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Wednesday, October 01, 2008


What's behind the financial crisis?

There may or may not even be a "real" financial crisis; for all I know it's been completely manipulated. But for sure there is a real foreclosure crisis, and obviously that has in turn caused some problems for those who did the lending. So the question is, what's behind that? Michael Moore says it's the lack of universal health care, and that also may or not be true. But even if it is, behind that we ultimately get to the root cause - not the banks, not subprime mortgages, not health care, but manufacturing.

John McCain, George Bush, and a host of other capitalist boosters have repeatedly told us over the years that "the fundamentals of the economy are sound." But that was, and is, nonsense. It's only a bit of a caricature to describe the average American city as a collection of cookie-cutter malls filled with identical stores in which we sell each other clothes, electronics, and fast food. But that's not a self-sustaining system! Somewhere, someone actually has to be mining, growing, sewing, assembling, and otherwise producing all those things; just selling them or at most cooking them and selling them isn't enough. And, with millions of manufacturing jobs lost in industry after industry, it should be clear that the fundamentals of the American economy are far from sound.

And this leads us directly to the current crisis. Because with millions of people unemployed, millions more underemployed, and many millions more underpaid or uninsured even though working, of course there are millions of people who can't afford houses, can't afford health care, or can't afford anything beyond a Happy Meal. And until the system which allows employers to troll the world looking for the most desperate workers who will work for the lowest pay is ended, any short-term fix like the proposed bailout will remain just that - a short-term fix. No "changes in the rules" for lending and such can possibly fix the underlying, long-term problem - the severe crisis of manufacturing.

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