Nationalize The Banks

13 Sep

Benjamin Franklin’s famous definition of insanity as “doing something over and over again, and expecting different results” reflects our complacency and failure to substantively act in the wake ‘great credit crash’. In a Saturday, Sept. 12th article in the New York Times titled “A Year Later, Little Change on Wall St.” banks still sell and trade unregulated derivatives, despite their role in last fall’s chaos. ” The contradictory and suicidal nature of our banking establishment have revealed the shallow “state of exception” that we have lost and, it beckons us to remember in order to prevent another collapse.

According to Webster’s dictionary , Profit is defined as: 1) A valuable return; or, 2) the excess of returns over an expenditure in a transaction or series of transactions; however, in Das Kapital, Marx’s corresponding definition of profit offers a more salient definition and critical definition of profit as accumulation of surplus-value of capital. As later Marxist theorist Ernest Mandel describes it in his introduction to Marx’s “Capital: volume one”:

” Capital is thus, by definition, value looking for accretion, for surplus-value.’ ‘But if capital produces surplus-value, surplus-value also produces additional capital….The basic drive of the capitalist mode of production is the drive to accumulate capital” (pg. 60).

Therefore, the accumulation of capital (i.e. profit and expansion) through this byproduct of the market is familiar to capitalism, however, it has manifested itself upon us as built on the backs of a slave society of debt an hazardous trading.

In capital, Marx postulates that the only difference between the capitalist mode of production and the older slave societies is the extraction of surplus value. It is all involuntary; in the current market there is no choice, to buy our houses, go to school, and in many cases pay medical bills we have to go to one of the three big banks: JP Morgan Chase, Wells Fargo, and Bank of America.

That exploitation stems from the unregulated markets. The financiers have their hands in every facet of our lives, they lend us capital and manage our individual capital that we need for the simple production and reproduction of our lives. When we invest and when we save and when we attempt to improve our standard of living that is the capitalists’ profit. In his article on Saturday the 12th, on the unregulated financial market, Ralph Nader illustrates the ‘accumulation of surplus value’ in life insurance policies:

“The bankers plan to buy ‘life settlements,’ life insurance policies that ill and elderly people sell for cash–…depending on the life expectancy of the insured person. Then they plan to ‘securitize’ these policies…by packaging hundred or thousands together into bonds. They will then resell these bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.”

The concept of “biopolitics” conceived by Antonio Negri and Michael Hardt adequately describe the seizure of the means of production in the 21st century finance markets. Mr. Nader is describing the seizure of raw biopower, which will essentially allow them to profit, and thus as Marx presumed, the world of finance is built on slaves to debt & biopower. The reason for this is clear: greed.

The problem is deregulation, ever increasing greed, and our public and individual complacency. The solution diverges from the socialism of global capitalism in the form of nationalization. Yes, I am suggesting that we must nationalize the banks.

In the United States there would be lawsuits, smears, and Wall street would howl with displeasure, however, for the people the nationalization of the banking industry would allow us to get the regulations we need, in addition to having the direct and public accountability that completely contrasts our powerful, unregulated and unaccountable banks.

According to the New York Times’ interactive information supplement, there are key reforms that are on the table but the majority of them have not been acted on. A few of the reforms include: on mortgages, (the House version has passes and the Fed has adhered) to ensure that borrowers can pay back loans, thus banning sub-prime loans and simultaneously banning steering towards them (i.e. yield spread premiums); on home foreclosures, allowing bankruptcy judges to lower the payments on homes so debtors can afford to keep them; on regulatory powers, allowing the FDIC to seize and liquidate any financial institution, and require hedge funds to register with the SEC, and most importantly, give the Fed the right to oversee major financial players. These reforms have been enacted on a significantly marginalized level or tied up in a debate within congress and amongst the factions of the ruling class. These reforms are singular points but, if we were to have a “banking reform bill” that nationalizes the finance industry as they have done to a limited extent in our Western European cousin countries then we can begin re-developing our communities.

In times of crisis “Disaster capitalism” (per Naomi Klein’s landmark book, “the shock doctrine”) expedites the program of the right and their wealthy benefactors, but where is the pragmatic Obama administration? Why hasn’t he undertaken his own ‘disaster reformation’? According to Paul Street’s landmark book “Barack Obama and the Future of American Politics”, he states: “His top contributors through April 2007 included investment bankers Goldman Sachs (number on at $571,330 for the year 2007), UBS AG (number three at $364,806), Lehman Brothers (number seven at $318,467), and JP Morgan Chase (number four at $362,207)”; one truism in U.S. politics is ‘follow the money’.

In summation, if we don’t take a firm hand with the banks then the banks will eventually fail us. The establishment is not advocating for us, thus why movements like the “Bail Out the People Movement” are essential; innovation is explicitly radical, and this is the time for radical innovation. The left must pursue both an institutional and outside approach within our strategy because, there are no messiahs on high, and the grassroots has its dysfunctions yet, there’s a high probability for revolutionary change during a disaster.


2 Responses to “Nationalize The Banks”

  1. brenda c September 13, 2009 at 9:19 PM #

    fine article, serious content…but i’m afraid the american banking system will never truly be nationalized…it was put together by scoundrels, scaliwags and profiteers and thus will it ever be!!!

  2. cliffpeaceleft September 13, 2009 at 9:22 PM #

    Remember, the popular movements I mentioned! Change, real positive stuff cannot come from a top-down process but, a bottom-up process (i.e. my last paragraph).

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