Hair[cuts] of the Dog[s]

Hair[cuts] of the Dog[s]

Part 1

1. All that was lacking was the puff of white smoke….. and a hall of mirrors. All that was lacking to the labor and delivery of the latest infant heir to crumbling euro-throne; all that was lacking to the latest bailout, financial stabilization facility, firewall, vaccine, blood-brain barrier; all that was lacking to the birth of the latest in still-born messiahs riding into town in the back of a limousine and on the backs of seventeen asses was that smoke and that hall of mirrors reflecting into infinity the image of latest in the line of hairless, toothless, witless offspring of smoke and mirrors capitalism.

Staring at their latest product, Herr Sarkozy and Madame Merkel, held hands and spoke to each other as one:

"Mein Liebling er sieht genau wie wir. Ma Cherie, il regarde juste comme nous."

It was October 27, 2011.

2. Marx, prior to plunging into the study of political economy, has to settle accounts with Hegel. It is Hegel's mastery of critical philosophy that has revealed itself incapable of apprehending the true conditions of history, of human beings creating the conditions of their own existence. Critical philosophy at its zenith cannot apprehend the material basis for its own existence, which is that conditions of sustaining the society are antagonistic, contradictory, opposed to the social labor process.

At a point, the point being the intersection of the concrete organization and functioning of the society with human need, critical philosophy exhausts itself. Abstract criticism capitulates to things as they are, unable to expose relations as they become manifest.

At this point, Marx undertakes his Critique of Hegel's Philosophy of Right. There is a material, "passive," basis for Marx's own work and that is the intersection of Germany's backward political relations combined with the modern economic conditions that have already taken root there. The Critique of Hegel's Philosophy of Right stands as a record of Marx's encounter with this uneven and combined development. Marx's "A Contribution to the Critique of Hegel's Philosophy of Right—Introduction" is the overture to what would become the enduring theme, the symphonic collection he would produce as his opus—historical materialism.

This "Introduction" is just that and in it Marx actually reestablishes critique but not as or in the abstract, as speculative inquiry. Rather, critique is demonstrated, not described, as the quality, the condition, the product of human activity itself, the product of the labor process.

Critique is reshaped, or rather re-produced as an expression, manifestation of the conflict, the antagonism, the contradiction that produces and reproduces human beings as social beings, as they create their own social existence in the mediation of their natural existence through their facility, capability, potential, necessity for social labor.

Critique, reshaped, reproduced, is also restored as the immanent critique, the critique inherent in the conditions, relations of existence, erupting, and disrupting, the state of existence, of being.

It is in his "Introduction" that Marx gives immanent critique it's "sweetest" most poetic expression, stating, almost throwing away the statement that "…these petrified conditions must be made to dance by singing to them their own melody." The musicality of the immanent critique is not just that it sings in the voice recognizing the contradictions, but that the song is those contradictions achieving a voice. It's not just that the "music" is in the right key, but that the music is the key itself.

Now voice assumes its power in exposition, in relating the origins and prospects, the history of the petrified, obsolete, but still respiring conditions. With capitalism, as it accumulates its contradictions, the "singing" is performed by its very defenders, its agents, its governors, administrators, advocates in the very act of defending, governing, administering to, and advocating the conditions of capital.

It happens, sometimes, that the song begins with a sigh of relief:

"I believe the debt crisis affecting Spain and the Eurozone in general has passed." So said Spain's Prime Minister, Jose Luis Rodriguez-Zapatero in September of 2010. Six months later, the passing was of Rodriquez-Zapatero himself as he announced he would not stand for reelection… as if it were his choice, his decision. Rodriquez-Zapatero was compelled to move up the date for national elections in accordance with the wishes of holders of the Spanish sovereign, and corporate, debt. Ever the singer, always with the song, Rodriquez-Zapatero, in announcing the early elections, crooned "I believe that the basis for economic recovery and the foundations of a new stage of growth in Spain have been laid."

Other verses of the song might include frank admissions as to the dysfunctional function of capital accumulation:

"Our industry has destroyed billions of dollars in value, and we have been at that task year after year. The financial crisis did not cause the problems we face, it unmasked them, laid them bare, and deprived us of any pretence of denial," sang Sergio Marchionne, CEO Fiat SpA, in late September 2011.

Sometimes, the song has a verse of simultaneously expressing recognition and disbelief:

"We have experienced the most sustained fall in living standards since the Great Depression," hummed Mervyn King, governor of the Bank of England.

Other verses appear without being credited to any particular author, as if they were part of the public domain, the common knowledge of all:

"The large banks [in opposing the conditions agreed upon in the Basel III round of banking requirements] are seeking to undo the moderate progress that has been made, using the very crisis they helped trigger as an excuse."

Sometimes verses appear speculating about what might have, could have, and should have happened:

"What could, and in the original design of the eurozone, should have happened was no financing, huge depression, falling nominal wages, massive defaults, and, after years of devastation, a recovery. This would have been adjustment without financing. What did happen was financing with quite limited true adjustment through ECB funding of dubiously solvent banks, and via lending from other governments and the International Monetary Fund, for Greece, and Portugal."—Martin Wolf, October 12, 2011 Financial Times.

On occasion, the singer gives voice to thoughts, and words so ignorant of history, that the very denial of the past appears as foreshadowing the future:

"Nor is a common fiscal policy sufficient for a successful monetary union. Neither the European Commission nor the German government can put tanks on the streets of Athens." John Kay, October 25, 2011 Financial Times.

Mr. Kay apparently has no knowledge of that minor event in the history of capitalism known as the Second World War when the German government did exactly put tanks on the streets of Athens. And if Mr. Kay has no knowledge of WW II, how can we expect him to have recognized the melody of the Horst Wessel Lied to which his words were synchronized?

Sometimes a verse is sung by a bozo bagman in charge of the bourgeoisie's government, who having filled his pockets with loot, his cabinet with girlfriends, and his bed with minors, gives voice to the stirring principles of popular sovereignty:

"No one in the Union can appoint themselves as administrator and speak in the name of governments elected by and made of the people of Europe. No one can give lessons to a partner."—Silvio Berlusconi, October 24, 2011. Note: Does not apply when giving lessons to Greece, Ireland, Portugal, or Hungary. No longer applies to Italy.

And sometimes the bozo bagman has to hog the spotlight, and sing more than one verse:

"Italy does not feel the crisis. The restaurants are full, the planes are fully booked, and the hotels are fully booked as well." –Silvio Berlusconi, November 4, 2011.

Followed by this:

"Reports of my resignation are without foundation."—Silvio Berlusconi, November 8, 2011.

Followed by this:

"Once this finance law is approved along with the amendment on everything which Europe has asked of us and which the Eurogroup has asked for, I will resign so that the head of state can open consultations." –Silvio Berlusconi.

And after all that, all that and more, the music is truly just beginning.

3. That the October 26 "plan"--in actuality nothing more than another discourse on wings, prayers, not so good intentions and who's paving and who's paying on the toll road to hell-- announced at the close of the EU's Brussels "summit" could be regarded seriously as a "breakthrough" revealed just how closely related are magical thinking and political economy in the defense of capitalist property.

The statement "welcomed" the progress evinced by Ireland, "the important steps taken by Spain," Italy's commitment to a "structural reforms," a "balanced budget," and another round of "important" steps taken by Portugal.

All these steps and reforms and commitments are precisely the opposite of what is claimed. These "commitments" are in fact the abrogation of previous commitments. All this progress amounts to is regression. None of these steps will balance any budgets. Progress here means increasing the level of poverty. Reform means preserving the republic of debt. Commitment means commitment to the rights, the liberty, the sovereignty of the bondholders. And this too is an expression of the immanent critique. Nothing is what the bourgeoisie say it is. Everything will be the opposite of what the bourgeoisie say it will be.

In the European Union, everyone's a partner, but some are senior partners and some are junior partners. The Brussels statement proclaimed:

The mechanisms for monitoring of implementation of the Greek programme must be strengthened, as requested by the Greek government. The ownership of the programme is Greek and its implementation is the responsibility of the Greek authorities.

Short version: do as we tell you to do, and we will be telling you what to do.

The statement continued:

…the [European] Commission, in cooperation with the other Troika [IMF, ECB] partners, will establish…a monitoring capacity… to work in close and continuous cooperation with the Greek government…and offer assistance in order to ensure the timely and full implementation of the reforms.

Short version: we told you we'd be telling you what to do.

Everyone's a partner, everyone cooperates, life is a party, and everyone gets an invitation and a prize.

Further:

The Private Sector Involvement [PSI] has a vital role in establishing the sustainability of the Greek debt. [The careful reader will note that according to the EU it is the debt that must be sustained, not the Greek economy, not the living standards or the welfare of the Greek people.] …To this end we invite Greece, private investors and all parties concerned to develop a voluntary bond exchange with a nominal discount of 50% on notional Greek debt held by private investors. The Euro zone Member States would contribute to the PSI package up to 30 bn euro. On that basis, the official sector stands ready to provide additional program financing of up to 100 bn euro until 2014, including the required recapitalization of Greek banks. The new programme should be agreed by the end of 2011 and the exchange of bonds should be implemented at the beginning of 2012.

Who knew that the summiteers of the European Union had such an acute sense of humor? Who would have guessed that Merkel and Sarkozy were the Nichols and May of debt restructuring?

The Brussels statement makes no mention of any restructuring of debt service amounts, neither the annual amounts nor the cumulative amount of debt service to be assessed to Greece as its cost for being invited to this party. The Brussels statement makes no mention of the duration of the new bonds to be issued in this exchange, the annual interest to be paid.

Just as financing is nothing [and in this case, literally], and refinancing is everything, the notional amount of the outstanding debt is nothing. Debt service is everything. The annual amounts of debt service are part of everything. The duration of the debt service is another part of everything. The cumulative debt service makes up the yield to maturity, and yield to maturity really is everything.

The Brussels statement explicitly identifies the willingness of the EU to absorb e30 billion in losses, and provide another e100 billion to recapitalize Greek banks as the banks would suffer severe losses and depletion of its core capital through this consensual bankruptcy. Moreover, the sovereign debt of Greece purchased by the ECB, or pledged to the ECB as collateral by private banks as part of the ECB's "unlimited liquidity" program would be sequestered from the exchange program.

But on the critical issues of yield, and duration, "mum" was the word. The silence speaks volumes.

"Here," says our angel Merkel non-Lovett, "take a seat and help yourself to 30 billion in meat pies. The barber will be right with you."

Cue the barber. From stage right enters Nick Sarkozy non-Todd, humming the Contours smash hit from the 60s "First I Look at the Purse."

"Who's next?" inquires Nick. "Have no fear. The razor is rubber, the scissors are plastic, and the clippers buzz but can't clip. I pretend to give you a haircut, and you pretend it hurts."

S. Artesian, 2 December 2011

address all comments to:

sartesian@earthlink.net

Volume 1

note: this analysis was originally intended to appear in Insurgent Notes 5. However it is unlikely that IN will appear before the end of December, 2011, and I do not believe that IN can be a significant weapon of analysis and agitation with this infrequency of appearance. I don't think TWR can become that weapon either, but at least there's less waiting. So I have "resigned my position," actually discontinued my presence on the editorial board of IN. I'm sure there will be further opportunities for collaboration and disagreement with the comrades of IN, and I certainly hope to remain personal friends with them.

Volume 1

Chapters, 7, 9, 11, 13

1. Radio Nowhere

By the time you re-read this, it will be obsolete. Greece will have declared bankruptcy, and the European Union will have to decide whether to issue EuroBrady bonds or implode, realizing too little and too late, that it, the European Union was an idea conspicuous only in its absence.

Housing markets will continue to contract with prices, and new starts marking successive monthly declines. Commercial real estate ventures will find themselves unable to refinance portions of the $1.4 trillion in debt, direct debt and asset backed securities, coming due in the next 6 months. “Re-defaults” will become the label attached to, and identified with this new wave of seizures and foreclosures.

Copper prices will continue to decline, followed by steep declines in oil, coal, steel prices, and both container and dry-bulk shipping rates.

World trade expansion will slow and stop at a level between its 2007 peak and 2009 low.

Paralysis in the markets will be matched and over-matched by actions in the streets as strike-waves course through the UK, Ireland, Spain, France, Italy, Greece, Portugal, Russia, Venezuela, Bolivia, Argentina, and Chile.

China’s real estate market, the focus of so much investment, so much construction, and so much debt will wobble, and then tumble with bond failures and debt delinquency reaching 40% of notional values. At the same time, and as a consequence, China will be gripped by the protests of the rural population fighting their dispossession from, and despoilment of, common lands.

In the United States, the Bank of America [with a perfect name and balance sheet to match] will have followed in the path of its European cousins, and will find itself locked out of the commercial paper money markets. Bank of America will then find its creditor of last resort, the Federal Reserve unable to, if willing, to accept the $100 billion or so in delinquent or foreclosed mortgages as collateral, as the Fed maneuvers to keep Europe afloat with open-ended currency swap lines. The collapse of BofA will make that of Lehman Bros. look, and feel, like a picnic, a walk in the park, fun. The bourgeoisie will think back and recall 2008 fondly, nostalgia being the one market strategy providing positive returns.

So with this guaranteed obsolescence in mind, let’s try to catching up.

2. Chain of Fools

The bourgeoisie stumbled through 2009 like a drunk staggering away from the car he just wrapped around a tree, thanking his god not so much for his life but for the bottle that remained unbroken in his pocket, because it was in times like these that a man really needed a drink.

That’s how the bourgeoisie spent 2009: bloody, torn, hooked up to a drip feed of morphine, vodka, and cash.

2010, however, was a different story, or at least it was supposed to be a different story. Supposedly, the wreckage had been cleared away. Supposedly all that intensive care had done the job. “Good as new,” said he as he tried out his new government issued legs, patted lovingly the bulge, his wallet, which meant he was happy to see everyone and there was a gun in his pocket.

He couldn’t wait to get back behind the wheel of his structured investment vehicle. Grabbing the keys and his bottle, he OJ Simpsoned his way behind the steering wheel, turned the ignition, took a long pull on the bottle, slammed the car into reverse and took off like a bat going into hell, backwards, only too eager to do what he did best—hit and run.

And that’s how capitalism careened its way into 2011, backwards, drunk, at a high rate of speed, smack into the concrete pillar that marked the spot where that tree used to be.

3. Pre-history

The recession of 1969-1970 signaled the end of the post-WW2 golden era for US capitalism. When the rate of profitability turned down under the over-accumulated weight of the means of production, the bourgeoisie adjusted the program of “guns and butter.” The guns would remain of course, since all the guns that mattered were theirs. And the butter? All the butter that wasn’t theirs was to become the target for all the guns that were.

The bourgeoisie in general, led or driven by the US bourgeoisie in particular, girded their loins and loans, screwed what courage they could find in others to the sticking point, and plunged into their great offensive; and offensive that is defined today as it was in 1973 by two events, dual assaults on the living standards, and the lives, of workers and poor. One assault was Pinochet’s upon the working class of Chile, accumulation by the bayonet. The other pincer in this maneuver was the OPEC-led price increase of oil, accumulation through the drill-bit.

Since then, the bourgeoisie have organized profitability, more or less, and more consistently than less, around reducing the living standards of the working class and the poor. Moving wealth up the social ladder and everybody else down, that has been the bourgeoisie’s ticket to business class.

For almost 40 years the bourgeoisie of the advanced countries have made their living in this practice of distressed accumulation, anointing themselves with West-Texas-Intermediate, as the great liquidators.

In the past, the bourgeoisie had revised their old algorithm of accumulation— “to get rich by appropriating the unpaid labor of others”—and more than once. In their attenuated rule, they had deployed and employed version 2 of the algorithm—“to get rich not by appropriating unpaid labor of others, but by pocketing the wealth accumulated by those appropriating the unpaid labor of others”—pretty much on a daily basis.

The version deployed in the late 1970s, expanded and refined in the 1980s, deregulated in the 1990s, and practiced in the new century with religious, and scientific, quantified fervor almost obscured its own genesis in the original algorithm, v.3 read—“to get rich by liquidating that wealth pocketed from those who had accumulated it by appropriating the unpaid labor of others.”

Capital is nothing if not increasingly derivative, and the truths of these derivatives of accumulation is the same as the truths of the derivative investment products in the financial markets: there is no value intrinsic to, produced in, provided by the derivative product while, at the same time, the derivative in its value-less-ness is the fully developed expression of the mode of production that transforms products into values, and surplus product into surplus value.

4. Ask the Angels

If the bourgeoisie have been at this for almost 40 years, if successive assaults on wage rates, benefits, employment, health, education, any and every apparent manifestation of social equality, if all that has been the order of the day for the last 14,000 days, is there anything really that different about the current conditions, the current configuration, the current predicament of capital? Is this, the period beginning in December 2007, a crisis?

Certainly, the historical data confirms the assault of capital on labor—the decline in the number of industrial workers, the disproportion between improved labor productivity and labor’s declining share of the national income; the increasing numbers of temporarily employed, marginally employed during periods of “expansion,” the increases in numbers of unemployed and the duration of unemployment during contractions; the numbers eligible for and dependent upon on food stamps; the rise in children born into poverty. Statistics like these earn economics its label as the dismal science, which label, like everything else about political economy is half-right and all wrong. Dismal? Without question. Science? Not exactly.

Marx in volume 3 of Capital puts it this way:

Crises are never more than momentary violent solution for the existing contradictions, violent eruptions that re-establish the disturbed balance for the time being. [Marx, Capital, volume 3, Chapter 15, “Development of the Law’s Internal Contradictions,” p. 357, Penguin, 1981.]

A crisis can persist for several years. But if an economic condition, pattern, predicament has lasted for 40 years, it’s not a crisis, it’s a business plan.

Certainly, the condition of capitalist accumulation during the last four years can accurately be characterized as critical—desperate, urgent, and… necessary.

However, the last four years qualify as something more, much more than a crisis. They count as a period when the crisis mechanism has been proven inadequate to re-establishing “the disturbed balance for the time being,” because, in part, there is no “balance” disturbed or otherwise to be restored, and because there is no longer time “for the time being.”

5. Just a Word…

Too much is never enough when it comes to summer, Beethoven, October baseball, and the Rhythm Revue dance party [www.classicsoul.com]. Too much, however, is made of the notions of “balance” “equilibrium” “proportion” as the normal, and normative conditions for capitalist accumulation… as if capitalism requires balance, aims towards equilibrium, produces proportion as necessary conditions of its reproduction…as if capitalism periodically disturbs the scales that have balanced, upsets the equilibrium that exists “naturally” in the economy, overturns the proportions between and among the sectors of its economy, and those are the reasons for capitalism’s short-term crises and structural decrepitude. Even Marx refers to “restoring the balance” in his discussion of crisis.

Balance, equilibrium, proportion are moments in capitalist reproduction and not determinants of that reproduction. Balance is something that exists mostly, and most conspicuously, in its absence. Equilibrium, as is the case with its political sibling equality, is a purely formal and superficial designation in political economy, an advertising program.

Imbalance, disproportion, disequilibrium are likewise moments in capitalist reproduction. However, unlike balance and equilibrium and proportion, which are random occurrences in the reproduction of capital, disproportion, imbalance, disequilibrium are essential to that reproduction. These form the intra-mediations of capital—the mechanisms by which capital concentrates itself, centralizes itself, aggrandizes parts of itself on behalf of its whole.

In the Marx’s critique of political economy, his explication of the critique immanent to capital at all moments and in all facets of its existence, dynamic disequilibrium, punctuated imbalance, chronic disproportion are revealed as the truth of that whole.

Imbalance and disproportion are everyday expressions of the laws of accumulation and stand in relation to those laws as price stands to value, that is to say the agent of the laws.

6. Taking the K.A.S.H.

Capitalism’s recovery from the 2001-2003 recession was not organized around expanding consumer credit, reduced interest rates, or “exuberance”—rational or irrational. That recovery had two sources. One was the rigorous control of capital spending. The sustained increases in capital spending during the 1994-2000 period had driven profit rates down from their 1997 highs. Expansion continued after the profit rate turned, as it usually does. What’s the point of all that investment if it isn’t used to increase the mass of commodities forced into the markets?

Expansion in the information, communication, and transportation sectors of the US economy were particularly acute, as logistics were better controlled, and logistic costs [warehousing, transportation] declined throughout the economy. Transportation, communication, logistics—for capital to complete any of its metamorphoses, it has to move, or rather be moved, even if the movement is but a representation, an image, a cascade of zeros and zeros + ones that define the virtual content of the current reality.

By the end of this communications and control “revolution,” it was estimated that 97 percent of all fiber optic cable installed in the United States was dark, carrying no signal, no data; without function. Function, under capitalism, is a bit different and a bit more than simple use. Function is a capital relation, a social quality, where and when the commodities enter into the reproduction, the expansion of the mode of production; where and when in fact, the commodities “live” by giving up their “lives”—the value accumulated, embedded in them—to more production, that is to say to the aggrandizement of more labor. A fiber optic cable exists to transmit data point to point, but capital survives only by engendering more capital.

The bourgeoisie, after 2003, were determined to enforce that survival by consuming their fixed assets without replacement for as long as possible.

This certainly wasn’t the first time the bourgeoisie had attacked the accumulation of fixed assets. For years, the bourgeoisie had been engaged in asset-stripping, asset-liquidation schemes involving industrial, manufacturing, and transportation companies.

Somebody somewhere had figured out that the parts were worth more than the whole, as long as the whole could be made smaller. So, a private equity company using a leveraged-buyout shell corporation would launch a tender bid for outstanding shares of a target company, particularly a manufacturing company.

The target would be acquired, and the asset-strippers would take the company private. With the company now private, with the asset-strippers in control of the target’s cash and cash flow, the asset strippers would award themselves a special dividend, with the target company assuming high levels of debt to make the payment. Then, with the target burdened with debt, the strippers would begin selling off the businesses of the company, using these revenues to retire portions of the debt, while rewarding themselves with further cash payments.

At the end of this process, what remained of the target was just that—remains.

This technique was honed to its imperfection during the reign of that idiot-hero of capitalism, Ronald Reagan.

In the Reagan version of liquidationist capitalism, industrial production was subordinated to finance. The huge cash pools generated in asset liquidation flowed through and to the banks, and leveraged the banks’ control.

In the Bush version, that is to say the idiot’s version of the idiot’s version, the restraints on fixed asset accumulation and the attack on wage rates effectively detached the major industrial and manufacturing corporations from dependency on bank financing. In the European Union banks provide 80% of the financing for non-financial corporate sector, while in the US only 30% of the financing is provided by banks. It’s not that “cash is king” for US industries. It is that “cash generation is king.”

And the banks? With the distinction between commercial and investment banks abolished, and with their access to a portion of the profits generated in production severely restricted, the banks turned with renewed zeal to the next best thing, securitized consumer lending. The difference between securitized consumer lending and corporate is that lending to corporations involves a claim against future earnings, future extractions of surplus value. The securitized consumer debt was established as a trading position where there were no earnings to be claimed, except from the counter-party to the established position.

The “asset” itself was dead, having become an object of consumption. Restoring such an “asset” to the assumed imagined life of capital, of the commodity, required the collateralization of the security representing the asset. Since there were no future earnings to be generated by the asset, since the asset did not and could not reengage with wage labor, the collateralization of the security encumbered the assets with levels of debt that required the devaluation of any collateral so encumbered. Sooner or later, the value supposed to exist in, actually superimposed upon the collateral, had to prove itself as a cash value. “Dead” assets can only prove their value through their liquidation. The asset-stripping liquidationist bourgeoisie had proved that in the 1980s by killing “live” assets through the assumption of debt, hadn’t they?

The bankers, hedge-fund traders, structured investment used-car salesmen, our no-memory, history is bunk, short-attention-span buccaneers forgot that. In taking their trading positions, in creating their structured investment vehicles, in committing their collateral to the securitized debt, the banks were, in effect, sheep thinking they were leading lambs to slaughter only to find that mutton was the menu of the day on the killing floors.

When the new home construction market peaked in 2006, and then began its decline in 2007; when HSBC reported in 2006 that increasing numbers of its mortgage borrowers were falling into delinquency; when the rate of return peaked for non-financial corporations in 2006; when oil prices exploded in 2007, channeling profit to the energy companies, sooner and later both came together in the collateralized debt, asset-backed securities market. Devaluation raced through the network of parties and counter-parties like the Spanish influenza. The markets froze. The securities could not be valued by the markets as the underlying assets themselves were value-less.

7. Stuck in My Car

The Great Recession officially began, according to the US National Bureau of Economic Research, in the 4^th quarter of 2007. The depth of the contraction was the sharpest since the Great Depression of the 1930s. Comparing 2009 to 2008, the manufacturing sector eliminated 15% of its work force, cut 15% of its wage bill for production workers, reduced production hours by 16%, shipped products amounting to 19% less value, and allotted 22% less for capital expenditures [figures from the US Census Bureau Annual Survey of Manufacturers: http://fastfacts.census.gov/servlet/IBQTable?_bm=y&-ds_name=AM0931GS10].

The reward for these efforts materialized in improving rates of return on net property, plant and equipment. After-tax profit as a percentage of the net PPE which had measured 2.6% in the 1^st Q2009 improved to 7.5% in the fourth quarter. By the 4^th Q2010 the rate had reached 9.5%, and in the 2Q 2011, the ratio reached 12.5%, praise the lord [figures derived from the US Census Bureau Quarterly Financial Report http://www.census.gov/econ/qfr/]

Here’s where things start to get sticky. And to slow down. The boost to profits has been provided exclusively to the rate of profitability and not to the mass of profits. Manufacturing profits after taxes remain 30% below their 2006 peak, and 20% below their 2007 level. The recovery from the 2009 low has been provided almost entirely through the decline in the wage-bill. Fixed production assets in manufacturing, transportation, circulation have not been reduced, consumed, liquidated. In 2007, US fixed assets in the agriculture, mining, utilities, construction, manufacturing, transportation, and information sectors totaled $8.148 trillion. In 2010, that total had grown to $8612.6 trillion.

As production increased through 2010 and the first half of 2011, growth in profits was driven by increased productivity of labor—more and more fixed assets were brought online and more and more output was extracted from the [reduced] units of labor. Such growth is circumscribed by the labor so employed. So as expansion increases, more labor will be demanded, and consumed for each [declining] increment of increased production. “Speed up” increases in productivity must inevitably slow down. Further increases in output require a disproportionate increase in working hours, increasing workers’ compensation and unit labor costs as fixed assets themselves can no longer amplify the productivity of labor. Despite the continued low utilization rates, bringing greater fixed assets back into production will undermine the very basis for the recovery as the wage-bill climbs.

On October 13, 2011 the US Bureau of Labor Statistics reported that, compared to the 1^st Q 2011, productivity in the 2^ndQ 2011 for the non-farming sector decreased 0.7% as output increased 1.2% while working hours increased 2.0%, leading to a 3.3% rise in unit labor costs. Unit labor costs in manufacturing increased 4.6% on a quarter to quarter basis, but only .4% on the year to year basis.

This is not a “wage-push” eroding profitability. It is a capital constraint upon profitability, and will result in first, a flattening of the profit curve, and then a real decline in earnings. It is precisely that [fore]shadow of the decline in earnings that has brought our capitalists full circle from greed to fear to panic.

Without improving earnings, the remaining overhang of non-performing debt—perhaps some $2 trillion in mortgage based debt in the US alone cannot be mitigated. The banks cannot be rescued, again. The sovereign debt of the EU “periphery,” and the debt-holders, cannot be protected from the gathering tidal wave of devaluation. This is what drives the bourgeoisie into both expanding belligerence and increased paralysis.

Now certainly, there is no established, fixed decline the rate of profit below which capitalism cannot function, cannot recover. But there is also no decline in the rate of profit that capitalism, and its personified agents, the bourgeoisie, can afford to ignore, dismiss. The bourgeoisie understand this, even in their panic, especially through their panic.

The next “round” in the capitalist cycle of devaluation has already begun. The thing about accumulation is… well, that it accumulates; that the problems to the reproduction of capital, and the impairment of the reproduction of capital are indeed, cumulative The response of the bourgeoisie will be, and necessarily, even more of the same, “more” in such quantity that it becomes qualitatively different—with levels of privation, brutality, and immiseration imposed upon the working class different in degree and kind, with destruction of the accumulated assets of capitalism weighing like a concrete overcoat on the backs of the living. The response of that and those living must begin with “de-funding” the source of devaluation, the debts, and then removing the source of the debts, the capitalist mode of production.

S. Artesian

October 19, 2011

OWS #4

OWS: The Fourth Time's the (Maybe Lucky) Charm

We are not seeking to gain recruits for anything, nor trying to building an organization. Rather, we only want to share a perspective thus far not articulated here, though implicit in the collective, practical organization.

The mayor, a true member of the ruling capitalist class, who literally bought his three elections, has decided that enough is enough, so, after conferring with his long-time girlfriend, who sits on the board of directors of Brookfield Office Properties, which supposedly owns the occupied park, has decreed that the park be cleaned.

Apparently, the bankers and landlords are worried that the presence of food and drink will attract rats. Bankers, landlords, politicians complaining about rats? You can't make this up. Is there no species loyalty among these brothers of the fur?

New York is what it is, it has become what it is only because it's been home to the rats, vermin, plague vectors of capitalism for two hundred years.

And now the mayor says he wants to clean up a park.

This movement must move explicitly against the private ownership of public space by resisting any attempts at eviction and allowing the so-called owners to use the cops to impose their made-up rules. All open space should be commons, as this space is in reality now, not private nor even municipal, but of and for the common people, which is, first and foremost, the working class, coming together.

The mayor has repeatedly declared New York a "luxury brand," thus openly stating that the working class should not appear in it. Yes, they have to be in the kitchens, run the subways, and clear the ridiculous amount of trash this society produces, but they—we—should be as invisible as possible.

Two points here: (1) All capitalism produces in its center these days is its trash (junk food, junk bonds, useless packaging, etc.), and this has to end; we need to create situations that momentarily create more unemployment, both high-end and low-end, by obliterating brokerage houses and banks and fast-food joints, as well as so much more, so that we can start creative, collective action that begins to transform this fucked-up world; and (2) we need to extend the commons as far as is possible, taking the collective, practical activity of this occupation back into our daily lives, else the leftists and the union bureaucrats they support (and often are) shall turn this all on itself—and Bloomberg's class will win again.

Many here are too young to remember that in Paris, in May 1968, while eleven million workers occupied their factories and other workplaces, the bourse (the Paris stock exchange) was torched. As we have previously said, Wall Street needs to be abolished for human freedom and dignity to advance.

And the mayor must be physically driven from office, but not allowed to leave this city. We cannot shift our burdens onto the backs of the workers in Bermuda, London, etc.—wherever this martinet has a home, an apartment, or access to a hotel. Only through the public defrocking of this minister to finance can the ignominy of his being able to buy his moralistic dictatorship be removed.

Practically, if the cops move to evict, seniors/retirees and so called 'tweens—symbolic grandparents and grandchildren—must move to the periphery, so that all can see the assaults on them, thus causing students and teachers and workers of all sorts to join . . . and push these fucks into the river.

R. Ryder

Oct 13, 2011

WHEN PUSH COMES TO SHOVE

Third in a series, meant to be freely copied, printed, distributed. No credit required. Plagiarism greatly appreciated.

Push always comes to shove when the issues are power, property and the continued flow of the mean green that produces the bulge in a banker's pants that says both that he's happy to see you and he has a gun in his pocket.

So first the whining, sniveling billionaire mayor of New York [an imposter, imported from Boston as if the disaster of the 2004 American League Championship Series wasn't enough punishment for the errors of our ways in tolerating the Steinbrenners for 30 years] announces that the OWS protests are not "productive" as they threaten two of the three pillars of NYC's pre-apocalyptic economy-- banking and tourism. The other pillar, as yet unthreatened by those camped out in lower Manhattan, is real estate.

In a bit of psychotic doublespeak worthy of the idiot-hero of capitalists everywhere, Ronald Reagan, the mayor states: "The protestors that are trying to destroy the jobs of working people in the city aren't productive."

What a man of the common people, what a fighter for the working stiff our mayor is, as long as the stiff is taking down a seven figure income, utilizes limousines, and subscribes to the Bloomberg news feeds.

When in 2008, the men and women working at the Stella D'oro bakery in the Bronx went on strike against that company's attempt to cut wages and benefits, the mayor wasn't making pronouncements about the "unproductive" attitude of the owners, Brynwood Partners. The mayor wasn't complaining about the fact that between 1991 and 2008, the various owners-- Nabisco, Kraft, Brynwood had reduced employment 80 percent, destroying some 400 jobs of working people in New York.

When the NLRB found that the company had improperly refused to bargain with the workers' union, our mayor didn't send in the police to restrain the Brynwood Partners, to teach them a lesson at the end of a cop's baton. He didn't express his outrage that these owners, these outside agitators based in Greenwich, Ct. could so trample on the image of this wonderful city.

When Brynwood Partners announced, directly after the workers had won the strike, that it would be closing the Bronx factory, destroying 134 jobs, did the mayor take a time out to denounce that unproductive action of the owners? Why even ask?

In the "recession" that "ended" [!] in June 2009, over 8 million jobs were lost. Since the start of the recession more than 2 million homes have been foreclosed upon or are in the foreclosure process. Housing construction and related services which accounted for 1/6 of the US GDP prior to the contraction is now at 13% of GDP. Poverty rates are increasing and one-fifth, 20% of the children in the United States are born into poverty.

So...who's destroying whom? Who's zoomin' who around here, and around the world?

We know that every time Bloomberg opens his mouth he's speaking as the representative of that billionaires boy's club. And we know that behind, or now as push comes to shove, in front of that boy's club stand the ranks of the cops with their billy clubs.

While the bankers go home to their gated communities, their spokesman turns NYC into a "penned-in" community.

The police will be ordered to move against the OWS demonstrators, and we must move to counter the police.

Our response requires students across the city, in high schools, colleges, universities to walk out of their classes.

That their teachers walk out.

That transit workers refuse to handle vehicles commandeered for and by the police.

That teamsters hot cargo deliveries to all city agencies except hospitals, fire departments, libraries, and the various welfare agencies.

Our response requires that the working people organize themselves against this government of, by, and for financiers.


October 10, 2011

OWS AGAIN

AS LONG AS THE WORKING CLASS DOES NOT IMPOSE ITS OWN SOLUTIONS, THE CAPITALIST CLASS WILL CONTINUE TO IMPOSE ITS OWN - CONTINUING TO KILL US ALL AND AT A SWIFTER RATE.

The are but three classes under afterhours capitalism: (1) a tiny, venal capitalist class intent on extracting profit whenever and wherever it may the world around; (2) an ever-recreated "middle class," made out of small business owners of all sorts, gangsters and racketeers everywhere, of course cops and private security combines, professionals of all sorts, and bureaucrats of the State, capitalist enterprises, and the so-called opposition; and then there is (3) the atomized working class, those with no power over their own lives whether fully conscious of it or not, but alone possessing the potential power to bring it all down.

We have let these recent confrontations be termed fights to save the so-called middle class. The working class, true object of the attacks, has been allowed to be "disappeared," a la South America thirty years ago. And the trade union bureaucrats - dwindling brokers of labor power - are complicit in this; just look at the leaflets or listen, if you can bear, to the speeches of their truly middle-class officers and staff.

Rest assured, this is not a final crisis for the capitalists unless we collectively make it so. The class origins of those out here demonstrating against the banks and corporations matter little unless and until they align themselves with a working-class program that calls for the immediate end of capitalist relations here and worldwide albeit in a transitional way - we shall need growing elements of the middle class such the growing numbers of small farmers growing healthy food for the foreseeable future, likewise healthcare professionals not in the thrall of Big Pharma, willing to fight global obesity and myriad other diseases caused by capitalism. And we will need educational professionals dedicated to keeping literacy alive. Such a transition must guard against measures which might allow for retrogressive slippage and must support all movements anywhere likewise demanding richer lives beyond value.

And if we begin to win, even in small sectors - hardly a safe assumption-- we need to start living life better collectively, and not in the "future," but right now. There will be sacrifices, even deaths ... but we must not sanctify them. We must get through to lives beyond capital as soon as possible.

The struggle will be more violent than many of us might hope - as it has been each time the working class has contested capital's advances over the past two-hundred-plus years. The capitalist class will not relinquish its power short of what amounts to genocide, region by region, reducing wage-labor to slave-labor. once again. The unstable middle class will split asunder; most shall become stormtroopers for their capitalist rulers as the cops and Tea Party cretins already are, and a minority will think they alone can lead the working class to victory, given what they assume to be their superior knowledges(s) or organizational skills. Stuff and nonsense....nothing other than a choice between pathologies.

It is these middle-class idiots who staff the ever-dwindling and continually compromising unions who are only capable of a "trade union consciousness." This is their ace in the capitalist whole,The working class alone can end capitalism and thus all class society.

R. Ryder
October 2-3, 2011

R. Ryder is a friend and collaborator

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