Fundamentals:  What is Causing the Emerging Financial Collapse in the United States?

Context

Nothing at the societal level happens over night; decades are involved.  No one thing causes a society to fall into collapse; like any system, in time it runs its course.  If you happen to be around when the sun burns its last hydrogen/helium flame you just happened to be born (unlucky) at a time when its time was up.  Same thing with capitalism, socialism, feudalism, slavery, hydraulic communal, primitive communes.  Suns, and societies like human beings have their own internal lifespans/lifetables.  This does not mean that other suns in other galaxies will just stop burning because the one in your area burned out.  Your task is to prepare for what is to follow that society and help to midwife it into existence---not lay down and just die with it.  Carefully study this inference. 

In the United States and the global economy, it is no longer a question of recession or not; for white workers, it is how deep and how long?  For Africans in America this is the beginning stages of a depression which will bring in its wake white nazi terror, ultra white nationalism, and motions toward "final solutions" to what has been defined as a Black problem.  The white workers and the white ruling class will do what they have always done: join together in race unity across class lines in yet another of their genocidal sieges against populations they rule/scapegoat.  Study their history in times of economic crisis. 

You can either accept the coming death and destruction, try to get along, fall in line, grovel again, lay down, and again try to find some way to live with it.  Or you can fight to get out of it.  Prepare, soberly face it, re-establish moral fundamentals, cultivate mental alertnessand morality, and lay down martial guidelines/practices.  This epochal hurricane is to be the worst the world has seen because it is global in scope as opposed to regional and hemispheric in the case of slavery and feudalism.

Today, Black people still go to school with the assumption that the white economic system has a job for them if only they get an education and qualify.  Wrong assumption.  There are no waiting jobs for the masses of educated white populations who are being foreclosed and evicted after being laid off; ruling class to working class whites care nothing for Black populations.  Populations caught off guard this time are in for a rude awakening because this is not just another "business cycle correction" that happens with capitalism every 7-10 years.  These are not growing pangs---these are death crises.  It will not get better before it gets much worst because an actual social system is in the initial stages of collapse.  In general pink slips were issued in June 2008 as they had been issued the past six months---as capitalist employers have slashed over 4.1 million jobs over the past 2 years of which 33 percent were jobs African Americans worked on/at (these Black populations make up only 13.2% of the national population).  While the white unemployment rate is an average somewhere between 6 and 9 percent, the African American actual rate is between 19% and 28%.  Job losses are nearing the staggering level of nearly one million this year in just seven months.  For the sixth month in a row total U.S. employment rolls decreased while unemployment increased---a sharp increase usually associated with times of deep economic stress.

African Americans and others are swamped by rising as prices which are at $4.89 at many gas pumps, the price of oil which is nearly $150 per barrel, inflated food prices, the weight of the housing/credit/financial crises.  You cannot buy health care, pay a house note, pay a car note, pay for child care, buy gas, pay rent, pay for your education, buy medicine, take vacations, eat at restaurants etc. without money; you get money from a job; you get a job (in a capitalist society) from a capitalist who must sell what is produced at a profit or they have to lay you off.  At the heart of the "selling what is produced at a profit" is labor replacing technology. 

Ford, GM, Chrysler and all manufacturing industry business must computer automate to stay competitive in a shrinking buyers market.  They are now laying off white people in droves---they care absolutely nothing for the Black and brown people.  In short, if you do not work (above ground or underground) you do not eat.  Job losses have been widespread all year: hitting workers at factories, churches, day care centers, colleges, high schools, soup kitchens, construction companies, shoe retailers, universities, banks, architecture and engineering companies, legal services, airlines, service industries, law firms, real-estate firms, insurance companies and even hospitals, bars, restaurants, museums, zoos, parks, and temporary-help agencies. Also hotels, trucking companies, rental agencies, mortgage brokers, computer design shops, accounting firms, and other transportation as well as telecommunications companies have been hard hit. 

No one is suffering as much as the Black women, who, in 77% of Black families, head the household caring for children, babies, and the elderly---many inside those families are facing eviction, foreclosure, hunger, cold, lack of water, lack of electricity, lack of gas monies, and lack of a future.  First, master the fundamentals: Any society is a social system organizing human populations, land, their labor, the fruits of their labor, minerals, water, and the necessities of life.  A system is a combination of parts forming a complex whole.  It really does not matter who is the president.  They are faced with: a collapsing economy which has run its natural course.  They too will close schools, hospitals, recreation centers, homeless shelters, food distribution centers, clinics, job training programs---all in the name of balancing the budget---while millions (many of them Black people) are being foreclosed and evicted to the streets without food, clothing, shelter, education, health care, employment or a future.

Presidents, Votes, Political and Economic Reality

In the case of the United State there is a nation, there are 322 million people in it, the people have various skin colors, they live on land adaptable to the human species, they need food, clothing, shelter, education, health care, clothing, roads, transportation, technology, morality/ethics and martial defense for sustained life.  Most of them work at a job to earn a wage/salary which gives them an income in the form of money that they then exchange with a capitalist for necessary then luxury goods and services.  The white skin population is in charge of this economy, political system, social system, and cultural system.  They enslaved the Black population for over three centuries and killed the native population in the process of stealing their 3.8 million square miles of land.  In the process, the whites (through their ruling class) created the religions, the gods, the education systems, the mass media, the structural institutions, the dominate values and the police/military forces that make sure that they society benefits the white race in general and the white ruling class capitalist in particular. 

The ruled general population which is majority white also, live in states divided by imaginary boundaries within a United States federal governing system called a republic, those states each have a flag, constitution, legislature, federal representatives, and economies that provide the necessities of life.  Each state is divided into counties, municipalities, standard metropolitan areas, cities, and towns.  The majority of the Black populations live in central cities (67%) and standard metropolitan areas (81%).  When an economic crisis occurs, the central cities will feel it the hardest because their populations are entirely dependent on market forces. 

Around those economic systems are social and political systems enforced with police, prisons, guns, bombs, steel, germ warfare, fbis, cias, nsas---clever, cunning killers.  Internal to all societal systems is culture, the sum total of how a population creates and recreates its civilization.  In the United States this is a white Greco-Roman/Judeo-Christian culture centered around an English hegemonic language and ethnic history.  Blacks have white name, languages, religions, holidays, clothes, hair, dress, habits, architecture, family models, recreation, sport---everything. Being dependent from crib to grave, most Black populations never appreciate the independence of thought and thus never have independence of action.  Life ends up being a choice made by someone else that benefits someone else that is made to appear that you made it.  Named Akbar, Fox, or Jones---the majority of Black populations the world over still ignorantly walk around with even the names of the arab/jew/white populations who historically enslaved them.  Generally the white ruling class sets aside the best of everything for their race (in relative measures) then blame other subjected populations for not being able to keep up. 

Essentially, from this nation's founding a specific class, race, sex/gender and culture sets up a political and military system to decide who gets what, how much, what quality/quantity and when.  Blacks were at the bottom, enslaved, brutalized and worked to death.  First all Blacks could not vote, then all Blacks except Black men with property could not vote, then Blacks who could vote were cheated out of voting strength by gerrymandering and redistricting.  Now, with barely 13.2% of the national population and in addition disproportionately disenfranchised because of felony records, Black populations are now being led to hope for change in yet another illusion.  Voting is the low end of the political process; ask the Jews who rake in $9.8 billion in tax dollars channelled to Israel each year along with billions in other military and economic handouts.  Over $3.5 trillion dollars has been spent in Iraq, tearing up a country then rebuilding it for the whites as they prepare to dominate oil in that general Caspin Oil basin region for another 25 years via underground pipelines and bombs.  Blacks as citizens in the United States have never gotten a dime from the government for nearly 345 years of state sponsored slavery/mass murder.  At the same time, no population in the world wastes as much time debating over voting  and gets so little out of it as the African populations all over the world. 

The interests, profits, investments, imperialism, oil goals of the capitalist ruling class are the same no matter who wins the Presidential election (capitalist democrat or republican): Profits, defense of corporations ability to move their factories to wherever in the world they can make the most profit/return on their investment, cheap to free mineral resources from Africa, cheap to free agricultural produce from nations of color, the acceleration of globalization, the ability of the U.S. to dominate that process, and the military means to continue protection of the mineral resources it had earlier seized from nonwhites around the world. Faced with an economic crisis unprecedented in human history, the ending of manufacturing wage labor in automated production processes, the collapse of the US dollar, gas prices above $4.89 per gallon, oil prices above $150.00 per barrel, predatory competition between the nations for markets, the degeneration of capitalist and socialist societies around the world, and the emergence of neo-nazi movements globally---conditions will only get worse.

The Presidential candidates are talking change, but these changes will only help the ruling class protect private property under these changing world conditions.  Their central problem is not one that they can solve this time: How will the president/administration sustain a market economy without consumers who can buy? Having dismantled governmental mechanisms, what will they use to intervene to assist in sustaining this market? How many more wars must they start and fight to create artificial scarcity as to sell commodities after they blow up/destroy enemy nations and then rebuild them woth taxpayer monies?  Neo-liberalism - once the watchword of an emerging global ruling class - is increasingly discredited and the search is on for an alternative to take the globalized world the next step forward.

Run an old nearly senile white man, a mixed up white woman and Black man and you get this empty play on words with no actual understanding of economic fundamentals in an era of globalism and degenerating socialism and capitalism. Obama and Clinton are both on the moderate to right wing of their party, each with a team of moderate/rightwing advisors and policy makers with overt/proven track records of defending U.S. capitalist profit interests in the world, starting and financing wars over oil and minerals, starving Haitians, taking land from Zimbabweans to give to whites, destabilizing Congo and the whole of Southern/Central Africa, and defending corporate interests over the interests of working class people, especially Black populations. Clinton has made over $126 million dollars after their family left office from special interest groups.  Go and study this carefully.  Obama and Clinton were near broke just 9 years ago.  They have been paid off as has McCain who actually married into money.

The republicans as wolves are already bordering on Nazism, and the democrats are wishy-washy foxes inheriting an economic situation they have not fully understood.   What awaits them both is an economic collapse, disorder, and thrusts to direct Nazi takeovers by the far rightwing of the ultra-white nationalist/aryan movement.   This period is not one to be confused/daydreaming.   As it stands those running for office are forced, for the time being, to appeal to the masses for votes, but their actual abilities to give you a job while making a profit for the capitalist is impossible in this period when robots can do it cheaper and Africans/Asians are so desperate they will work for near nothing as volunteer slaves.  The silly sentimental, mystical, empty, popular, nostalgic "change the world with two pennies" rhetoric is just that: nonsense.  If you have lost your home, they are not going to go against capitalist profits and give you a home; if you lost your education loan, they are not going to go against capitalist profits and give you a grant, if you lost your job, they are not going to hire you.  Yet, they will take $30 billion of your tax money and bail out Bear-Stearns; they will take your money and open a easy loan desk at $260 billion dollars for capitalist banks to loan each other money.  They (McCain, Obama, and Clinton) are all capitalist representatives---first and foremost, on the payroll of special interests and white liberals who are now moderates, moderates who are now conservatives, and conservatives who are now nazis.   They can make promises, but the fundamentals of economics tell us that they are leading us to nazi slaughter. Again, the fundamentals are helpful here:

When we move to the other side of the system, the way things are distributed, the "ism" becomes of decisive importance. In capitalism, everything is a system of buying and selling. The workers sell their ability to work, their labor power, and buy the commodities that are necessary to live. The capitalist buys this ability to work, the labor power, the nerve and muscle and energy that, once put in motion, becomes work, and sells the commodities that work produces. So long as everyone participates in this buying and selling, the system works. It works unfairly and unevenly, but it works. Like the machine, when something is extracted or something foreign is added, it will no longer work.  Labor replacing technology which can produce 150 cars on a roboticised computer automated assembly-line in a time that human can only produce 10 is the new/foreign element in this capitalist economic equation.  It is here to stay.  

Technology is what humans use in the process of production to produce a good or service. A class/race/culture/gender is organized around a particular stage of technological development according to the nature of their relationship with that technology-as owners or non-owners.  In industrial production, there is a class that owns the industrial technology and buildings that house it, as well as a class that uses it in the workplace.  Similarly, the computerized technology (including computer automated) produced a class of owners and workers. The class of owners both inherits and coordinates a political/governmental apparatus that preserves their position as owners and creates policy agencies, both domestically and abroad.  Land, technology, economy, political system, and social system as a whole equal a society. 

We have already explained in past reports how: Every society has at its core land, a settled population, a cultural way of adapting to life, and an economy---a system of producing, distributing, exchanging, consuming, and reproducing the necessities/luxuries of life.  Every economy is controlled by a ruling class/race via a political system welding the instrument of state government, enforced by brute military force, and usually greased (made acceptable) with a mystical religious brew of afterlife deception and fear.  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.).  Religion is also made up, planned, written, published, printed mystical ideas propagated by the ruling race, class, sex/gender, and culture.  

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.  The source of wealth is nature and human labor. Gold has no innate, inherent, natural value, neither does paper with a dead white president's face on it (money).  Even the churches, mosques, synagogues are bought and paid for out of the labor of the masses.  Everything that surrounds us in our daily life---cell phones, computers, Ipod, printers, flat screen TVs, space shuttles, cars, trucks, highways, clothing, houses, books, etc., luxury articles as well as necessary ones---is created by skilled, semi-skilled or unskilled human labor.  Most of this wealth is appropriated without indemnity by the ruling class, race, culture and sex/gender.  They created a set of laws, a constitution, a government, an armed military and paramilitary force, an education system, a religious and cultural system, a mass media, prisons and symbols of power which re-enforce their rule.  In fact, they create the gods that are always, always, on their side.  The mechanism of taking the wealth from those who work is always different and is based on the society's mass population degree of development.  But it is a system, and like every thing else it has a period of birth, development, maturation, decline, decay, and deterioration, death and replacement with a more relevant/adaptable system.  If planets, solar systems, stars, galaxies, and even universes come to an end (over billions of years), die, and end up recycled in a Black Hole, transformed in to Black Dark Matter, then Black Dark energy, then baby universes---surely a few societies with 400-500 year life spans also run their course.  The feudal, capitalist, and socialist ruling classes under stand this.  They, (like anything old, moribund, rotting, dying away) try to hold on---some in creative ways.        

Having fashioned an economic, political, social, and cultural system in their own image and interests, why wouldn't the United States (1776-1791) capitalist, Greco-roman, male, white rulers ensure their rule through military force, mass media coercion, and religious indoctrination?  Consequently, the few rich people exist only because the masses of poor people exist---they live off of them; an economy is finite, there is only so much money circulating at one time and somebody has it and somebody doesn't.  Somebody, less than 8% of the United State's population, today owns over 91% of the nation's wealth.  Poor people produce the means of existence for themselves at the businesses the capitalists set up, and also work more, surplus time, in order to produce the means of existence, including luxury articles, for rich people.  Throughout European history there has been a working class which held different names such as slave or serf or industrial worker. Since the destruction of primitive communalism, there has always been a ruling class. The name or designation of that ruling class has always been closely associated with the society's technology.

FOUNDATIONS OF ECONOMIC COLLAPSE

2008 Contraction of U.S. Domestic Home market

              Objectively, human labor power cannot compete with the productivity and efficiency levels of Computer Automated Machine Production (CAMP). 

              As CAMP is diffused into modern production and distribution systems, human labor value, first in a relative then in absolute form, has decreased.  As worker labor value decreases, their living standards will continue to deteriorate.  Specifically, with the decrease in real wages, women, the elderly, children, Hispanic workers from Mexico, Nicaragua, El Salvador, etc., and other workers are being rapidly infused into the civilian labor force further driving down the wage price of labor.[1] 

 Decline in Real Wages and Living Standard

              This has increased the absolute volume of surplus value extracted from the larger aggregated labor force because it has allowed capitalist enterprises to hire entire extended families as opposed to, in the past, merely the male head of the family.  Because surplus value is the source of capitalist profits, production spheres which are replacing human labor with CAMP out of economic necessity have intensified remaining human labor operations and in affect have increased the overtime hours of the remaining production laborers.

              Thus, in the process of the implementation of CAMP in productive spheres and the resulting expropriation of human labor power, labor had to be transferred to distributive and exchange spheres (service industries) where the aggregate number of the civilian labor force has increased while the specific living standards of the majority of this working population has decreased.

              Decreases in real wages lead to a decreased purchasing power, in the process mass buying power becomes unable to absorb the nation's output.  Given the continued devaluation of labor power, and the resulting reduction in wage cost-price, such debt will not be paid back, thus we witness financial collapse, first of the smaller banking institutions which process these loans, then of the larger banking institutions.

Decrease in Demand

              In the anarchic competition between individual capitalist enterprises in a particular sphere of production more goods are being produced with the aid of computer automated machine production (e.g., computers, industrial robots, machine systems, and computer integrated manufacturing systems, etc.) than there are markets to sell them in.

              In a capitalist economy, demand does not mean that humans merely need or desire some particular good or service.  Demand means that the consumer has money or credit with which to purchase the commodity.  Without money, even credit is difficult to obtain.  The form in which overproduction is hidden is always more or less embodied in the extension of credit. 

Emerging Economic Depression in the U.S.

              In the United States, microchip technology in particular, Computer Automated Machine Production (CAMP) in general, and universally, the Scientific and Technological Revolution (STR) are determined by the economic system which organizes laboring populations to carry out certain production, distribution, exchange, and consumption tasks in accordance with the social circulation of life-sustaining commodities.  

              CAMP has established the technical requisites for transforming the manner in which the necessities of life are produced.  Yet, at this stage, technical requisites are still subordinates to economic requisites in a capitalist society.  The economy's distributive system still demands that laborers earn a subsistence wage, exchange their money for goods and services in the market place, and at the same time produce surplus value which is later transformed into capitalist profits, interest, and rent.  Machines increase productivity, precision, and efficiency but they cannot buy back the enormous volume of commodities that they produce in different spheres of production, distribution, and exchange.   As a result, domestic markets have continued to contract.  Capitalists have therefore been forced to use more CAMP to cheapen the cost of production, improve productivity, and increase efficiency which would allow them to get the edge in a market.  In order to afford such expensive retooling businesses are reducing their costs by (1) reducing the cost of the materials in the product, (2) reducing the labor required to produce the product, thereby cutting labor costs, and (3) demand that workers who labor for them labor for less---concessions. 

          Capitalist drive to implement cost-cutting and efficient CAMP in all spheres of the society causes an equal, yet inverse impact on the civilian labor force which must purchase the CAMP commodities.  Simply put, workers need jobs in order that they may earn wages which they will then spend on adult education, food, housing, transportation, health care, and leisure products.  Workers receive their pay from capitalist businesses who must sell CAMP commodities at a profit to workers whose real wages have steadily declined for the past 10 years.  Today, modern production is concentrated in the hands of giant companies such as Wal-Mart, Exxon-Mobil, General Motors, Ford, Enron, Microsoft, and Citigroup. Small businesses exist but they represent the embryonic or obsolete production, the older technologies or the nascent one in their testing stages.  Modern production is essentially mass large-scale computer automated machine producing international business.

At present, 966 top companies together with 231 banks and finance houses control the world economy, and account for 88 per cent of output. This development has come about over the past few hundred years through ruthless enslavement, theft, pillage, extermination, expropriation, competition, and war.  Under capitalism, goods are not merely produced to satisfy someone's want or need, but primarily for sale at a profit. That is the function of capitalist industry, to make money, to turn a profit, to get more than was given, to take more than was taken.

              Today, domestic capitalists markets seek refuge in credit elasticity.  This is mere temporary relief because expanding debt spending on a international, national, federal, state, local, commercial, or consumer level has a nodal line at which time it begins to turn into its opposite.  International capitalist markets engage in the socio-historic interpenetration of socialist social formation.  The world historical materialist dialectic unfolds.  Debts mount.  The capitalist circuits of money---commodity---money', become credit---commodity produced by CAMP---credit (prime).  Credit has begun to contract because of the accelerated decline in worker real wages and disposable income.  Inflation is transformed into deflation.  Economic depression is emerging.  What was once confined to economic M---C---M', and C---M---C' is fast becoming a political crisis between capital and labor refereed by state apparatuses on the side of the capitalist.

          It was technology that created a truly world market and with it a worldwide division of labor that created an international working class.  Today, it is technology that has created this unprecedented glut of commodities on the world capitalist market; the resulting interpenetration of opposite social formations, and the basis for social transformation in capitalist and socialist nations.          

The process of robotization of capitalist production becomes stronger each year:

•§         increases productivity

•§         increases the quality of produced goods and services,

•§         increases profits, which is the main reason for the implementation of the new technology.

On one hand, an army of unemployed is growing every year without any hope of finding jobs to secure the average standard of living, and

On the other hand, the quantity, of produced commodities for mass consumption increases several times due to the high productivity of robotized factories

Thus, companies would produce goods for mass consumption on an increasing scale and at the same time eliminate the consumer market as they lay off workers.

For this reason the companies can't realize their profits, for the sake of which they robotized their production and reduced manpower.

The result: an economic crisis that can't be solved with the methods of the old economic policy, the essence of which is to stimulate the private sector by reducing taxes on capital, by reducing the interest on money borrowed from the Federal Reserve, in short, by creating favorable economic conditions for capital to function. This economic policy will continue to fail, because the main reason for the crisis is absence of a solvent market in the face of high unemployment, consisting of workers who never will be engaged in production, and never will restore the market for goods of mass consumption.

The old means of treating an economic crisis by stimulation of business, which in turn enhances market solvency by attracting more and more unemployed people into production, will no longer produce their magic, because robots will forever eliminate workers from production. Look at Ford, GM, and Chrysler shedding workings by the 100,000's. 

The existence of the global market only postpones the economic crisis in a given country, because capital increases export of its goods abroad for realization of profits when the solvency of the domestic market diminishes.  This process will proceed until the robotization of production in underdeveloped countries reaches the same level as it has in developed capitalist countries.  International competition will force them sooner or later to implement robotization.  When cheap labor no longer can compete with unmanned factories producing the same product, underdeveloped countries will be compelled to implement robotized production, and they will feel the same consequences that developed countries experience. Under these conditions the global market will exhaust itself as the valve that eliminated economic pressure on the domestic market.

In its social aspect, unemployment resulting from the robotization of production means a violation of the balance between the interests of rich and poor, the preservation of which is the major function of any class-based state. Under these conditions it is most likely that the patience of working people left without work will be exhausted and they will begin to demand jobs and fair distribution of wealth. Unemployment delegitimizes governments and is a time bomb. Such is the prognosis for the development of unmanned production under existing capitalist state.

Debt, Bankruptcy, and Financial Collapse