we seem to have the friendly kind, at least so far. Even the military now permits the cannon fodder to self select, which in the very long run may produce a salutary benefit in terms of natural selection.

      Comment by jake chase — November 3, 2009 @ 9:10 pm

      • “We’ve allowed a small gang of insiders to get too much power”

        That’s how I see it too, with emphasis on “allowed,” and that’s why my position is: it’s up to us. The system is so blindly and recklessly corrupt there is no other choice (other than despondency) than taking matters into our own hands. The challenge is to constantly find common ground broad enough and strong enough to take us onto the next phase of our civilizational development. That’s why I’m against concentrating on divisions, which are at base merely “divide and conquer” tactics from the powers that be. Why play their game by their bogus and irrelevant rules?

        I’m for making the state slowly and deliberately redundant, which would mean focusing humanity’s ingenuity on dealing with the problems of water, food, shelter, energy, transport etc., as design challenges, not political ones, nor even as financial ones. We face an existential challenge. A tool like money should not be allowed to stand in our way, let alone the left-right tribal bickering. We have the know-how and the resources, only the defunct system prevents us from joining the dots.

        Comment by Toby — November 4, 2009 @ 8:05 am

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

%d bloggers like this: