In studying any social process, the student must first set events within their proper context, their proper epoch. This requires order of facts, chronology, historical context and events, and a logical summation of evidence.  This is basic to understanding social phenomena. 

People emerge to make contributions within a specific epoch, under certain conditions, and circumstances.  What is that general historical epochal flow? Where does our race/class/gender/generation/culture fit within it? Understand the flow of each epoch so that you know what to do as conditions run their course.  We have established in earlier works what has happened in history and why this economic crisis is unlike any before in the history of capitalism.  This is not a recession, it is much worst than even a depression.  Prepare.

First, fundamental transitions in history are never smooth, they are extremely jerky and uneven and never all the way completed.  Based on summarized history, logic that is, they however are predictable.  There is generally a huge leap forward and then some back sliding, regression, degeneration, and outright rottenness.   The basics should be known by now:

1. In modern US history (1492-1865), necessity drove a group of white royalty-paid-pillagers out of Europe and around the world to seize from other places what they could not produce when their feudal economic system was in decay. 
2. Their ruling classes, race, and male gender fundamentally built nations out of stolen land and the kidnapped labor of tens of millions of Africans.  Industrial innovations were made and applied in emerging agricultural sectors that promoted their ability and expanded their capacity to carry out more pillaging, kidnapping, theft, and working to death of hundreds of millions of nonwhites worldwide. 
3. Hundreds of years passed with millions of innocents being mutilated, brutalized, and worked to death build white slave, feudal, and capitalist societies around the world. 
4. As a result of these bloody, global invasions and indescribable destruction of human life, profits soared for the class of western, white, wealthy men who (1) organized a process of production reflective of their image and interests; (2) created and fulfilled market demands through hemispheric systems of consumption and distribution; (3) established a basis and standard of exchange (gold/silver/tobacco/paper money); (4) and put into place institutions and white supremacy, Aryan Model" ideology to promote the reproduction of their class and race. 
5. In sum, the accelerated forward advance of white civilization took place essentially because of the accelerated regression of African land, labor, and natural resources.

So, every economy is an expression of first human need for food, clothing, shelter, education, health care, transportation, security, recreation, family reproduction organized around the society's social system and taking on the cultural reflection of the race/ethnicity/history of the population inhabiting the land. 

This economic, social, and cultural system is controlled by a ruling class/race via a political system welding the instrument of state government, guided by a slavemaker's constitution (which allowed for any murderous inhumanity to Black humans), enforced by brute military force and Patriot Acts, and usually greased (made acceptable) with a mystical religious brew of afterlife deception and fear of gods and saviors who always look like the ruling race and act like the ruling class.  

The political system determines the quality and even the quantity of life via a social system's institutions (education, health care, law, mass media, family, religion, science, culture, recreation, sport, etc.). 

So, who gets what and how much they get is no accident; it is not by chance that the poor are poor and the rich are rich.  This is all planned, set up, designed, forged at the very founding of the nation.  Instead of using robots to enrich humans with leisure time and freedom grow intellectually and spiritually the robots are used for the profit of a few and the mass unemployment of millions.  Today, the labor-replacing technology became more sophisticated and handled more technical tasks. As it did, skilled manufacturing workers, semi-skilled service workers and white collar workers all have found their jobs disappearing.  Ford, GM, Chrysler, Fedx, Dell, HP etc., know that robots are now atleast 12-15 times more productive and profitable than humans.  With profits/the bottom line being their only goal, mass layoffs/buyout of workers are therefore inevitable, and discriminating.  Blacks are first to be sent to the streets, permanently, but all unprofitable workers will ultimately get pink slips. 

Banking, the insurance industry, clerical and secretarial work, communications, retail and various government agencies are all taking advantage of electronic technology to cut costs and "downsize" their workforces. Just one example illustrates the trend. Commercial banking and thrift institutions eliminated almost 814,000 workers between 1981 and 2007, or 41 percent of their workforce. Estimates are that by the end of 2010 over 95 percent of banking transactions will be made by automated tellers, eliminating human workers almost completely. Neither are mid-level managers and upper level executives immune. Better paid workers - those making at least $65,000 a year - account for three times the share of lost jobs than they did in the early 1990s.

As managerial positions are eliminated, these workers find their one-time advantages in the job market have disappeared. They can go months or even years without finding work, some ending up working temp jobs for $6.75 an hour at places like Sears, Target, or Wal-Mart trying to make ends meet.  Try to pay a $1275 house note with that wage.  Then you should understand what is really fueling the foreclosure crisis.  

Competition demands that computer automated machine production be continually expanded to every part of the economy even at the risk of increasing the new class and the roots of revolution. The United States government cannot and will not care for these workers--- it no longer needs its labor. It has no concern for these human beings (except to stop organized rebellion), because they are not making profits for the economic system, and therefore, have no value to the capitalists in the social system.

Vote, Then What?

People will tell you to vote.  Sure vote.  It requires, if you are Black and live in a poor neighborhood, extra time waiting in line, and a few minutes in the voting booth.  Then what?  Watch your furniture being put out on the street or the re-po man dragging your car away? 

Today, certainly, an administration can accelerate the pace of draining the resources of the country to feed the corporations-undermining civil liberties with patriot acts, terror, prison, wiretaps, spying and threats. But, the process is broader than any particular institution or government.  Ruling class rich people (billionaires)  are less than 1 percent of the US population but own 73% of the nation's wealth/real estate.  Obama, Clinton, or McCain must work within the context of this reality. Look at what they have done so far.  Nothing but pander to the rich/capitalists who fund their campaigns.  Look how the Black masses live in their home states.  Look at the rates of foreclosure, poverty, homelessness, hunger, dropouts, schools boarded up, closed hospitals, medical aid cuts.  Then appreciate the role they have accepted---managers of the ruling class's profit guarantee. 

With the Congress, Courts, and Chief of State engaging in deregulation of economic activity, including the gutting and non-enforcement of protective legislation and rules; privatization of public goods and services; and fiscal policies that distribute tax benefits upward and tax burdens downward, useless wars that innocent men and women do not need to be in, closing failing schools instead of fixing them, building prisons instead of creating livable jobs/incomes, deferring to future generations payment on a historic debt and imposing budget cuts that result in the dismantling of the public health and social welfare system---this system is being drained for capitalist profits at all cost.

Presidents can slow, accelerate, or go with the flow of this process/historical trend.  To compensate for the declining rate of profit, productive capital flows to where the wages are lowest-from the U.S. to India, from India to China jobs that American workers once had for $25.00 hour are being parceled out to low wage global workers for $2.50 per hour.  The state protects capital and its full and free flight across national borders-starting wars, arranging loans and investments, enforcing trade agreements that hijack entire economies and throw millions off their land or out of work, and so on.

1. In the current period, robotics and computer automated machine production is aimed at the total elimination of manual labor.
2. In so doing, even mechanized machine based factory labor is being thrown down to the level of manual labor and manual labor is being pushed out completely.
3. Millions are losing their jobs and livelihoods---homes, cars, food, clothing---everything. 
4. Today, the impact of technological change also has definite race, class, gender, culture and generation implications. 

The same ruling class that owns the means of production and fervently pursues ways to cheapen production, also organizes institutions of health, education, welfare, law, politics, recreation, military, religion, and criminal justice according to a stratification system that favors members of its race, class, gender, and culture. 

FEDs Bail out Capitalists not those Foreclosed

Today, a very small select group of bankers control the Federal Reserve Bank, which, in turn, controls the financial centers of the economy through loans, interest rate adjustments, and money regulations.  The state and its military guarantee the best possible conditions for the accumulation of wealth in the hands of the capitalist class.  Non-elected institutions (e.g., the U.S. Federal Reserve, the World Bank, central banks, the International Monetary Fund, etc.) manage global economies, set exchange rates for currencies, and finance public debt here and all around the world.  They see the losses mounting.  They are now taking money from taxpayers to fund the bailout of large banks and other financial institutions which will fail, be bought up piecemeal, and end up in monopolies.

During the US housing boom, the sub-prime market expanded significantly. As US interest rate rose over three years, sub-prime borrowers could no longer afford their monthly payments, causing them to default on loans. Millions of others lost their jobs. Banks had packaged up these loans into financial instruments known as collateralised debt obligations (CDO) and sold them on to investors.  Demand for CDOs collapsed as the scale of defaults emerged, leaving banks nursing huge losses.  

The Feds stepped in with interest rate cuts, and bailouts for bankrupt hedge fund gamblers who happened to be betting with billions of what are now taxpayer dollars who are now responsible for the bill.  The investment bank, Bear Stearns, was forced to seek emergency funding from the US Federal Reserve last week and was sold over the weekend to JP Morgan Chase for a tiny fraction of its earlier value.   In short, the Fed has agreed to take over up to $30bn of Bear Stearns' assets, removing the risk for JP Morgan.

Other banks would not lend it money over fears that it had too many bad debts due to the sub-prime mortgage crisis.   In a fire sale, JP Morgan bought them for $2 dollars per share when they had been valued last week at over $70 per share. 

The quick sale failed to calm investors' nerves who, this week, will receive earnings announcements from other big US investment banks, including Lehman Brothers, Goldman Sachs and Morgan Stanley. On Sunday, the US Federal Reserve reduced its discount rate - the interest rate at which banks lend to each other - from 3.5% to 3.25% and offered to buy up the assets of other troubled banks.

Recent Major Bank Losses (as of March 2008)

Citigroup: $21bn

Merrill Lynch: $16.5bn

UBS: $14.6bn

Morgan Stanley $11.3bn

HSBC: $3.7bn

Bear Stearns: $30.1bn (bought out for $2 per share)

Deutsche Bank: $3.2bn

Bank of America: $3bn

Barclays: $2.6bn

Royal Bank of Scotland: $8.8bn

Freddie Mac: $7bn

JP Morgan Chase: $5.4bn

Credit Suisse: $2bn

Wachovia: $3.2bn

IKB: $2.9bn

Paribas: $321m

Case in Point: recently the Federal Reserve did something unprecedented. The story goes, two hedge funds managed by Bear Stearns failed last summer, setting off a credit crisis that has swept up banks and brokerages around the globe.

The rescue came from JPMorgan Chase & Co. and, in an extraordinary step, the Federal Reserve, both rushing to pump new money into the venerable Wall Street firm after its financial state deteriorated so much in a 24-hour period that it threatened to fail. Bear Stearns stock lost nearly half its market value, about $5.7 billion, in a matter of minutes, and pulled the broader market down with it. The Dow Jones industrial average fell nearly 200 points.  So, their logic is that if Bear Stearns were to go under, it has the potential of bringing down the whole market.

Today, the fundamental demands of the ruling class involve adjusting to the changes in private property and its defense on a global scale.  Just look at Iraq running nearly a $100 billion surplus, while the United States has spent over $3 trillion dollar in the Iraq war that they should not have been in and is itself nearly $21 trillion in total debt.  What sense does it make to be broke and the nation you "defeated" have a budget surplus of $100 billion?  To lay folk this seems so illogical. 

• 1. Why does the government remit a billion in debts or grant billions of dollars to other foreign countries for their political favors; 3 trillion to Iraq for war destruction and rebuilding while millions of Black people and 10's of millions of white people face evictions, foreclosure and ultimately homelessness; hundreds of billions to the Middle East and Israel while Black schools, hospitals, clinics, recreation centers, and businesses are closed/shut down?

• 2. Why does the government invest billions of dollars on useless projects in Europe, New Zealand, South Africa and Australia?

• 3. This at a time when 20% of the population is below the poverty level, and more than 350% of the population do not have access to basic medical services, not mentioning 8% of the general population, and 21-25% of the Black population are out of jobs with livable incomes.

• 4. Why for the same committed crime, does the law punish poor people more severely than rich people; black people more than whites?

• 5. Such government actions, as we see, are easy to explain given the essence of capitalist laws of profit.

• 6. It is easier for the state to grant 3 trillion dollars of tax payers' money to another country such as Iraq than to give this money directly or indirectly to the working population of their own country. Study Bear-Stearn's rescue and $2 fire-sale with essentially taxpayer monies.

Remember the fundamentals: a state is an instrument of the ruling class/race/culture/gender to maintain its position as the dominant rulers of the society for its own benefit, in its own interest, and image. Any change in the way this is achieved or the purpose of the state machine undertaken by the ruling class is made in accordance with its changing needs and always with reference to strengthening/expanding its position as the ruling class as it regards profit.  The government was created by slaveowners and capitalist; it was designed to work for the slaveowners and capitalist.  The capitalist ruling class does not work for the government, the government works for the capitalist ruling class---managing the operations of its economy, culture, social system, and political system.

Housing Crisis

The latest data suggest many homeowners across the nation continue to struggle with mortgage payments, despite highly publicized efforts by government, president, congress, watchdog groups, financial institutions and consumer advocacy groups to modify loan terms or work out long-term repayment plans for troubled borrowers.  Over 4.3 million families have already lost their homes to foreclosure since 2003.  Another 2.1 million families are slated to go into foreclosure in 2008 alone.

1. The increases are further exacerbating a protracted housing downturn that will only get worst as unemployment rises.
2. California had the second-highest foreclosure rate, with one in every 237 households receiving a foreclosure-related notice. The state had 56,393 properties on the foreclosure track, the most of any state. The total increased 139 percent from a year earlier.
3. In Florida, 37,696 homes reporting at least one filing, up more than 74 percent from February last year and up more than 9 percent from December.   Over 63 percent more U.S. homes faced foreclosure in March than in the same month last year, with Nevada, Michigan, Ohio, California and Florida showing the highest foreclosure rates.
4. A total of 332,383 homes across the nation received at least one notice from lenders last month related to overdue payments, up 68.1 percent from 141,383 a year earlier. Nearly half of the homes on the most recent list had slipped into default for the first time.
5. Nevada had the nation's highest foreclosure rate.  Housing values are in free fall. With a 76 percent increase from a year earlier and up 3 percent from March 2008.

Most of the troubled properties were located in California, Florida, Texas, Michigan and Ohio -- states where home prices have plunged as the housing boom went bust.

February marked the 26th consecutive month with a national year-over-year increase in foreclosure-related filings.

Case Study: Bear Stearns and Company

Desperate to aid an economy in crisis, the Federal Reserve delivered yet another big interest rate cut.  Essentially, the economy is falling apart because of layoffs, unemployment, sub prime escalating loan payments, a credit collapse, rising gas/oil prices, and the emerging stock-market nosedive.

You know the facts:  The dollar is valued at less than 100 Yen for the first time in 12 years; its value has dropped 14.3% in the past year alone.

The U.S. economy is debt heavy and relies on $2 billion per day from abroad to finance investments. The U.S. household debt has increased from $6.4 trillion in 1999 to $13.8 trillion in 2007, the majority of which is tied up in mortgages and home equity lines. The Federal Reserve has moved to buy $400 billion worth of mortgage-backed securities. Businesses are shedding jobs, Wall Street is convulsing, energy prices are skyrocketing and people are reluctant to spend.

The Federal Reserve bailed out Bear Stearns, the 5^thlargest investment bank, on March 14, 2008.  Financial institutions have racked up multibillion-dollar losses when mortgage-backed investments soured with the collapse of the housing market.

On Friday, the Fed used a Depression-era procedure to aid troubled Bear Stearns Cos. The investment bank, which faced a possible collapse, received a rescue package from the Fed and JPMorgan Chase & Co. Bear Stearns, which had made a fortune in mortgage-backed securities, has taken $2.75 billion in write-downs since last year. The situation is already desperate for the capitalist ruling class.  The Federal Reserve's decision to invoke a Depression-era law so that it could lend to Bear Stearns shows the seriousness of the crisis.  Like dominoes, if one of the top 5 banks (investment or commercial) collapses, the entire banking industry will fold like a cheap suit. 

The unlimited financial resources were funneled through J.P. Morgan Chase bank in a move not seen since the 1930s.  On March 16, J.P. Morgan Chase bought Bear Stearns for $236.2 million, which translates to roughly $2 per share.  So what does this mean?

• 1. The federal government bailed out a major investment bank, rescuing it from collapse. To do so, it had to create/modify a policy that would permit two things:
• a. Approval for lending to a non-bank financial institution, and
• b. Approval by vote of 4, rather than 5, of the sitting Fed Reserve Board members
• 2. This move saved not only that bank, but also other investment institutions. The paper states that J.P. Morgan Chase loaned the money; however the Fed Reserve loaned the money and funneled it through J.P. Morgan Chase bank.
• 3. A save of this magnitude was critical to the overall economy. Insecurity among investors will have them pulling their money out in a heartbeat. Therefore companies have an interest in presenting the best possible picture, even if it is made up.
• 4. If this company collapsed, others would soon follow as investors withdrew their money.  Taxpayer monies, $30 billion of them, underwrite this Bear Stearn bail out.  Taxpayers get nothing in return---but more unemployment, foreclosures, evictions, and suffering.

Consumers, businesses and investors are taking their money out of investments.  The rate-cutting began in September with the goal of shoring up the economy and reviving spending. The Fed's key rate has fallen from 5.25 percent to 3 percent. The pace picked up measurably in January when, during an eight-day period, the Fed slashed the rate by 1.25 percentage points. It was the biggest one-month reduction in a quarter-century. In response, commercial banks have lowered prime lending rates by corresponding amounts. The prime rate, now at a nearly three-year low of 6 percent, applies to certain credit cards, home equity lines of credit and other loans.

Case Study: No Job, No Income, Foreclosure, Eviction, Homelessness

The job market is in free fall, especially for Black people. Employers did away with 167,030 in January and February, the most in 13 years. With the economy faltering, the unemployment rate -- now at 4.9 percent -- would climb to 9.2 percent by year's end, and 22% African American women and 29% for African American men. Prices for everything from food, clothing, heat, water, electricity, transportation (air, water and land), health care to tuition to energy are up. Oil and gas prices reached record highs while the value of the dollar reached historic lows.

General Motors Corp. has announced that it plans to cut another 55,000 more hourly jobs by the end of 2008 and buyout up to 70,000 if possible. Ford Motor Co. has announced plant closings and layoffs that have affected at least 37,000 workers in the United States and Mexico, cutting thousands from its white-collar work force.

GM and Ford have won concessions from the United Auto Workers that will require active and retired workers to pick up more of their health care costs, transfer the health care and pension fund to an outside nonprofit to get it off their books, and DaimlerChrysler has gotten similar concessions. Over 55,000 workers now face buyouts of their contracts so that the companies can replace them with contract workers they will pay 1/4th of what they now pay. 

So a $40 an hour job will be going for $10- $12 per hour---with no benefits. The bankruptcy of the nation's largest auto supplier, Delphi Corp., forced its 31,000 hourly U.S. workers have their pay cut from $27 an hour to less than $13 per hour. Workers also have to pay health care deductibles for the first time and lose their dental and vision care coverage.  Unskilled manufacturing is going to be done in China, India.  Basic parts from South Korea, Taiwan, Canada and China plants rival modern manufacturing plants in the U.S. 

• 1. Housing developers are defaulting on loans because people are not buying houses
• 2. In Las Vegas, NV, a development partnership is in debt for $765 million; it cannot pay the interest on its loans. On ly 162 of the planned 13,500 homes have been sold.
• 3. The principal lenders for this housing project are J.P. Morgan Chase and Wachovia Corp. They lend developers money from the accounts of clients-people who are account-holders at the bank.
• 4. If mortgages aren't being paid, then it is certain that other loans are not being paid either.

In sum, advances in robotic technology and their application to (use in) the production of food, clothing, shelter, transportation, health care, manufacturing, construction, mining, and other societal services is ending wage labor, permanently unemploying factory workers, and sending millions to the street---unemployed, homeless, hungry, sick, confused, angry, and in line for some type of state action which ultimately leads to prison, hospital or homicide. 

1. Meanwhile, the number of foreclosed properties that didn't sell at auction and ended up going back to lenders soared more than 110 percent last month versus February 2007.
2. Last month, some 46,508 properties were repossessed by lenders, up from 22,114 a year earlier.
3. The company follows default notices, auction sale notices and bank repossessions. Lenders typically consider borrowers delinquent after they fall three months behind on mortgage payments.
4. In the 12-month period ended in February, 45 states saw an increase in the number of homes that had received at least one filing.
5. Rounding out the top 10 states with the highest foreclosure rates were Arizona, Colorado, Michigan, Ohio, Georgia, Indiana and Tennessee.

Computer automated machine production (CAMP) is ending wage labor, while globalization establishes the world's lowest possible wage as the standard for workers around the world.  As CAMP extends throughout the global economy, workers around the world compete with each other and with computerized robots.  The least skilled lose every time.  This global process slashes the cost of production to the absolute minimum, drives down the value of human labor and wages and forces more members of the household to enter the job market, work past retirement age, or take on multiple jobs to maintain a slipping standard of living. 

Then their retirement benefits and health benefits are cut or taken from them completely.  When people don't work, they cannot pay for the goods and services.  When they don't work the tax base shrinks, government services are cutout, schools are cut and closed, health care programs are severed, hospitals are closed, training programs are ended, children are warehoused in overcrowded schools and prisons.  Without the ability to sell their labor power, no wage or salary, and with no economic safeguards or political voice, the disposed must fight openly (in the streets)  on questions of necessity, such as food, clothing, shelter, education for their children, health care, transportation, and protection against the emerging nazi police state.