What killed the Soviet Union was the collapse of its economy. For too many years the Soviet government invested exorbitant sums in its military-industrial complex, furiously struggling with the United States in arms and space races neither could afford. When a nation's investment is nearly entirely vested in instruments of death, the needs of the public will always remain underfunded and unmet. As the economy collapsed and the Soviet public found access to services and goods severely restricted, the human mass arose in self interest, wresting power from Communist control.
Another antecedent, an edifying event, exists comparable to the current state of the stock market and capitalism's current, but sudden and dramatic, global economic downturn. One can see similar conditions existed after the crash in 1929. The market crashed resulting from a domino-like failure of banks. Those bank failures occurred because the Treaty of Versailles imposed punitive war reparations upon the Germans following WWI. The Germans could not pay the debts, meaning other nations could not pay their debts, and soon banks failed worldwide.
Prior to the 1929 bank failures in the United States, the wealthy elite encouraged speculation in the market. They played the average investor into over investing, creating an epidemic of greed. The biggest corporations and wealthiest individuals survived the disaster because they saw calamity coming and sold high, starting the run which led to the crash. This climate in the investment profession, arising because greed was allowed to reign un-reined, rewarded the wealthy and punished everyone else. Regulation's necessity was obviated by the circumstances of the crash. Capitalism and the "free marketplace" had to be reined-in with consumer and public needs protected by regulations and oversight.
In order to provide the most basic, humanitarian relief to the unemployed public, FDR and Congress found their only recourse lay in introducing modest encroachments of socialism. These encroachments included government programs designed to help feed and house the poor. However, like the Soviet Union, FDR found the best avenue to guaranteeing more universal employment lay in government funded projects like the TVA and Hoover Dam, where the U.S. became an employer and a planner of economic activity in similar ways as did the Soviet Union at the same time, though to a far reduced degree of influence and authority. In this way, FDR helped put some Americans back to work while advancing genuine domestic interests.
The current stock market collapse might best be considered within the framework of a much broader set of influencing factors than pundits and talking heads on television currently offer.
1- For far too long, the American economy has been dominated by the concerns of the military-industrial complex. The underfunding for (and consequent continual erosion in the quality of) schools, hospitals, health care, road construction, research into alternative energy sources and maintenance of infrastructure, reveals the devaluation of the individual's quality of life as its consequence. One economic factor which arose can be seen in the reduced availability of funds for minorities and the economically disadvantaged, another in reduced government assistance for entrepreneurs and start-up businesses.
2- Deregulation of industries like banking, securities and real estate gave greed a green light to repeat the mistakes of previous eras. Regulations had been enacted to protect the public from the kinds of calamities we currently endure. Politicians are funded by lobbyists to promote the policies most beneficial to multinational corporations and super wealthy individuals. Those politicians, promoting the agenda of those lobbyists and their employers, re-framed the public perception of self-interest away from protecting the public from corporate greed into a view that removing the restrictions of rules means a level playing field. Nothing could be further from reality. In a deregulated economy, the biggest bullies have all the advantages and Republican economic ideas with and since Ronald Reagan have done nothing but provoke the cannibalistic feeding frenzy from the voodoo economics still practiced by the Bush Administration and promoted by the Republican Party. Past scandals like the S&L bailout in the late '80s and the associated Keating 5 scandal and conviction, in conjunction with the ENRON mess and the dearth of ethics in Washington should have served as sufficient warning that the entire network of our financial interests and businesses were potentially at risk and that more regulation, not less (as John McCain has promoted over and over again with his voodoo economics supporting, Republican cronies) was required.
3- The American economy is more myth and sleight of hand now than concrete entity. There was a time when the GDP measured the Gross Domestic Product of a nation. That economic indicator at least attempted to measure the actual purchasable products made by a national economic unit. However, today it denotes Gross Domestic Profits. As an indicator, it measures very little which is tangible.
Once, the American economic machine was the world's foremost producer of post-WWII industrial and manufactured goods. The GDP was our indicator of our earnings in the world's marketplace from goods sold worldwide. The economy and the worker were strong because of the necessary relationship between a corporation's need for workers to produce products and that corporation's ability to compete on the world stage. Today's corporations are not vested in the workers of any nation. Corporations' strength was once vested in the American workers' ability to out-perform any other nation. Now, corporations are only interested in finding the least expensive labor force. The global economy gives multinational corporations a monopoly on the current economy, all of which is precariously balanced on the scales of international debt.
Furthermore, today's American economic interests are mostly vested in services such as the insurance, banking, medical and legal professions, as opposed to making products. Economists do not bother to determine how much of our economy derives from the making of actual products, how much derives from the transportation of products to markets, and how much is just pure paper. They have created the GDP, as in Gross Domestic Profit to hide from the public that a truly viable American economy no longer exists.
Consider the size of the national debt, the pervasive accumulation of individual debt, and that nearly every business in the United States is cash poor and continues to operate because of business loans, government subsidies, grants and credit card debt. In the current climate of rampant banking institution failures, every business in the world will be affected negatively as profits decrease. As profits shrink, jobs will be cut. As jobs are cut, fewer consumers have funds with which to purchase goods and services. A cycle of economic futility and disaster winds into inactivity, and the economy will spiral downward out of control, just like after the 1929 crash.
4- The global economy is a pipe dream of multinational corporations and super wealthy individuals designed to centralize all wealth into their accounts and which is doomed because it, and every economic factor currently affecting our world, cannot continue long into the future. Fundamentally, the global economy is based on the idea that goods can and will be produced anywhere they can be produced (economists and pundits fail to mention the additional codicil - with the least expenditure of costs) and shipped to the rest of the world's markets for delivery to "hungry consumers." The entire idea runs right into the face of climate change. We cannot keep shipping vast networks of product all over the world with dwindling oil reserves because we will run out of oil and we must also factor in that the continued level of usage of fossil fuels will destroy the viability of the climate and our habitat. All this shipping has to stop. That means every locality must learn to produce all its needs locally, including food. Common sense dictates this, yet few perceive the immediacy needed to convert to locality-based economics.
5- Corporate growth impinges its necessity upon capitalist dogma. The global economy cannot keep expanding. Market shares within the global economy cannot keep expanding, either. This planet is finite place, with finite area and finite resources. The more rapidly we use those resources, the more quickly our offspring will arrive at a time when those resources will start to dwindle (consequently encroaching on their quality of life). Eventually, the resources will disappear, right along with their quality of life. Furthermore, as we voraciously consume today, we alter the climate, poison the seas, dry up the last remaining glaciers (the source for nearly all drinking water on the planet), pollute the environment and undermine the viability of the entire planetary ecosystem which is an interdependent and interconnected, cohesive whole.
6- All political interest and economic aid is aimed at propping up businesses and industries which cannot, and will not, last long into the future. This is a time when science informs us on a daily basis of additional indicators that climate change is speeding up and becoming not only a certainty, but more certainly of greater intensity and duration as each day we add to the accumulation of greenhouse gases in the atmosphere. It has come to light that the warming trend our planet is enduring has already caused warming during the period between 2005 and 2008 to a degree which scientists had not anticipated occurring until 2070. Our leaders do nothing to correct our course, change the focus of the public, draw down both the demand for products and the demand for accumulation of wealth, convert to clean energy sources, provide clean fueled and accessible mass transit for every large city, or devise and invent economic models which can be viable into the future.
Because power vests in the wealthy, the wealthy determine the ethos of society and the political agenda of the government. Both are funneled in the direction of maintaining the status quo and increasing the wealth of the already wealthy. What is becoming more apparent is that multinationals can see the end of their day coming, so they apply courses designed to drain the economy (read, you and I and every other worker/consumer) of every last penny possible as a hedge against an uncertain future.
Clearly, all government bailouts are designed to protect the currently existing (failed and failing) corporations and preserving dinosaur industries which have no viable futures in a world of scaled-down production to avert excessive carbon emissions, and scaled-down shipping to facilitate additional carbon emission reductions. This is the case because these are the people who use lobbyists to grease politicians' votes and whose campaign donations get politicians elected. Economic bailouts only postpone the inevitability of those companies' demise while simultaneously saddling future generations with tax burdens, the payment of which will never result in the accrual of any benefits to those future taxpayers. Consequently, there exists no moral right to saddle future taxpayers with the debt from this bailout.
7- Nearly all economic units operate in debt. The payment of interest on debt is counterproductive to facilitating the allocation of future sums for research and development. All that happens is each new generation marches off in search of more and more zeros after a one (thousand, ten-thousand, hundred-thousand, million, billion), and unfortunately, they cannot see that all those additional zeros just add up to nothing, nothing except more waste, more pollution, more disease and illness, more suffering, more poverty and more war, all the result of more greed.
8- Overpopulation continues unabated. We cannot now adequately feed, house, clothe, care for medically or employ the roughly six and three-quarter billion people currently on the planet. The huge mass of us drain the earth of its resources. We cannot continue to grow our numbers (which is required under current economic theories in order to perpetuate corporate growth and national economic growth) and survive. More and more people means more and more waste, pollution, war, famine, climate change, poverty and misery.
If the voting public of this nation allows Congress and the President to walk arm and arm into the banking industry bailout, that public is dooming itself to a fate worse than what was experienced during the Great Depression. Those banks are still going under; this plan may delay the outcome for another few months to a few years, but it does nothing to reverse any of the negative trends, nor any of the underlying causes. In the meantime, the "bailout" will rob the public of the funds necessary to insure the maintenance of a reasonable quality of life. The government will use your tax dollars to save the bank accounts of their cronies by buying the homes of the people who no longer could afford those homes because of the banks unethical and immoral business practices which exist to promote corporate greed and/or because those individuals lost their jobs due to corporate downsizing, fueled by the same corporate greed.
This plan is just a band-aid for the wealthy while everyone else runs off to the blood bank to donate. You cannot cure a disease with a band-aid and you cannot reverse an economic downturn by treating symptoms of the problem instead of addressing the actual problems. Republicans have told the public innumerable times that the free marketplace will always correct itself. Yet, in the instances when their cronies' finances have been at risk over the last 20 years, they have taken steps to save failing corporations from airlines to steel companies to automakers and on and on. Clearly, their hypocrisy is financially motivated. Let the failures fail.
What the government owes the public is not to save the banks and lending institutions. What the government owes the public is to protect a reasonable standard of living. We stand at a crossroads, not only for our economy but also for our environment. A saner path actually presents itself, but no one seems to see it.
As millions of people sit idle, unemployed, we do nothing to convert our power needs to clean sources. Proper solar paneling a home enables most homeowners the ability to get off the grid. With gas prices soaring and carbon emissions strangling the atmosphere, a real need presents itself for cities to provide clean powered, efficient, mass transit. We funnel almost $100 billion a year into a war in Iraq, while our schools, hospitals, roads, water, health and welfare systems all remain, more than underfunded, nearly unfunded.
Rather than bailout the banks, investment firms and corporate giants, the government should pull out of Iraq, devise plans to "Re-Green America" by investing in modernizing infrastructure, incorporating the latest strategies in energy conservation and recycling as well as solar and wind power, employ the public in mass transit projects and power conversion remodeling and retrofitting projects, encourage more commerce to reflect a "produce and consume locally" ethos to replace the failed global design so we can cut superfluous emissions along with transportation costs and employ people locally to produce their own needs. In a "local-focused" (as opposed to global-focused) economy, no individual's labors can be spared, so everyone is employed in the cooperative effort involved in a communities' thriving.
In a cooperative local-focused effort, loans will become unnecessary. In a world with scaled-down appetites to accommodate the need to abate the effects of the coming climate change and co-exist responsibly with nature in the future, credit and banks and finance lose their importance. The world must learn that the illusion, this paper economy based on moving numbers through account columns, even the silly concept called money, cannot buy security after all. What I am suggesting is that the government must invest the American publics' tax money in the American public. I am opposed to re-investing it in the greediest men in our nation who allowed their greed to destroy our economy.