Smashing Capitalism
Somewhere in the Hamptons a high-roller is cursing his cleaning lady and shaking his fists at the lawn guys. The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system. Incredibly enough, this may be the first case in history in which the downtrodden manage to bring down an unfair economic system without going to the trouble of a revolution.
First they stopped paying their mortgages, a move in which they were joined by many financially stretched middle class folks, though the poor definitely led the way. All right, these were trick mortgages, many of them designed to be unaffordable within two years of signing the contract. There were "NINJA" loans, for example, awarded to people with "no income, no job or assets." Conservative columnist Niall Fergusen laments the low levels of "economic literacy" that allowed people to be exploited by sub-prime loans. Why didn't these low-income folks get lawyers to go over the fine print? And don't they have personal financial advisors anyway?
Then, in a diabolically clever move, the poor - a category which now roughly coincides with the working class -- stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that "it's no secret that many customers are running out of money at the end of the month."
I wish I could report that the current attack on capitalism represents a deliberate strategy on the part of the poor, that there have been secret meetings in break rooms and parking lots around the country, where cell leaders issued instructions like, "You, Vinny -- don't make any mortgage payment this month. And Caroline, forget that back-to-school shopping, OK?" But all the evidence suggests that the current crisis is something the high-rollers brought down on themselves.
When, for example, the largest private employer in America, which is Wal-Mart, starts experiencing a shortage of customers, it needs to take a long, hard look in the mirror. About a century ago, Henry Ford realized that his company would only prosper if his own workers earned enough to buy Fords. Wal-Mart, on the other hand, never seemed to figure out that its cruelly low wages would eventually curtail its own growth, even at the company's famously discounted prices.
The sad truth is that people earning Wal-Mart-level wages tend to favor the fashions available at the Salvation Army. Nor do they have much use for Wal-Mart's other departments, such as Electronics, Lawn and Garden, and Pharmacy.
It gets worse though. While with one hand the high-rollers, H. Lee Scott among them, squeezed the American worker's wages, the other hand was reaching out with the tempting offer of credit. In fact, easy credit became the American substitute for decent wages. Once you worked for your money, but now you were supposed to pay for it. Once you could count on earning enough to save for a home. Now you'll never earn that much, but, as the lenders were saying -- heh, heh -- do we have a mortgage for you!
Pay day loans, rent-to-buy furniture and exorbitant credit card interest rates for the poor were just the beginning. In its May 21st cover story on "The Poverty Business," BusinessWeek documented the stampede, in the just the last few years, to lend money to the people who could least afford to pay the interest: Buy your dream home! Refinance your house! Take on a car loan even if your credit rating sucks! Financiamos a Todos! Somehow, no one bothered to figure out where the poor were going to get the money to pay for all the money they were being offered.
Personally, I prefer my revolutions to be a little more pro-active. There should be marches and rallies, banners and sit-ins, possibly a nice color theme like red or orange. Certainly, there should be a vision of what you intend to replace the bad old system with -- European-style social democracy, Latin American-style socialism, or how about just American capitalism with some regulation thrown in?
Global capitalism will survive the current credit crisis; already, the government has rushed in to soothe the feverish markets. But in the long term, a system that depends on extracting every last cent from the poor cannot hope for a healthy prognosis. Who would have thought that foreclosures in Stockton and Cleveland would roil the markets of London and Shanghai? The poor have risen up and spoken; only it sounds less like a shout of protest than a low, strangled, cry of pain.
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Also underlying Ms. Ehrenreich's observation is the fact that the market for credit-worthy folks is both mature and saturated.
So banks, in order to keep meeting their quarterly targets / enhance shareholder wealth / make a bigger profit, needed to find another market. Fast.
The bright side is that banks don't break your kneecaps when you're late.
- Maedb
They would if they could get away with it.
Some do.
No indeed. They just take your house!
Yes, the present business model of constant growth is just like a cancer on our society. We need a new model.
In related move to undercut the monied class, 40 million poor Americans voluntarily went without health coverage, striking a blow against the medical capitalists.
First of all you don't need health insuranceto get treated, period. YOu go to the ER they treat you.
Seocnly that number is vastly inflated, it is less than half that---12-20 million of which are illegals, people who have broken in and don't belong here. (But they get treated free on our backs.) The rest are wealthy peopple who pay cash and youngerpeople who choose not to buy insurance. Government inteference has already doubled the cost of health care.
REad THe Cure (thereis also another book about how capitalism can save health care, but I forget the title and author.
GB,
The ER is for EMERGENCIES ONLY.
Anything else they turn you away.
And you STILL owe the bill.
PLEASE provide links.
We're SLIGHTLY interested in you OPINIONS.
VERY interested in your FACTS."
"choose not to buy insurance"
True. When I lost my job I WAS offered COBRA. $358/month. See the problem? "Lost job. $358/month"
And MANY who HAVE jobs, even 3 or 4, can't afford insurance. Pre-existing condition? Sick child? Screw you, buddy.
Please, I'd LOVE to see sources for your propaganda.
(Doesn't Fox Nudes provide links?)
Thanking you in advance.
So, how many people should be without access to complete basic health care (not this ER nonsense)? What's a number you can live with? 20 million? 10? 1? Read THIS: http://dic
Hell, yes. Take whatever the rich have. They got it by using someone else's labor to get the money. There is no great, urgent need to have a class of people who spend more per month on clothes than a family of 5 ever earns in a year.
There is no great, urgent need to have a class of people who spend more per month on clothes than a family of 5 ever earns in a year
wow. brava, i could not have said it better!
That would the inner city welfare people who are spending someone else' money.
If you look at it, wealthy people, except for celebrity libs, don't generally buy clothing every month. They buy well made, classic items and keep them for years.
....and couldn't do it without the shared infrastructure either....
ny-bo
Anything one ownes beyond the necessities is the owning of slaves.
Than Que.
So you have no TV, no radio, no car. YOu just have a couple blankets and a few groceries?
Actually what you buy provides jobs. If you buy acar, auto workers have to makke it and someone gets to own a gas station--not to mention mechanics.
Obviously I was making a point.
Even though, in all reality, every time one goes to a restaurant to eat a $30 meal, 100 African children die from neglect.
I don't like it either.
And yes, I USED to have a few things.
You have no more right to take anything from someone who is "rich" *(which is relative, our POOR have more than middle class Europeans )
than you do form someone who is poor. Either way, you are a robber
That's DEFINITELY not true. Take a look at the housing, heath care and retirement policies in Europe. There you have a right to a home, free health care and a chance to live securely in your old age. Not so here!!! Just wait until YOU retire. It's just swell to wonder if you will be living on the street in a few years at age 75 when your retirement savings run out.
You are so off in everything you claim. Go back to writing Opeds for the NYT. What you lack in credibiblity you make up for in arrog-ance and hubris
I think what Ms. E. is saying is that we haven't quite made it to the tipping point just yet. Not, at any rate, to a moment that the poor and middle class of Bolivia reached when Bechtel decided that it "owned" the rain that fell from the sky over that nation. But it is greed's nature to drive the people to just such a moment. Sometimes I am tempted to think that corporations like revolutions; they enjoy seeing mobs of people rising up in fury. This is no surprise, though: the corporation lives on enmity; it is its only sustenance.
One alternative to open revolt, however, is opening before us. Consider how a property or product-based version of P2P networking would look. Before you laugh, consider that the P2P pheonomenon has thrown the RIAA and all its component corporate entities into complete confusion, disorder, and frustration. Lower middle-class people are attracting lawyers to represent them in further undermining the RIAA's hegemony and threat-based strategy. This sort of thing could be done with property and real goods as well. A popular book among the geek set has termed it "the starfish phenomenon".
now we're talking...
http://www
i would like to add that each & every one of us by participating in said forum are contributing to the starfish phenomenon and thereby rewriting the rules of the game.
Sparxafire!
I LOVE how you have couched this situation, Ms. Ehrenreich. I have been wringing my hands for a long time about this very situation. I don't shop at Wal-Mart, but on the other hand, I can't afford it. I can't get them to hire me either. I have a bachelor's degree in journalism and more than 25 years of experience as a professional writer and I don't know where my next house payment is coming from. Cheers!
Maybe you should go back to college and get a teaching certificate. There is a huge demand for teachers. There are tons of jobs out there. Good luck.
Great idea! And he can get a LOAN from the robber barons so he can pay for it plus just a little interest, of course. Geez, some who "have" have not a clue what it is like to "have not" - not even enough to go back to college - which is one of the great all-time rip-offs invented by edu-hucksters, by the way.
Where I live that requires going deeper into debt by going to college for a few more years, to get a job that will barely pay for that investment. All the teachers I know have to work another job, even if their spouses are working.
Until this country wakes up and realizes that education of every single citizen, up to and including doctoral work and/or vocational training to prepare them for the real world, is implemented, we are doomed.
The system penalizes the poor for being poor, and the right has fully demonized them.
Yea-it's only 30 to 40 grand a year-surely you can come up with that, to get a job where you can be fired if your students don't pass the national exam, and you make less than the average postal worker and in many cases don't get benefits until you've been on the job for two years.
I do second the good luck though-and note that this is becoming more and more common.
I would love to be a teacher. I have a fulltime job that pays much more than a teacher. I still couldn't afford the cost of tuition unless I took out loans. I'm not sure what I would live on if I went back to school. I suppose I would need a fulltime job. Oh, I have one, but I don't have the time. I could quit my job and lose my health insurance, take out school loans to pay my tuition, get a dick job to pay my health isurance, quit sleeping, fail my classes from exaustion, and get buried in loan payments when I'm done. Just the person you want to teach your kids.
b-corr,
Don't you worry your pretty little head.
After all, s/he can always eat cake.
OK? (Dry your tears, broomstick cowboy.)
What a great blog - hits the nail on the head !!!!
Excellent post! Thanks!
Rob from the rich and give to the poor. Is that your angle? There is no system on earth that has managed to rid it's nation of poor unless you count Cuba..wher
You're right, there is no way to eliminate poverty. But every economic system where it was designed so that only a pitful few has prospered at the expense of the rest have failed too and miserably.
Laisse Faire (the 1700s equivalent of pro market) was the mantra of French aristocrats till the guillotines of Place Du Concord happened in 1798.
From my history books, I could never understand the fascination of the French lower classes for the public guillotine until the Enron collapse. Learning what those executives did to their own employees gave clarity to the joy of chopping off heads.
I fail to see only a few who have prospered within The United States. If you are addressing those with three homes and a yacht...th
No, the poor will never go away. At least 10% of any given population is going to be poor no matter what you do. But when a vast percentage of this country is a single paycheck away from living on the streets then something is wrong. Fundamentally wrong. To point to other countries where there is worse poverty or to point out that a few of our citizens are able to do reasonably well by global standards is a red herring at best.
It's not about robbing frmo the rich to give to the poor. It is making sure the rich don't steal the poor blind and then finance their seeing-eye dog at 29.9% while lining up their "assets" for foreclosure. For a supposedly "Christion nation" we are remarkably facile at exploiting those least among us.
To steal a famous line: Have you no shame, sir?
Well said!
I don't remember who said it, maybe Andy Rooney, who spoke of the lack of shame in our leaders today. As children we were taught to behave in order to not shame ourselves or our family. That no longer seems to be the case. Winning at any cost has replaced shame as a value system.
It's not about robbing or stealings, Americans are just going to have stop believing they can have anything they want without sacrifice or patience. Hey, just use your credit card and feel better now hate yourself later.
.
Plus, no one exploited these sub prime borrowers, it was their own greed in most cases.
Very well said. Kind of gives you a good picture of the so called "evangilical right".
Sounds like Republican bile to me, Drill. I suppose there is no one in America who works hard and is poor? Wow. The system is working just fine FOR YOU. But millions of Americans beg to differ. Working hard for a big company DOES NOT equal being compensated, jerk.
Amen, to that, Were.
Rob from the rich!? By not buying products from union-busting multi-cong
There's no Robin Hood advice in this column Drill. When the people are not being paid a wage that allows them to purchase the same products they are selling, or manufacturing, there is a problem in the economy. When the real estate market is in the dumps for as long as it has been, because of unaffordable housing and predator lending, there's a problem Drill. I'm glad you think, "the system in the U.S. is working just fine," but perhaps you should clean your glasses, or open your eyes, or leave your upper-middle class white neighborhood, once in a while. All is not well.
Maybe you should do some research on the state of affairs right before the great depression. You may see some similarities to the present in: wealth distribution, dubious lending practices, Government failure to regulate the free market, an unstable stock market... eh, I guess it must be nice to think everything is working just fine. Keep your head in the sand.
No one wants to rob the rich... but the rich robbin the poor isn't fair either.... and that is what's been going on for years!
No, who mows YOUR lawn?
No, who mows YOUR lawn?
One of my best friends for the last 15 years mows my lawn. Since I've retired I have plenty of time to do it myself. But I just can't fire my gardner...
Sorry. I do want to rob the rich. They've robbed long enough.
This is more of a national problem. The number of millionaires per capita should be some indication. The US has 8.3 millionaires per thousand capita, compared to the world overall, which has 1.3.
...and they're controlling the mass population.
So lets make a law that it's against the law to be a millionaire. And then we can be like the rest of the world where you all think it's so much better to live.
The millionaires per capita in the USA are due to the opportunities available to the hard working, clever, ambitious, and lucky. Capatalism built this country as someone identified a need to be filled and got rich because of the idea, or worked their way up, or just seized the moment. Somewhere in that mix is a former poor person, too. We constantly hear about the poor, less much less, about the efforts by this country to ease their burden, i.e., welfare, food stamps, ER healthcare, elderly discounts, utility breaks, charities, scholarshi
Capatalism is the driving force of the USA and will continue as long as the democrats' drive for socialism fails. Criticize and rail against capatalism all you want, but it is the provider of jobs, lifelines, and opportuinities that will prevail. And pull along the ones not making it.
You're right CaseyBabes. Capitalism is a strong driving force and despite many a fevered, fearful conservative nightmare, maybe .0002 of the country wants to replace it.
What has been shown over and over again, is that the market is far from perfect and that corporate America does nothing with a conscience unless there is a profit or a fine involved.
Don't forget that these are the same people who bleated that the price of seat belts, air bags, unleaded gasoline and gas tanks that wouldn't explode would be the downfall of the American car industry and therefore American capitalism as we know it...and as discovered in internal memoranda later on, if the price were a few thousand dead kids, then so what.
Please keep in mind that capitalism can only function within the rule of law (see capitalism
Capitalism is a great system. I just wish we would try it some time.
ps--learn to spell.
What a fool you are. Capitalism has been allowed to run rampant, with few checks and balances. What's needed is a laundry list of checks and balances to keep pure Capitalism, which is as ugly as pure Communism, from ruining this country.
one thing is sure... education takes a back seat in "Capatalism" - but no matter, look at those great jobs it provides (the ones where you don't have to know how to spell)
Keep fooling yourself--it makes you feel better.
What is being left out is the fact that poor people in the US are probably more than 8.3 times richer than the poor in these nations. Actually from what I have seen many of the poor here would be LOADED in many countries. So if corporatis
And so the poor in US get to live the same bare sustanence life as the poor in a third world country Because everything here costs (8.3% more?).I'd like to know your sources. Are they based on wage difference only. Or is actual buying power figured in?
I don't buy this at all. I gave up "don't worry be happy" as a philosophy a long time ago.
Which shows how easy it is to become a millionaire here if you apply the right principles. The problem is we have a welfare class that goes shoppoing and spending all weekend every weekend. Instead of spending all that money if they invested it in even US savings bonds, they would come out ahead.
Or they could invest it in a course to learn a better paying skill.
I am a long time fan of Ms Ehrenreich not just with her books such as "Nickel and Dimed to Death," but way, way back with her articles in The Atlantic and Harper's.
I never had much use for real estate agents, and those predatory lenders are Harpies who must have flown out of one of the lower rings of Dante's Inferno. But I can remember a couple of years ago in one of those telegenically phony "Town Meetings" the President's saying that every American has a right to own his own home. Yeah, right. Was this just another sop thrown to the banks and the financial institutions, who'd already tricked most of the country's citizens into a lifetime of credit card debt?
I never had much use for Wal-Mart's, either. Not only do they put Ma and Pa type stores out of business, their vaunted "lower prices" lull poor people into thinking that we really can afford to buy merchandise. But Wal-Mart actually coerces manufacturers to outsource jobs overseas, such as China, so by shopping at
Wal-Marts you can actually shop yourself out of job.
I'm glad it's all backfiring and crashing down
on the oligarchy.
I believe home ownership percentages are way up. What is wrong with giving people a chance to own their home???
because, with the way these loans are set up, it apparently comes with the chance to default on them big time.
Giving them a chance to afford their own home would be a lot more productive.
Nothing is wrong with giving people a chance to own their home, as long as it's a fair chance--one they can actually afford.
All this short-term home ownership is Bushshit's way of making the economy appear normal in the US. It ain't even close to normal.
I don't know about you, but I was MUCH BETTER OFF ECONOMICALLY 7 years ago than I am today. Thank you, Bush Crime Family for ruining my country and my bank account. And I'm a middle class home owner with no credit card debt.
The sub prime loan is the new millennium version of the red-line mortgage. The chance to own is great but at what cost?
I'm all for giving people a chance to own a home, but having a mortgage is not the same as owning the home. The bank owns the home until the mortgage is paid. All these sub-prime loans with creative lending structures are not giving most people a chance to own anything. Add to that the inflated appraisals that increase taxes and price people out of starter homes and you have a morally reprehensible situation.
ONly partially. Manufacturing cheap junk is not where the highest wages are In this coutnry this is a job primarily for illiterates, very undeveloped areas, teenagers and people who don't speak English.
You get a skill, auto mechanics, computer programs (even something as simple as MS office) and you will make more money. These are primarily starter jobs
And so the reality deficient right speaks.
I though I smelled a wiff of Rome burning when I saw Gary Coleman on TV advertising loans at 99% APR! Isn't deregulation great?
It's not the car that causes a crash, it is the "nut behind the wheel"! To quote: "Somehow, no one bothered to figure out where the poor were going to get the money to pay for all the money they were being offered" ... Firstly, it was not the poor but the working middle class who are facing the brunt. Secondly, why did these "poor" take the money?! Someone's offering you money which you know you have to pay back and you know you are "poor", and you take it?!
The stock market/dotcom boom had people running around with $$$ signs where their pupils ought to be. It crashed! did we learn our lesson?! Apparently not!
It is not Capitalism which is at fault, it is "greed" and the burning desire for "instant gratification"! There is a reason why most lawyers in this Country are ambulance chasers; a lot of people would rather get rich with a lawsuit than upgrade their skills and work hard for their monies!
If we stop chasing the proverbial pot at the end of the rainbow, we will not be in so much trouble. As the saying goes: "get thee behind"! Practice it ... preach it ...
Has it ever occurred to you that the basic motivation behind Capitalism IS greed? Greed is essentially the desire to have more than you need, and the basis for instant gratification is persuading people that they "need" things they don't actually need. Capitalism depends on both; it would collapse if it couldn't continue to grow, and the stimulation of greed and the creation of artificial "necessities" are necessary to keep it growing. Remember, the motto of Socialism/Communism is "To each according to his (or her) NEED; from each according to his (or her) ability."
Capitalism created and maintains the proverbial pot at the end of the rainbow.
What a sad, SAD comment. Do you KNOW any poor people? I think not, or else you would have never asked such a silly question as: why did the poor people take the money? As Maslow taught us, when one is poor and doesn't have his/her BASIC needs met, that person is unable to see past their IMMEDIATE circumstances and become "self actualized
If you love capitalism then learn to regulate it. Unregulated capitalism inevitably grinds to a halt when a few have everything and the masses have nothing. I here this frequently from commentators. There is nothing wrong with the system. Our troubles are caused by greedy poor people. Or ignorant poor people. Ignorance is the belief in unregulated capitalism.
The underlying premise in capitalism is that individual acts of greed collectively create the common good -- Adam Smith's so-called invisible hand. Neo-nuts ideologues, posing as ecopnomists have taken this premise and pushed it like Ayan Rand on steroids and it is now the dogma of economic policy, and the underpinning of political philosophy.
Problem is, every time we run this experiment of unleashing unconstrained greed, it comes out the same: wealth gets concentrated among the few, and Thorstein Veblin notwithstanding, they can't spend eonough to float the economy. When wealth is distrubted, people buy food and necessities; when it's concentrated, it gets invested in wealth creating insstruments such as stocks. But if all the money is invested in creating stuff and none is left for the masses expected to buy it, that's not good for the economy. That's why in the 30's we were burning massive piles of food while people starved. Production was great -- consumption? not so good.
This should be clear by now, but greed blinds.
Result? Unjust, unfair, and immoral economy, and eventual economic crash.
One of my blogging-comment themes is oversight. For capitalism, regulations are also needed. Why? In my view, capitalism works because it mirrors the weaknesses of the human spirit (it is not based on an ideal, some perfect plan that can never be achieved). At its core, it is avaricious, there is nothing ethical about it. Ethics come from the individuals involved, and as we know, many of them are sadly lacking in that department. Society needs to control capitalism (regulation) and have watchdog groups (oversight) to keep it reasonably fair. The Bush administration is doing everything it can to reduce oversight and regulation, and very importantly, Bush is lacking in his ethics. Bottomline, I think the big C is perfect because it is imperfect, as are humans. Humans will never live in a perfect world. We will always have issues but we must let people do what they are inclined to do, and regulate their activities as necessary.
On reflection, another comment about the big C and materialism. I invite you to take a look, (there are many photos) at "Material World" by Peter Menzel. For me, it is obvious that material possessions are not necessary to happiness. This brings up other thoughts (new inventions, progress etc) but those are off-topic.
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