A NOTE ON THE CURRENT MARKET VOLATILITY
FOR A MORATORIUM ON MORTAGE FORECLOSURES
FORGET DONKEYS, ELEPHANTS AND GREENS- BUILD A WORKERS PARTY!
In a commentary earlier this year I argued for a moratorium on home mortgage foreclosures as a defensive act on behalf of the ‘little people’ who were being squeezed out by their inability to pay the adjustable interest rate hikes that came with many such housing loans. That call is still appropriate today. Obviously this demand has nothing to do with the fight for socialism, as such, but if we had workers party congressmen or senators we would have them submit such legislation to Congress. Moreover, I believe that we would also want to introduce legislation for regulation of the unchecked financial services industry that has wrecked havoc on the backs of working people, wittingly or unwittingly. Since I first argued for the moratorium the fallout from the bad loans and other problems that have trickled down as a result has created an extremely volatile, and potentially destructive, economic situation for working people who depend on credit to make ends meet. Thus a couple of notes on episodic economic fluctuations seem appropriate.
I make no bones about the fact that I am not an economist, Marxist or otherwise. My relationship with the ‘dismal’ science of political economy is weighted toward the political end not the economic one. Oh sure, I have read Adam Smith’s Wealth of Nations and, of course, Karl Marx’s Das Capital and some of the commentaries on these works. Thus I have a sense of the classical underpinning of the capitalist mode of production but as for the various instruments, especially the financial ones, which drive the day to day modern capitalist economies I admit my ignorance. In my defense I would argue that while some Marxists had better study these workings (just not this writer) getting caught up in the minutia of the capitalist mode of production is not decisive. If one assumes, as I do, that the capitalist mode of production has played out its progressive historic role then the real fight is not over the ramifications of the day to day fluctuations of the market but the need to overthrow it-a political question. The capitalist mode of production, its operators, apologists and hangers-on need to be pushed out-there is no other way.
As if to underline the above sentiment I have been recently reading Irving Howe and Lewis Coser’s History of the American Communist Party that I will review in this space later. The most interesting section of that work concerns the ‘third period’ Communist International strategy and tactics. This policy, that held sway from about 1928 until 1935 as the official international line, was predicated on a ‘final collapse’ of capitalism. For those not familiar with the period this is the time when the Communist International was calling virtually any non-Stalinist politcal formation ‘social fascist’. The most famous, or rather infamous, result of that strategy was the refusal of the German Communists to unite with the Social Democrats to form a workers united front in order to fight off Hitler’s advances in the early 1930’s. We are all painfully aware of the results. The point for today, and I have seen it come up enough to note it, is to not directly tie general economic trends with political action. If not opposed and defeated the capitalist will muddle through one way or another. Thus, in the end the economic issues dominate but in the meantime it is about politics.
As a kind of subset of that last idea the fact that many of our ‘people’ are being squeezed to the wall by today’s credit crunch would seemingly create conditions for a fight back. Right? Alas, in the short run those affected are too demoralized to fight and the next layer above them is afraid they are next so economic downturns do not necessarily favor militant political action. Along this same line I would note, however, that their ‘people’ –the capitalist investors, jobbers and brokers are not going to the wall on this. It is our ‘people’ who wind up with the bad credit record, monetary losses and loss of whatever sense of self worth home ownership brings. To dramatically bring this point home a recent article in the financial section of a Boston newspaper highlighted the demise of one of their ‘best and brightest’ capital managers who had to close his financial operation at the end of July when the creditors clamored for cash. This manager was no ‘fly by night’ operator but had been a star in the management of Harvard University’s 29 billion dollar endowment fund (now 34 billion, as of August 23). This brought many rewards among them a nice house in the very exclusive town of Wellesley, a suburb of Boston. At some point this manager left Harvard’s management team and went out to run his own financial operation and snagged 500 million from the Harvard endowment to work with, among other high end clients. When the crash came this operator had to close up not however before losing 350 million dollars of the Harvard endowment and smaller sums for other clients. His response- a heartfelt e-mail message of sorrow to all those who had lost money through his poor management. Yes, I can see the tears streaming down your eyes after hearing this story. Not to worry though- he is NOT losing his house. Enough said.