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The Rope Has Been Sold

August 13, 2011

The Capitalists will sell us the rope with which we will hang them.

-Vladimir Ilyich Lenin

RIP Uncle Sam, 1776-2012

At this late hour, I think we are all beginning to realize that unchecked capitalism can only end this way.  Ironically though, it won’t be the great communist threat that ultimately undoes capitalism, but capitalism itself.  Weren’t there people along the way that warned us of this?

“These capitalists generally act harmoniously and in concert, to fleece the people.”

Abraham Lincoln

“Capital is dead labor, which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks.”

Karl Marx

“Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.”

Bertrand Russell

The Wall Street Journal interviewed Dr Nouriel Roubini in which he really explains in simple terms how the system is nearing self-destruction.

Vodpod videos no longer available.

WSJ:  So you painted a bleak picture of sub-par economic growth going forward, with an increased risk of another recession in the near future.  That sounds awful.  What can government and what can businesses do to get the economy going again or is it just sit and wait and gut it out?
Roubini:  Businesses are not doing anything.  They’re not actually helping.  All this risk made them more nervous.  There’s a value in waiting.  They claim they’re doing cutbacks because there’s excess capacity and not adding workers because there’s not enough final demand, but there’s a paradox, a Catch-22.  If you’re not hiring workers, there’s not enough labor income, enough consumer confidence, enough consumption, not enough final demand.  In the last two or three years, we’ve actually had a worsening because we’ve had a massive redistribution of income from labor to capital, from wages to profits, and the inequality of income has increased and the marginal propensity to spend of a household is greater than the marginal propensity of a firm because they have a greater propensity to save, that is firms compared to households.  So the redistribution of income and wealth makes the problem of inadequate aggregate demand even worse.

Karl Marx had it right.  At some point, Capitalism can destroy itself.  You cannot keep on shifting income from labor to Capital without having an excess capacity and a lack of aggregate demand.  That’s what has happened.  We thought that markets worked.  They’re not working.  The individual can be rational.  The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else’s income and consumption.  That’s why it’s a self-destructive process.

Who would’ve thought that the dirty fucking hippies were right yet again.

And who does this main-stream, well-respected, and world-renowned economist blame for our current situation?

Vodpod videos no longer available.

George W. Bush

Now having absorbed all of this, keep in mind that Roubini is the guy who accurately predicted the 2008 crash and the following housing implosion clear back in 2005.  He was roundly dismissed as a kook and labeled “Dr. Doom” for his efforts.  I’d say he was completely vindicated.

The fact that he isn’t the number one guest on every Sunday talk show every week speaks volumes as to why we’re in this mess in the first place.

Nuff said.

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2 Comments leave one →
  1. Peter John permalink
    August 19, 2011 8:50 pm

    He is right. As a larger and larger portion of the national income goes to the rich, demand will decease and with it the economy will shrink. This shrinking will be use to further justify lowering wages and cutting taxes to the rich. This cycle will continue downward until we are as poor as Haiti. Or we lose our mind and kill the fuckers.

    • August 19, 2011 10:45 pm

      Sadly it seems some things may be inevitable, such as capitalism’s self destruction. We can only hope that another civil war is not. I’m not sure the world could take it.

      Thanks for stopping by Peter.

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