"An angry army to give the government back to those who have always been the champions of special privilege" (Brian) by Winston

The contemporary recruitment of which could have been started at the "tea parties"??

J'Accuse! (Aug. 19, 1939) Sen. Claude Pepper (who himself later became a Cold Warrior), from The Progressive:

Class Struggle Heats Up, Bankers on the Ropes, Geithner Must Resign (Keith) by Keith

Today's Financial Times has the banner headline "Banker fury over tax 'witch-hunt." The article has quotes from dismayed bankers: 

"Introducing this 90 per cent tax is like taking the the fiannce industry out the back and shooting it." --London Bank Exedcutive 

"The tax measures will send the U.S. back to the stone age." 

-Frankfurt Banker 

"It is like a McCarthy witch-hunt"

Wall St. banker (who deosn't know much about history)

"The is the most profoundly anti-American thing I have ever seen."

-Wall St. Banker 

the quotes show Financial Capital is starting to swaet and they are taking a lot of punishment, we must make sure that Obama doesn't lose the will to take the fight to the end. Geithner must be our target, he is financial capital's the weak link. 

Tim Geithner, the Treasury Secretary and former Goldman Sachs exec, and sturdy ally of financial capital is under increasing pressure to resign. The Financial Times and the Financial Capitalist class for which they speak have been defending Geithner (last week the FT wrote an editorial defending Geithner and today McCain came out asking the country to give Geithner a chance).  

We should go all out against Geithner but we must combine the demand that he resign  with the demand that his successor not have a history in the finacial sector, -- someone like Eliot Spitzer (As Client #9 Spitzer is out but we need someone like him) or Paul Krugman. 

Class Struggle and AIG (Posted by Keith) by Keith

Eliot Spitzer, the “disgraced” former Governor of New York  (he was caught with an expensive prostitute but he was “caught” as a part of the class struggle—he had been going after financial capitalist before it became a congressional past time, and they brought him down in a scandal) published this essay in Slate.com this week.  Although he speaks about “insiders” rather than the financial capitalist he points out the relationship between AIG and Goldman Sachs.   Goldman Sachs is basically merged with the U.S. state and have their tentacles all over Obama’s administration.  An immediate task is to defeat the financial class within the Obama administration.  Jim wrote a nice essay about some of the class struggles within the Obama administration. 

Here is the Spitzer article:

The Real AIG Scandal

It's not the bonuses. It's that AIG's counterparties are getting paid back in full.

By Eliot Spitzer

---

Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?

For the answer to this question, we need to go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall. Post-Lehman's collapse, they feared a systemic failure could be triggered by AIG's inability to pay the counterparties to all the sophisticated instruments AIG had sold. And who were AIG's trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.

It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure. The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.

But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?

The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.

So here are several questions that should be answered, in public, under oath, to clear the air:

What was the precise conversation among Bernanke, Geithner, Paulson, and Blankfein that preceded the initial $80 billion grant?

Was it already known who the counterparties were and what the exposure was for each of the counterparties?

What did Goldman, and all the other counterparties, know about AIG's financial condition at the time they executed the swaps or other contracts? Had they done adequate due diligence to see whether they were buying real protection? And why shouldn't they bear a percentage of the risk of failure of their own counterparty?

What is the deeper relationship between Goldman and AIG? Didn't they almost merge a few years ago but did not because Goldman couldn't get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG's business model was not to pay on insurance it had issued.

Why weren't the counterparties immediately and fully disclosed?

Failure to answer these questions will feed the populist rage that is metastasizing very quickly. And it will raise basic questions about the competence of those who are supposedly guiding this economic policy.

Banks to Card Debtors: Pay up now!!...Please??? (Brian) by Winston

The credit card biz used to love people with "a taste for credit" -- folks who kept high balances and more often than not paid barely above the minimum. But alas, the party is over. As the economy circles the toilet, credit card banks are reversing course -- offering incentives to pay off balances quickly so your debt balance is off their books like so many other "toxic assets." It's an interesting reversal of a long-standing policy that your balance was a good thing (I wrote about that policy a bit more indirectly here on this blog).

So why do we care? Well, they're in a panic. The banks don't know which way is up. A few weeks ago, the message was, "Buy stuff!!" Now it's, "OK - How can we make you go away?" It is times like these that a re-orientation of our relationship to debt and banks, like a debtors' union or a "bank strike," becomes more viable. The "cultural space" for (the popularization of) resistance is growing, if you will.

PS - By the way, as you might have figured out, "You are not your credit score!" rings truer because you can't even trust the accuracy of that score to begin with.

Thanks, capitalism - enjoy retirement.

Reply to the David Graeber article Brian posted (Jim) by der Augenblick

I thought Graeber made an interesting point in the article Brian posted yesterday:

For at least 5,000 years, before capitalism even existed, popular movements have tended to center on struggles over debt. There is a reason for this. Debt is the most efficient means ever created to make relations fundamentally based on violence and inequality seem morally upright. When this trick no longer works everything explodes, as it is now. Debt has revealed itself as the greatest weakness of the system, the point where it spirals out of control. But debt also allows endless opportunities for organizing.

This is absolutely right. The trick with debt is that it’s made to appear as a function of personal responsibility. Those who are responsible don’t get into debt they can’t pay back. If you’re in debt now and can’t pay it back, that’s your problem. You shouldn’t have borrowed the money in the first place.

The problem with this appeal to personal responsibility is twofold. First, if it’s an individual problem, they how can the problem be so general? According to this article “There were 145,000 home foreclosures last year -- a 21 percent increase from 2007 and a 108 percent increase from 2006. Another 11,000 families lost their homes in January alone.” The problem isn’t one of personal responsibility. It’s a systemic problem. Something went wrong beyond people’s personal choices. Choices don't exist in a vacuum. Holes are dug, and people are pushed toward them.

That brings us to the second problem: even if this couldn’t have happened without individuals making bad personal choices about their own money, it’s definitely a general, societal problem now when you consider how things have spiraled out of control as a result of it. The point has already long past where we can sanctify debt. What we need now is for companies like Countrywide to be forced by the government to get off of people’s backs and let them keep their homes. And if the government won’t force them to do it, we need to form a debtors’ union and collectively negate our debts.

Graeber sounds lukewarm on this proposal though. See what he says next:

Some speak of a debtors’ strike or debtors’ cartel. Perhaps so, but at the very least we can start with a pledge against evictions. Neighborhood by neighborhood we can pledge to support each other if we are driven from our homes. This power does not solely challenge regimes of debt, it challenges the moral foundation of capitalism.This power creates a new regime.

I mean, I guess. To respond to the idea of government intervention in the debt crisis or worse, to respond to the idea of a debtors’ union with a “perhaps”, in favor of a “moral” challenge to capital seems hopelessly perfectionistic and idealistic to me. While I'm not intimately familiar with Graeber's line, I suspect it comes from this general view that the only institutions that have the moral right to challenge capital are those that reflect the will of the people in a direct, almost mystically immediate way. A lot of leftists are skeptical of a debtors' union because they're skeptical of unions in general. They’re skeptical of the “traditional” organs of working class struggle, the ones that don’t really end up representing the people, after all.

Surely we need both. We need to turn around the moral logic of personal responsibility and constantly point out the ways in which capitalism is a system of slavery and theft, even in the relatively affluent United States. We need to mediate so-called personal problems with general categories and concepts, showing how what appears to be personal in fact exemplifies class antagonisms fundamental to the capitalist mode of production. But we also need to take a practical point of view with regard to these criticisms, and that means utilizing to the greatest degree possible all the institutions and organizing technologies at our disposal, not just the sexy, radically decentered ones. Our orientation should not just be moral or practical. It should be political. That means creating new institutions that adequately express working class power, but it also means seizing power from the hands of our masters, taking over their institutions, and wielding that power against them with impunity.