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Banks Got Bailed Out, We Got Sold Out
It was nearly half a century ago that Noam Chomsky, in his book “American Power and the New Mandarins,” described the Pentagon as a “Keynesian distribution device.” What he meant was the Pentagon is an integrated part of the American economy that provides products and financial support to American industry. In fact, the myth that the American economy functions via free markets serves capitalist extraction but is a completely misleading description of reality.
The wars in Iraq and Afghanistan are wars over resources, primarily oil. In the minds of war architects they may serve a broader geopolitical purpose, but that purpose is at its core economic–maintaining a ready supply of oil for multinational oil companies. The wars were estimated some years ago to cost several trillion dollars. This amount is to be borne by taxpayers, not to mention the human toll in lives and lost possibilities. Another way to phrase this is: “oil companies and military contractors got bailed out, we got sold out.”
When the bank bailouts began in early 2007 (earlier than the press has reported) they came at the end of nearly five decades of myth building about the American economy. They also came late in one of the greatest periods of capitalist extraction in history. Fifty years ago American workers produced most of the finished goods and services that we consumed and they were paid a proportion of what they produced that allowed a growing majority to live middle-class lives. Today American workers still produce most of what we consume but the wages increasingly go to a small group of economic elites who control the government through open graft and our national conversation through media ownership.
And the truth hidden in plain sight is the last thing the Koch brothers, Goldman Sachs, Exxon Mobil, Verizon or any other large corporation wants is free markets. All of these businesses were built on research funded by social wealth, products developed with social wealth, military excursions paid for with social wealth (and the blood of others) and bailouts funded with social wealth. The most effective revolution possible would “free” these organizations from the yoke of government by withdrawing social support and letting them fend for themselves.
The rest of the world has had few illusions about where American wealth comes from. The CIA has long functioned as an oil mafia undermining democratically elected and democratically functioning governments to control oil for private interests. The American military has been a tool of private American interests for most of its existence. And these government agencies are economies unto themselves receiving “black” budgets over which there is little oversight or accountability.
The bank bailouts fit neatly into this history—the transfer of social wealth for the purported purpose of providing a necessary economic function to the American people, the extension of credit. At an earlier period in history this claim might have been slightly less absurd. In the American economic system debt is money and money is debt. The problem today is that we’re full up on bank loans. Reviving private credit today only serves to further wealth extraction when debts cannot be repaid.
Despite their place in the national mythology, banks are only artifacts of this epic of capital consolidation. They are not the only, or even the main, protagonists. Were the banks to be successfully resolved, turned into utilities that do, for the first time in fifty years, serve a public purpose, the other modes of exploitative extraction would live on (e.g. the military). And the current critique of banks rests on the complaint that Americans are now being treated like America has long treated the rest of the world—like colonized citizens. For the benefit of the rest of the world this realization is probably a good thing. But or us, it is a rude awakening.
In reality, there was no resolution to the last crisis save bridging what could have been a temporary gap in banker bonuses. Many multiples of what anyone could ever pay has been gambled and only one banker need stub her toe or cut himself shaving and the gamble will be lost. The international financial system is as fragile as it has ever been and the only effective resolution before the next crisis hits would require rearranging the existing economic and political orders. This will not happen while so few are receiving so much of our social wealth.
Many bankers understand this. The race is on to take what remains before the next crisis erupts. News reports have the banks hiring private security forces, the new Pinkertons, to squash rebellion before it gains momentum. The surveillance state, built at our expense, is the servant of the bankers and corporate leaders. The bankers and corporations are the state. And even if one wanted to sit the next historical epic out, that option will be at the behest of history, not a choice that can be made by any one of us.
So, what to do? Step one is to stop contributing to our own demise. Strike May 1st. Strike May 2nd. Strike May 3rd. Strike until the power of economic extraction and exploitation is eliminated. Recognize that most of us have more shared interests with the poor and middle classes in other countries than we do with bankers and corporate executives in the U.S. Recognize that the values that the bankers and corporations have handed us are not our values, and are not even human values. Recognize that bankers and corporate executives can’t grow their own food, build their own houses, educate their own children or provide their own healthcare. Without us, they can’t do anything. Strike!
Rob Urie is an artist and political economist in New York.