Three commentaries by Mumia Abu-Jamal on the economic crisis

from znet.org

Three on Economic Crisis

Oct 22, 2008 By Mumia Abu-Jamal


Behind the Money Crash
By Mumia Abu-Jamal

For millions of people, the economic crash and crisis seems almost mystical.

What happened? Why did it happen? How did it happen?

It seems more complex than it really is. That's because the corporate
media is, more often than not, a contributor to confusion, rather than
a source of clarity.

The media thrives on conflict, chaos and controversy.

That's why I found in the {British} left press what I've never seen in
the corporate media: the text of a 2002 open letter from U.S.
financier, Warren Buffett to his Berkshire Hathaway shareholders.
Buffett, one of the richest people in the U.S., warned his
shareholders to avoid 'derivatives'. which he described as "time
bombs, both for the parties that deal in them, and the economic
system."

Buffett explained that derivatives are financial agreements for the
exchange of money at some future date, which can be 20 years or more.
What makes them dangerous is they're collateralized, or guaranteed,
based on often faulty reference points. For example, derivatives may
be traded saying in 10 years, GM stocks will double its 2004 value,
and if it does in 2014, the instrument buyer will receive say, $10
million. In many cases, before the contract is ripe, not a penny has
changed hands, yet some companies assigned these instruments a value,
recorded them on their books as assets, when in fact, they had no real
value.

Remember Enron? On paper, they were rolling in dough. In fact,
however, they were rolling in paper -- for, at any time, if they hit a
snag, they had no real cash to cover corporate debts -- it was on the
books, but not in the banks.

Again, Buffett explained six years ago why these instruments should be
avoided, writing to his shareholders:

The derivatives genie is now well out of the bottle, and these
instruments will almost certainly multiply in variety and number until
some event makes their toxicity clean. Knowledge of how dangerous they
are has already permeated the electricity and gas businesses, in which
the eruption of major troubles caused the use of derivatives to
diminish dramatically. Elsewhere, however, the derivatives business
continues to expand unchecked. Central banks and governments have so
far found no effective way to control, or even monitor, the risks
posed by these contracts.*

In closing, Buffett warned, "derivatives are financial weapons of mass
destruction, carrying dangers that......are potentially lethal."

{Source: Labour & Trade Union Review (No. 191: Oct. 2008), pp.16-18}

Scare Tactics
By Mumia Abu-Jamal

With the passage of the Wall St. bailout bill, a major line has been
crossed in U.S. economic and political history.

The rulers can do anything, as long as they leaven it with fear.

Just like the Iraq War authorization, with enough fear Congress will
roll over, and say, "Uncle."

And there was an avalanche of fear. The corporate media sold oceans
of fear and dread, just as it sold facile patriotism, the Iraq War and
the so-called "War on Terror."

Using individual tales of fallen 401(k)s, or of a few firings, they
successfully insinuated that unless the bailout passed, you might lose
your job, or your 401(k) might turn to dust.

They ran the banner headlines of the drop of the Dow Jones Industrial
Average, and scared legislators into flipping their prior no votes
into yea votes.

Here's the deal. What we've seen from both major political parties is
the greatest transfer of public wealth into private hands in history.
Indeed, it is privatization run amok.

It is a bailout, pure and simple, that the media and its masters want
you to call a 'rescue', but who is rescued?

You? C'mon.

Does a government that facilitated the loss of millions of jobs; that
scuttled public education; that gave away the public treasury to Wall
St. bankers; that sold a long war based on lies; that allowed millions
of homeowners to fall into foreclosures, give a damn about you?

A government that cared about its people wouldn't have led them to
this disaster.

Think of it this way: the same government that fought for months to
privatize social security, or in other words, to invest peoples'
retirement funds into stocks, came up with this bailout plan.

If the government was successful, some 40 million people (those 65 and
over) would've been flat broke. What they couldn't do one way, they
did another, for the economic hole that another trillion dollars will
blow into the deficit spells danger to this project.

If you elect a government based on its rhetoric of anti-government, of
deregulation, of the 'blind hand of the market', you get economic
carnage, crony capitalism, and misery for millions.

Moreover, what you have is the privatization of the State, by its
rental by private capital.

For, in both houses of Congress, in both major parties, we find pols
who have received tens of thousands of dollars from Wall St. Can
anyone deny that this money donated to Congress was wasted? (By
'wasted', I mean to those who made those donations -- not to average
Americans).

As the saying goes, 'you get what you pay for.'

It might also be said that you get what you vote for.

{Note: Check out www.opensecrets.org for data on Congress for sale.}

Fall of the House of Capital?
By Mumia Abu-Jamal

By the time you read this the $700 billion bailout will have been old
news, one of the biggest transfers of wealth in history.

But it will not heal that which ails the nation as it trips and
stumbles like a drunken sailor on shore leave.

The reasons are simple.

For the problems are systemic, built into the rapacious nature of the
machinery humming all around us. The Rube Goldberg-like contraption
of democratic forms at the service of the financial services industry
is a bottomless maw, a gaping mouth that is never sated.

Why was there no alarm when millions of people lost their homes to
foreclosures made inevitable by variable mortgage rates? When
millions lost manufacturing jobs to low paying service gigs? When
living standards crumbled, and when take home pay fell to 1973 levels?

Where was the alarm?

There was no alarm -- for this was the 'blind hand of the market' at
work, the leveling way of globalism, the new world order moving
through, preparing the way for the triumph of capitalism uber alles.

Few were the politicians who gave voice to this immense social
suffering. Fewer still used their power to try to assuage their pain,
for they too were drunk on the wine of globalism.

But when the ripples spread upwards, from the foreclosed homes to the
foreclosing banks -and from the banks to investment houses, Congress
stirred from their drunken stupor, and rang alarm bells loudest.

"It's an economic 9/11!", some bellowed; "It's a financial tsunami!",
yelled others.

When Americans were hoodwinked into ruinous sub-prime loans, and
millions were faced with foreclosures, where was the alarm?

More importantly, where was the help for those who were endangered?

Nowhere. Nowhere.

If they helped them the present economic crisis would've been mitigated.

Instead, we're in a situation where a scam artist sets up shop in a
street-corner, playing a fraudulent 3-card monty hustle, and along
comes a cop. The cop, instead of rousting the scam artist, rifles the
pockets of every passerby, and delivers the stolen loot to the
scammer.

The scam artist, of course, is the financial investment houses; the
cop, of course, is Congress -- and you are the passerby, hustled and
robbed by both of them.

Karl Marx and Friedrich Engels wrote, 160 years ago, that the State
was but the executive for capitalist. After what we are all seeing,
who can doubt it?

The Empire is crumbling.