YANIS AND THE COMING TIDE

YANIS VAROUFAKIS IS MY HERO. He is the Elvis Presley, Prince and Michael Jackson of finance, all rolled into one. He was finance director for Greece and he quit when the Greek government cow-towed to the European Union, losing their sovereignty. He is  one of the few that knows what he is talking about, and expresses the world past present future in the clearest of terms. I had to type real fast, and missed a bit. Also, I interjected my own words at times in and effort to make the sentence clearer. Otherwise this is all Janis.

https://www.youtube.com/results?search_query=yanis+varoufakis+is+capitalism+devouring+democracy



We must come to terms with the beast that dominates our lives-

THE FEUDAL SYSTEM-  The monarchy in those days leased out and charged rent, and the peasant could keep the difference after he had paid for the land, the sheep, the workers, what he kept was his profit. Then they borrowed from  the landlord, who lent them the money to pay their rent (with interest)  The lord would send the sheriff out and take his cut. It was a political, economic, ethical, and  religious task. The surplus was sold in  markets, which the lord lent out.

(1)-Production, (2)-distribution and finally, (3)-finance.

Under feudalism we had (1) work first, (2) the workers  produced (3) the harvest, then came (4) distribution, for which they got paid.

In time there was a shifting from feudalism to capitalism. The peasants were evicted from the land and replaced by sheep---commodities, wool, steel, spices, etc. The lord of the land had no incentive to retain peasants planting vegetables when they could replace the with sheep whose wool had value. This began the commodification of labor.

 With the replacement of the peasants it meant that every acre of land had an economic value- that meant you could determine how much you could get per acre of land. Suddenly land became a commodity.

CAPITALISM- The evicted peasants were roaming round looking for jobs. This had never happened before. People were selling their labor time. This was the beginning of capitalism. Suddenly you had merchants who acquired huge power through financialization of commodities- the merchants, the sheep owners. Many traveled to the newly discovered continents and made vast fortunes on merchandise from the "Indies". The lords who rented their land, whose political power and social power had diminished and who considered the  merchants ugly and dirty, but  who to their horror were  were acquiring more  economic power than the Feudal lords themselves.(See the film Il Gattopardo, by Visconti.)

In the 19th century liberalism was at odds with democracy. The whole point was to support the right to track, bargain and exchange. Democracy is the rule of the many- this was not allowed by the monarchists or at first by the capitalists. As the result of an economic crisis there started a leaning toward more democracy. From the electric bulb to the power generating station- and other technology, ending in mega companies.  For this you need a lot of financing. The new order becomes significant.

Now the formula  was (1) first the loan, (2) workers, finance, (3)distribution and (4) production


THE BANKS- It was impossible to finance capitalism just with the lord's money, so you needed banks to conjure up finance from nothing--from thin air. People think that banks operate like vaults--we put our savings in and someone goes to borrow and they get it from our savings. In fact, if you get a loan from the bank the bank will create it out of nothing. This is a  common fiction. A 100,000 loan . The banker types the money and you have 100,000 you can buy stuff that goes to the bank account of the vendor. These digits are then transferred to another account. The bank hopes you will use the money productively, (with interest, of course). Its like a banker who can reach through  time, then pushes his hand into the future gets value that has not been created yet, then brings it back, and, hopefully, you can earn the value to pay them back. The banks thus become mega-rich. This way, when they get into trouble, they banks become influencers of politics. The bank does it over and over until they can not repay the loans that are not performing. There is a panic, we ask for the cash the cash is not there. All the great institutions- welfare, stimulus, food stamps, etc are the result of financial collapses.


At the beginning there was one sphere of power- the monarchy, then it separated to political and economic.-political. Power  was increasingly democratized, through the common belief that it was a legitimate system to give people the idea that they had political control, but in reality all the important decisions are actually made in the economic sphere. After Breton Woods- the globalization of the New Deal- to put the financial genie back into its bottle, to ban bankers from too many bubbles, to mobilizing idle savings of the rich and turn them into productive enterprises, infrastructure, with no fluctuation in interest rates, FDR imposed one rule- BAN THE BANKERS.

Have you noticed that the quality of politicians has dropped? Their capacity to use power, or to inspire has faded. Before it was impossible to separate economic, political military power. There was no economics, because there was no need of it before capitalism came of age. Now politics has receded and given way to the financial sector, which begins to dominate every aspect of our lives.  

What happened after the war was to convert factories from military to civilian production. They produced so much that Americans had no use for so much merchandise (cars, tv sets, washing machines, etc,) which would create a new depression. So  to avoid that the US sold to Europe, but it had no money in the aftermath of the war,  so the US instituted the Marshall Plan..

Globalization means that  capital must nestle everywhere it must enter into relations everywhere.

When the US went from surplus to deficit, in 1970, how could it maintain its global hegemony?. It would lose its superpower status. It doesn't matter whose surpluses are being recycled, as long as we in the US  recycle others people's surpluses. The US has a trade deficit, but globalization would not have happened without the deficit. The US kept other factories going and the increasing trade deficit kept the economy healthy. How was it paid for? The rest of the world was sending 70% of profits to the Wall St seeking higher returns used to purchase US treasury bills (recycling the debt), US growing its deficits the rest of the world growing their surpluses. Unleashing the Wall St bankers resulted in the 2008 crash. The US deficit was keeping its globalization growing- and to pay for the deficit it let Wall St bankers do as they pleased- who will always bet on ways of winning. They built so many pyramids that it combusted in 2008.

The joint sphere of power divided into political and economic- resulting in all power to the economy- socialism for the bankers, and too big to fail. Politicians are so little talented because the political sphere is powerless. President of the US or CEO of Goldman Sacks? There is not  much a president can do, but Goldman Sacks can literally get away with murder.

Is capitalism sustainable with democracy?. No, because it shifts power away from politics and power goes to finance.

"Elections cannot be allowed to change economic policy." This is excellent news to the Chinese because they believe that too. In that case, let's ban elections in debtor countries, because if we have a debtors prison, we  live in iron-clad oligarchies which require us to believe we are living in a democracy.

LEFT AND RIGHT. The left are sectarian.  We hate each other more than we hate anything else.We are constantly searching for "purity" and sloughing those who "betray" our values.  In fact,  capitalism is rather overthrowing itself. 2008 imploded under its own weight.  It never ended, it is mutating. It migrates to different parts of the world.  Negative interest rates are eating into the pension funds. This makes people vote for the right. In  Greece we have a Nazi party because we have a depression.

In China the proportion of GDP goes into investment . In 2008 the Fed started printing money and China boosted its investment ratio  in order to re-balance global capitalism. The US today has 2 1/2 % growth no serious involvement in good quality jobs, resulting in wage stagnation. You cannot say to Trump voters they are idiots and Putin duped them. More than half of the families in US cannot afford the cheapest car. That's why Trump got elected, because the failed to shift the burdens of the crisis of the financial sector to the 1 %. and  solve the problem. We need an international new deal. Globally, progressives all over the world have to collaborate. The bankers are internationalists- they and the fascists love each other. Only the left cannot unify.

Once we stabilize the world,then we can start thinking of post capitalism. For example, in 3D printing artificial intelligence, the technologies of capitalism are creating their own obsolescence. We can continue to produce, but people cannot afford the merchandise.You need social democratic measures before you can get to the radical part. Why have the bankers get paid first and the workers last, instead of the other way around?.Save the banks and expropriate the bankers. Why not?

Why did they vote for trump?. In UK people voted for Brexit to remain in the EU. They said to themselves; "those bastards have treated me as a dirty rag, and so I'm voting to  punish the establishment." 100,000  dollar speeches and then calling me names (Hillary) I wont vote for that.

WHERE DO WE GO FROM HERE? In 1929 we had unions, but those are gone. You don't need  90% taxes- what you need is to change the discourse appealing to not only left but those who don't imagine being on the left. People say if we can manage to hang on to shitty jobs its better than nothing. Why can't we negotiate NAFTA so that Mexico provides a living wage in factories that produce stuff to the US.?  Not tariffs, then you wouldn't need to build a wall.

Obama care is an affront against logic. The idea that the state is subsidizing private companies for public health without any restraint. How about a public health system so we can introduce tax cuts? US health system now is the most expensive in the world. You could save a huge amount of public money, and give it to the poor, and still cut taxes.

The bailout was 9 trillion dollars without anyone realizing it (Geitner and Summers) Now we are paying for it because that allowed Trump to be elected.

Who has their hands on the wheel?. Most work in white collar jobs, and now there are few industrial jobs, in 1930s the labor movement imposed it will using its power. Now there is no labor power- hordes of people begging to work at any wage. It was a political process that led to the New Deal. Keynes introduced reforms to preserve capitalism, also FDR . Maybe we don't need strong trade unions today. Now we need to organize the precariat into a political force. They are falling through the cracks. A person who works 18 hours a day is a lost soul. we need to think about collective action. We have millions exploited by private utilities companies and they have already sold for the next 20 years what you will pay for their service, and it makes your bills go up and up. So we can time through the internet which financial derivatives are packaging their bills in a neighborhood  and time  a strike in such a way as to hit them destroy them and make them fail, so they can be nationalized.
Why not?