A neighbor of mine asked me what to tell his right wing friends who say socialists just want free handouts from the government.
I said: tell them the Big Banks just got over $7 trillion in handouts from the government and the Federal Reserve. At the current rate that equals about 100 years of handouts to the poor. Right now we have socialism for the rich and capitalism for the poor. When the poor make a mistake they suffer. When the rich make a mistake they get a government bailout.
But there’s more, I said.
You are a musician. I’m a writer and painter. We both have disabilities. You are blind. I have a lot of broken bones, chronic fatigue, and BiPolar II. You give away your music for free in churches and old people’s homes. I give away my writings for free in blogs and podcasts and letters to the editor and ebooks. And I give free access to my paintings online. We both make people happy with our art. We both work, but we don’t get paid. We don’t sit around on our asses smoking dope. We both work hard at what we do. And we both get food stamps and Supplemental Security Income, S.S.I. And that is what your uniformed right wing friends would like to stop.
Speaking for myself, both as a writer and as an artist, I would love to have a fully functioning publishing company, so I could publish my books and prints of my paintings. I started a publishing company nearly 20 years ago, but in that time I have never been able to find any investors for my business. Why?
I’ll tell you why.
Something happened to Capitalism.
30 years ago capitalism still worked. At that time banks did only two things. 1) Lend money to people to buy houses and cars. 2) Lend money to businesses to buy raw materials and tools to manufacture shoes and cars and everything else we still made back then. That’s it. Two things.
At the same time there was (and still is) something called the Commodities Futures Markets. These commodities markets brokered buy and sell futures contracts for things like corn and bacon and copper.
They worked like this: Before a farmer even planted a seed in Spring he set about to estimate how much he could afford to spend on necessities like fuel and fertilizer and farm equipment. So, in March, he tried to lock in a price at which he would be able to sell his corn in November. And someone, let’s say a buyer for Kellogg’s Corn Flakes, wanted to lock in a price at which his company could buy corn in November, so they could keep the mills running without uninterruption, stamping out corn flakes. A commodities broker collected a commission for putting together a contract between the farmer and the corn flakes buyer. Simple stuff. It stabilized markets. There was no panic buying or selling. Everybody was happy. And the same thing happened for jet fuel and copper and bacon and lots of other actual things. Producers and consumers signing futures contracts at the Commodities Exchange in Chicago. And yes there were speculators buying and selling, but they were buying real things like corn and copper and jet fuel, and when these contracts came due they had to actually take delivery of these commodities. So they had skin in the game.
Then the greed heads in New York City decided they wanted to get in on the action. But why limit the trades to real things like corn or copper? They could sell futures contracts on anything! They could take bets on whether the dollar would go up or down, or the Irish economy would collapse, or even if the Mets would win a championship. Anything.
And the good thing was, there was no formal Exchange to keep track of their trades. Nothing like the Commodities Exchange in Chicago that kept price-discovery open and transparent. These so-called “derivatives” were just side bets between two people anywhere on the globe. The whole thing was opaque. Nobody knew what was going on, or where it was going on, except the people involved.
Right off the bat there were worries about this shadow banking casino. Senators and economists started clamoring to create an exchange where derivatives could be registered and traded openly, so everyone could observe the trades and the so-called free market could set the prices. But President Bill Clinton and his financial goons Robert Rubin, Larry Summers, and Alan Greenspan, stepped in to calm the waters. The idea of a Derivatives Exchange was laughed out the door of Congress. The Commodities Futures Modernization Act allowed derivatives to be traded in a shadow market where conmen with computers made the rules. The Financial Futures Market was launched.
The Financial Futures Market runs parallel to the Commodities Futures Markets in a shadow banking economy that has many times over outstripped the Commodities Futures Markets in dollar amounts of investments. By how much? We don’t know for sure because there is no Exchange, no record keeping. But we do know this financial casino has sucked the money right out of actual investments in actual things.
And as if that wasn’t bad enough, the Big Banks got jealous. They wanted in on the action. So they got President Bill Clinton to overturn the Glass Steagall Act that had kept commercial banks separate from investment banks – the banks that gave loans separate from the banks that made investments. And what have we today? A so-called bank like JP Morgan Chase or Goldman Sachs earns 17% of its profits making loans, and the other 83% on speculation. The loan-making is just window dressing, to make it look to us rubes like they’re good guys.
And the bad news for me is that the money to make loans to small businesses, or investments in small businesses, has dried up. The investors who may have invested in my publishing company or in Billy the Musician, have disappeared into the Shadow Banking world of derivatives and speculation – computerized trading for fast bucks in which no new wealth is created.
Why invest in a new artist or author or musician when you can make a killing speculating in oil and gold? Our country has lost its way. Lost what made it great. It has no way to value anything except by how much money is assigned to it. It has no way to put a price tag on the pleasure people get from seeing my paintings, or the insights they get from my writings. No way to value Blind Billy playing his piano in the old folks home, making some crippled old dodgers happy for a couple hours.
Capitalism does not have a mechanism for investing in value, investing in “Quality” as Robert Persig called it in “Zen and the Art of Motorcycle Maintenance.” So this is why Billy and me are on food stamps and SSI. And why we are not ashamed to accept them. Call us socialists. We don’t care. We work every day producing value, and the country we live in is too corporate-controlled to invest in our value in any other way than labeling us cripples and giving us handouts.
What really SHOULD be happening is that derivatives should be taxed and all financial market transactions should be taxed so that the Wall Street assholes who stole away our potential investors pay the fucking freight for having this daily value produced by us, in an economic landscape where NO value is being produced by them. They are raping and hollowing out the entire economy on bailouts paid for by the same right wing nuts who blame us, the starving artists, for gaming the system and wanting a free handout.
Other people like the art and music we make, they just don’t have any way to pay for it, or invest in it, now that the Wall Street turds have commandeered all the money. So let the turds pay for it. Tax them. Tax all of them. Spend the money on things of value. Spend the money on people.