Latest Article Roundup From Ajax The Great (Pete Jackson)

By Ajax the Great (Pete Jackson)

(Originally posted on the True Spirit of America Party blog and the Vive La Difference blog)

HOW TO DEFUSE THE QUADRILLION DOLLAR DERIVATIVES BUBBLE (PART DEUX)

Last year we discussed the QUADRILLION dollar derivatives bubble and the risks that come with it.  Well, guess what?  That bubble is still there, just WAITING to pop, and thus drag down the rest of the economy with it as well due to is massive size and interconnectedness.  And it has only grown dramatically since the last major financial crisis and Great Recession in 2007-2009.  

Ellen Brown recently wrote another excellent article about what to do about it.  She notes how this dangerous derivatives bubble was no accident, but came into being via deliberate deregulation that specially privileged derivatives.  Repealing the Glass-Steagall Act in 1999 was only the start.  In 2000, the Commodity Futures Modernization Act (CFMA) not only removed derivatives from any sort of federal oversight, but it also declared them be legally enforceable, a privilege that NO other bets have ever historically enjoyed.  (Let's face it, derivatives are literally nothing more than glorified bets.)  Then in 2005, the Bankruptcy Act gave derivatives extra special "safe harbor" protections as well.  And after the Great Financial Crisis, a crisis in large part caused by wanton derivatives speculation, what law was passed to pretend to tame this out of control casino? You guessed it:  the Dodd-Frank Act of 2010, a band-aid which only further entrenched the fundamental derivatives problem that was left to fester. 

That is, fully legalized and unregulated gambling with other people's money on a truly gargantuan scale by the ultra-rich, using very questionable and opaque financial instruments, all backed by special privilege and protection of the law, is still very much a thing, alas.  And like any casino, the house (the oligarchy) always wins.  Privatize the profits, socialize the losses.  Heads, they win, tails, We the People lose.

Talk about moral hazard! 

Clearly, repealing Gramm-Leach-Bliley (the 1999 law that repealed Glass-Steagall, thus reinstating the latter), repealing the CFMA especially, repealing the "safe harbor" protections in the Bankruptcy Act, and repealing Dodd-Frank should be the absolute highest priorities to defuse this massive ticking time bomb.  No doubt about that.  That is, we must regulate derivatives at LEAST as stringently as they were in the 20th century, if not more so.  Additionally, a modest financial transactions tax (say, 0.1% on all transactions) would also be a good idea as well.  The latter can alternatively be achieved by raising and expanding the current SEC Fee to include ALL financial instruments equally, including derivatives.

We should also jettison the largely inaccurate term "hedge fund" from our collective vocabulary as well.  They should really be called "speculation funds", since that is what they really are in practice.

Oh, and to the FERAL Reserve:  CUT INTEREST RATES YESTERDAY!  And stop Quantitative Tightening yesterday as well.  It is really playing with fire in the worst way right now.  KNOCK IT OFF.

The aforementioned items would be enough to defuse it in the near term, while the following items would be to clean up the damage and/or prevent it from happening again in the future:

• Ban the practice of "quote stuffing" and other practices of deliberate market manipulation.
• Ban stock buybacks by corporations.
• Going forward, ban any and all types of new and exotic derivatives that are not completely transparent.  Opaque derivatives based on sketchy underlying fundamentals should be considered fraud, plain and simple. 
• Absolutely NO more bailouts OR "bail-ins" of the banks ever again, period (but of course depositors should still be made whole per the FDIC, with no apologies to any ultra-purist libertarians or paleoconservatives).
• Implement "Quantitative Easing For (We The) People" (that is, with direct payments to individuals, not banks) as needed.
• Phase out the practice of "fractional reserve banking" by very gradually raising the reserve ratio requirement until it reaches 100%.
• Fully nationalize the largely privately-owned FERAL Reserve to make it truly FEDERAL for once.  And established state and local public banks as well, like North Dakota currently has.
• And last but not least, all banks that are "too big to fail" are really too big to exist, and should thus be either forcibly broken up, taxed heavily, or nationalized as public utilities.  YESTERDAY!

In the meantime, we all need to brace ourselves for a possible financial crisis and recession in the future.  It is highly unlikely that Congress will act in time, as they are largely bought and paid for by Wall Street and the big banks (who also largely own the FERAL Reserve as well).  But don't fall for the idea that we should withdraw all of our money now, as that would literally be a self-fulfilling prophecy (causing a bank run).  The FDIC guarantees the first $250,000 per depositor per bank, so unless you have more than that (and didn't put it in multiple banks like you should have), it does not make sense to do so.

So what are we waiting for?

NEOLIBERALISM:  THE RELIGION OF THE WORLD, FLESH, AND DEVIL (UPDATED FOR 2024)

Neoliberalism.  It is a rather obscure-sounding term with a somewhat nebulous meaning.  It's anonymity and vagueness shroud it in mystery.  And yet, it is the very ideology at the root of most, if not all, of the modern world's problems.

So what is it, exactly?  It is best defined as a dogmatic belief in the inherent superiority and supremacy of unfettered free markets and privatization (and commodification) of nearly every single thing in the Universe.  Inequality, however extreme, and even greed itself is recast as virtuous (think Gordon Gekko of Wall Street).  The rich and the poor deserve their lot in life, because reasons.  Or something.  Poverty is in fact a feature, not a bug, as the resulting desperation makes people that much easier to exploit via economic coercion.  People are just objects to be used, as are animals and Mother Nature herself.  Citizens are reduced to mere consumers and wage-serfs, if not full-blown slaves.  And like the robber barons of old, today's high priests of neoliberalism are totally fine with robbing from the poor, giving to the rich, and torpedoing what's left of the middle class.  The only difference is that nowadays they typically do it with a smile and a veneer of pseudo-progressivism, while laughing all the way to the bank (often quite literally).

Neoliberalism's warped and twisted code of pseudo-ethics harbors a massive, gaping void that is essentially a moral black hole, since this ideology lacks a truly moral and spiritual component underneath it all.  Its entire foundation is shaky, empty and morally bankrupt, totally rotten to the core.  And yet, it has such mass appeal on both the (pseudo-)left and right of the political spectrum that it transcends that very spectrum.  And while neoliberalism is clearly the darling brainchild of patriarchy, it is such a wily and devious shapeshifter that it even transcends patriarchy itself as well.

From Reagan to the Clintons, Thatcher to Blair, Milton Friedman (who first coined the word neoliberalism) to Thomas Friedman, Greenspan to Powell, Facebook to ExxonMobil, Purdue University to Perdue Chicken to Purdue Pharma, Trump to Trudeau, Obama all the way to Biden, and Boris all the way to Natasha, it seems like no mainstream or pseudo-alternative politician, ideologue, technocrat, maven, or tycoon has been able to avoid being infected by neoliberalism to one degree or another, and sucked into its lifeless, soulless abyss.

(Trump, with the notable exception of opposing some of the "free trade" component of neoliberalism, otherwise supports essentially all of the rest of their evil and demonic agenda in practice, his disingenuous rhetoric to the contrary notwithstanding.  And ALL neoliberals, Trump included, are largely anti-union in practice, if not also in theory as well.)

Though secular in nature, neoliberalism has all of the zeal of a religion, even a fundamentalist one.  And its dogmas have basically become the new orthodoxy from about 1980 onwards.  And we can thus conclude that neoliberalism is essentially the religion of the world, the flesh, and the devil, filling the voids left by the implosion of the mainstream patriarchal religions.  One can even call it a cult as well.

In Christian theology, the "world, flesh, and devil" have traditionally been considered the three primary enemies of the soul, as a sort of "unholy trinity".  Now, I personally believe that there is some nuance to this in that the world is only evil because of who rules it (i.e. the devil who works through men, particularly the oligarchs and their sycophantic lackeys), and the flesh is only evil when we choose to make it that way, since matter is essentially just a slowed-down form of spirit.  Neither of these first two are inherently evil or irredeemable in themselves.  But under the current regime of patriarchy, living exclusively for these two things is believed to ultimately lead to the third member, the devil.  Or wetiko, if you prefer.  Whatever it is, it is pure evil energy that cannot ever be redeemed.  And neoliberalism, in its sheer vileness, vainglory, often gratuitous cruelty, and wanton idolatry of money and worldly power above all else, effectively worships all three members of this unholy trinity.  There is really no denying that at all.

The rise of selected flavors of Christian (and other religious) fundamentalism since the 1980s has NOT stemmed the tide of neoliberalism, and the two increasingly seem to be joined at the hip nowadays.  And while patriarchy is currently in its death throes as we speak, the implosion of patriarchy and patriarchal religion is clearly non-linear, erratic, and chaotic.

And most notably, the recent rumors of neoliberalism's supposed death from the COVID-19 pandemic have been greatly exaggerated.  And by that, we mean that, if anything, neoliberalism has actually GAINED strength overall from the lockdowns and related restrictions which effectively robbed from the poor, gave to the rich, and torpedoed what was left of the already shrinking middle class.  It was basically the heist of the century, if not the millennium.  And not only did these draconian measures not appreciably save lives in the long run, they actually cost lives, particularly among poorer people and people of color who got the brunt of both the virus itself AND the collateral damage disproportionately shunted onto them while the affluent got to "work from home".  There was certainly nothing genuinely leftist or progressive about doing that!  And the novel experimental gene therapies that self-identify as "vaccines" have been not only a major cash cow for the oligarchs, but also have been (via mandates, "passports", and segregation) an effective weapon of power and control over the masses, especially via divide-and-conquer.  Not to mention, dare I say, a bioweapon as well, given all of the excess deaths, injuries, and disabilities (sorry, "coincidences") that have resulted from these concoctions.

The pandemic is long over, and all restrictions have ended as of last year, but the legacy and precedent still remain.

And, of course, Women have clearly gotten the brief end of the stick from the pandemic response as well.  Lockdowns had increased male-on-female domestic violence and Women had lost more jobs than men have as well.  Meanwhile, the majority of designated "essential" (read: expendable) workers have also been Women as well, especially in healthcare.  And school closures have also forced Mothers to either 1) stay home with the kids and lose income as a result, or else 2) take on a triple burden by trying to juggle it all at once.  It has led to nothing short of a collapse of Women's health and work.  Thus there is clearly nothing even remotely feminist about these toxic and illiberal policies, but rather these are things that neoliberalism salivates over the most.  The Rockefellers and their cronies must be grinning from ear to ear right now as we speak.  And while these pandemic and lockdown-related phenomena are over, there is no denying that it set the Women's movement back decades, and no sooner has the movement only begun to recover, than the right-wing reactionaries and counterrevolutionaries are trying so hard to drag Women back to Margaret Atwood's worst nightmare as we speak.  And that counterrevolution, of course, is also in league with...you guessed it...neoliberalism. 

TO HELL WITH NEOLIBERALISM!