Salon.com > Steve Fraser

Capitalism funds natural disasters

Thu, 04 Apr 2013 15:20:00 +0000

In 2007, a financial firestorm ravaged Wall Street and the rest of the country. In 2012, Hurricane Sandy obliterated a substantial chunk of the Atlantic seaboard. We think of the first as a man-made calamity, the second as the malignant innocence of nature. But neither the notion of a man-made nor natural disaster quite captures how the power of a few and the vulnerability of the many determine what is really going on at ground level. Causes and consequences, who gets blamed and who leaves the scene permanently scarred, who goes down and who emerges better positioned than before: these are matters often predetermined by the structures of power and wealth, racial and ethnic hierarchies, and despised and favored forms of work, as well as moral and social prejudices in place before disaster strikes.

When it comes to our recent financial implosion, this is easy enough to see, although great efforts have been expended trying to deny the self-evident. “Man” did not bring the system to its knees; the country’s dominant financial institutions and a complicit government did that. They’ve recovered, the rest of us haven’t.

Has America become a slave to its own debt?

Tue, 29 Jan 2013 16:03:00 +0000

Shakespeare’s Polonius offered this classic advice to his son: “neither a borrower nor a lender be.” Many of our nation’s Founding Fathers emphatically saw it otherwise. They often lived by the maxim: always a borrower, never a lender be. As tobacco and rice planters, slave traders, and merchants, as well as land and currency speculators, they depended upon long lines of credit to finance their livelihoods and splendid ways of life. So, too, in those days, did shopkeepers, tradesmen, artisans, and farmers, as well as casual laborers and sailors. Without debt, the seedlings of a commercial economy could never have grown to maturity.

Ben Franklin, however, was wary on the subject. “Rather go to bed supperless than rise in debt” was his warning, and even now his cautionary words carry great moral weight. We worry about debt, yet we can’t live without it.

Debt remains, as it long has been, the Dr. Jekyll and Mr. Hyde of capitalism. For a small minority, it’s a blessing; for others a curse. For some the moral burden of carrying debt is a heavy one, and no one lets them forget it. For privileged others, debt bears no moral baggage at all, presents itself as an opportunity to prosper, and if things go wrong can be dumped without a qualm.

Austerity: The real “fiscal cliff”

Mon, 03 Dec 2012 14:42:00 +0000

“Debtpocalypse” looms. Depending on who wins out in Washington, we’re told, we will either free fall over the fiscal cliff or take a terrifying slide to the pit at the bottom. Grim as these scenarios might seem, there is something confected about the mise-en-scène, like an un-fun Playland. After all, there is no fiscal cliff, or at least there was none -- until the two parties built it.

And yet the pit exists. It goes by the name of “austerity.” However, it didn’t just appear in time for the last election season or the lame-duck session of Congress to follow. It was dug more than a generation ago, and has been getting wider and deeper ever since. Millions of people have long made it their home. “Debtpocalypse” is merely the latest installment in a tragic, 40-year-old story of the dispossession of American working people.

21st century chain gangs

Thu, 19 Apr 2012 15:06:00 +0000

Sweatshop labor is back with a vengeance. It can be found across broad stretches of the American economy and around the world. Penitentiaries have become a niche market for such work. The privatization of prisons in recent years has meant the creation of a small army of workers too coerced and right-less to complain.

Prisoners, whose ranks increasingly consist of those for whom the legitimate economy has found no use, now make up a virtual brigade within the reserve army of the unemployed whose ranks have ballooned along with the U.S. incarceration rate. The Corrections Corporation of America and G4S (formerly Wackenhut), two prison privatizers, sell inmate labor at subminimum wages to Fortune 500 corporations like Chevron, Bank of America, AT&T and IBM.

Wall Street, take our children!

Tue, 29 Nov 2011 16:53:00 +0000

In 1729, when Ireland had fallen into a state of utter destitution at the hands of its British landlords, Jonathan Swift published a famous essay, “A Modest Proposal for Preventing the Children of Poor People in Ireland from Being A Burden to Their Parents or Country, and for Making Them Beneficial to the Public.”

His idea was simple: the starving Irish should sell their own children to the rich as food.

His inspiration, as it happened, came from across the Atlantic. As he explained, “I have been assured by a very knowing American of my acquaintance in London, that a young, healthy child well nourished is at a year old a most delicious, nourishing and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricassee, or a ragoust.”

Inspired in turn by Swift, I want to suggest that we put in motion a similar undertaking: on Jan. 16, Martin Luther King Day, citizens from around the country should gather at the New York Stock Exchange on Wall Street. Let’s call this macabre gathering -- with luck and even worse times, it should be mammoth -- “We Surrender” or “Restore Debtor’s Prisons” or “De-Fault Is Ours” or “Collateralize Us.” And plan on a mirthful day of mourning.

Our history of hating Wall Street

Thu, 13 Oct 2011 13:00:00 +0000

Occupy Wall Street, the ongoing demonstration-cum-sleep-in that began a month ago not far from the New York Stock Exchange and has since spread like wildfire to cities around the country, may be a game-changer. If so, it couldn't be more appropriate or more in the American grain that when the game changed, Wall Street was directly in the sights of the protesters.

The fact is that the end of the world as we've known it has been taking place all around us for some time. Until recently, however, thickets of political verbiage about cutting this and taxing that, about the glories of "job creators" and the need to preserve "the American dream," have obscured what was hiding in plain sight -- that street of streets, known to generations of our ancestors as "the street of torments."

After an absence of well over half a century, Wall Street is back, center stage, as the preferred American icon of revulsion, a status it held for a fair share of our history. And we can thank a small bunch of campers in Manhattan's Zuccotti Park for hooking us up to a venerable tradition of resistance and rebellion.

The Street of Torments

The strange history of Tea Party populism

Mon, 03 May 2010 21:20:00 +0000

This article originally appeared at TomDispatch:

On a winter’s day in Boston in 1773, a rally of thousands at Faneuil Hall to protest a new British colonial tax levied on tea turned into an iconic moment in the pre-history of the American Revolution. Some of the demonstrators -- Sons of Liberty, they called themselves -- left the hall and boarded the Dartmouth, a ship carrying tea, and dumped it overboard.

One of the oddest features of the Boston Tea Party, from which our current crop of Tea Party populists draw their inspiration, is that a number of those long-ago guerilla activists dressed up as Mohawk Indians, venting their anger by emitting Indian war cries, and carrying tomahawks to slice open the bags of tea. This masquerade captured a fundamental ambivalence that has characterized populist risings ever since. After all, if in late eighteenth century America, the Indian already functioned as a symbol of an oppressed people and so proved suitable for use by others who felt themselves put upon, it was also the case that the ancestors of those Boston patriots had managed to exterminate a goodly portion of the region’s Native American population in pursuit of their own self-aggrandizement.

FDR’s bold brain trust versus Obama’s timid wonks

Wed, 03 Dec 2008 11:35:00 +0000

On a December day in 1932, with the country prostrate under the weight of the Great Depression, ex-President Calvin Coolidge -- who had presided over the reckless stock market boom of the Jazz Age '20s (and famously declaimed that "the business of America is business") -- confided to a friend: "We are in a new era to which I do not belong." He punctuated those words, a few weeks later, by dying.

A similar premonition grips the popular imagination today. A new era beckons. No person has been more responsible for arousing that expectation than President-elect Barack Obama. From beginning to end, his presidential campaign was born aloft by invocations of the "fierce urgency of now," by "change we can believe in," by "yes, we can!" and by the obvious significance of his race and generation. Not surprisingly then, as the gravity of the national economic calamity has become terrifyingly clearer, yearnings for salvation have attached themselves ever more firmly to the incoming administration.

The fear and loathing of Wall Street

Fri, 03 Oct 2008 10:09:00 +0000

Wall Street sits at the eye of a political hurricane. Its enemies converge from every point on the compass. What a stunning turn of events.

For well more than half a century Wall Street has enjoyed a remarkable political immunity, but matters were not always like that. Now, with history marching forward in seven league boots, we are about to revisit a time when the Street functioned as the country's lightning rod, attracting its deepest animosities and most passionate desires for economic justice and democracy.

For the better part of a century, from the 1870s through the tumultuous years of the Great Depression and the New Deal, the specter of Wall Street haunted the popular political imagination. For Populists it was the "Great Satan," its stranglehold over the country's credit system being held responsible for driving the family farmer to the edge of extinction and beyond. For legions mobilized in the anti-monopoly movement, Wall Street was the prime engine house of monopoly capitalism, leaving behind it a trail of victimized businesses, consumers, captive municipalities, and crushed workers. For Progressive reformers around the turn of the 20th century, Wall Street's "money trust" was the mother of all trusts, its tentacles -- and the octopus was indeed a popular image of the time -- choking off economic opportunity for all but a favored few. Its political power in Congress, in presidential cabinets, in statehouses, in both major political parties was seen as so overwhelming as to threaten to suffocate democracy itself.

Another Gilded Age comes to an end

Mon, 22 Sep 2008 10:35:00 +0000

What is Washington to do as the financial system collapses? Clearly, stark differences in approach as well as in public policy have already emerged. Bail out Bear Stearns and pump up the brokerage and investment business with new lines of credit. Nationalize Fannie Mae and Freddie Mac on the backs of the taxpayer -- but let Lehman drown. Tell the financial community to save itself, after which Bank of America salutes and buys Merrill Lynch. Then, the Fed gets cold feet and decides it can't let an institution the size of the insurance giant AIG go under as well. Washington is left staring into the abyss. The old rules no longer apply.

And that's the point. At moments of crisis since the mid-1980s, the relationship between Washington and Wall Street has changed fundamentally, at least when compared with anything that would have been recognizable in the previous century. As a result, the road ahead is dark and unknown.

During the 19th century, Washington was generally happy to do favors for Wall Street financiers. Railroad tycoons, who often used those railroads as vehicles of extravagant speculation, enjoyed subsidies, tax exemptions, loans and a whole smorgasbord of financial fringe benefits supplied by pliable congressmen (not to mention armadas of state and local officials).

The Gilded Age, past and present

Mon, 28 Apr 2008 11:00:00 +0000

Google "second Gilded Age" and you will get ferried to 7,000 possible sites where you can learn more about what you already instinctively know. That we are living through a gilded age has become a journalistic commonplace. The unmistakable drift of all the talk about it is a Yogi Berra-ism: It's a matter of déjá vu all over again. But is it? Is turn-of-the-century America a replica of the world Mark Twain first christened "gilded" in his debut bestseller back in the 1870s?

Certainly, Twain would feel right at home today. Crony capitalism, the main object of his satirical wit in "The Gilded Age," is thriving. Incestuous plots as outsize as the one in which the Union Pacific Railroad's chief investors conspired with a wagon-load of government officials, including Ulysses S. Grant's vice president, to loot the federal Treasury once again lubricate the machinery of public policymaking. A cronyism that would have been familiar to Twain has made the wheels go 'round in these terminal years of the Bush administration. Even the invasion and decimation of Iraq were conceived and carried out as an exercise in grand strategic cronyism; call it cronyism with a vengeance. All of this has been going on since Ronald Reagan brought back morning to America.