George Schmidt, who has lived under mayoral control of the school system for 13 years, would be classified as the alternate Chicago School. Can it be that George and Miltie's boys and girls have some common ground of agreement on opposing this bailout? In this post to ICE mail George treads on this ground.
Note that when George says, "The white collar workers who produced these commodities may have had "perfect" SAT scores and MBAs from the "best" Ivy League schools" he is also describing the very same types that Joel Klein has surrounded himself with.
9/26/08
Friends from ICE:
Some of us have been talking about this for a couple of weeks as the latest Wall Street, "bi-partisan", and Bush scam unfolded. For the first time in a long time, I find myself re-reading the first volume of Capital while agreeing with the most conservative Republicans. The market has judged these commodities, and there is no reason why we should not let the market continue to take its course.
Basically, the "products" that Lehman Brothers, Goldman, Merrill and Genworth Financial (watch that one next, shipmates) and the others were selling were no different (in the classical capitalist sense) from any other commodity produced for a competitive market. Just because they were given fancy named like "Collateralized Debt Obligations" (CDOs) or "Default Swaps" and had to wait to be birthed by Capital until the age of computers doesn't make them any different from their classical ancestors in the history of markets, bubbles, and panics.
The fact that the products were produced using computers by overpaid whiz kids (and their elders, right up to Henry Paulson) doesn't change their basic reality. The white collar workers who produced these commodities may have had "perfect" SAT scores and MBAs from the "best" Ivy League schools, but they were still producing a product to sell at a profit in the "marketplace" they've been worshipping since the first day they read "Atlas Shrugged" in one of those right wing essay contests every high school was forced by poverty to sponsor.
The financial products, as commodities, were and are no different from Hoola Hoops, SUVs, and Rely tampons (which also proved "toxic" after years of marketing hype).
This latest (bi-partisan) scam, from an Adam Smith point of view, is that they think they can unload a worthless inventory of commodities they have overproduced (in typical fashion, going all the way back to the Tulip Bubble at the very onset of Capital) on the taxpayers.
It may help some people to see what's going on by viewing all these arcanely named thingamajigs as simply the latest version of the Hoola Hoop. There is a market. The commodity is overproduced by those trying to cash in on the market. The price of the commodity crashes, and someone is left with huge inventories.
Why should we be buying this generation of Hoola Hoops with our tax dollars when we were smart enough to avoid buying them when they were for sale in the open market?
George N. Schmidt
Editor, Substance
www.substancenews.net
2 comments:
There is a world of difference between speculative commodities and commodities that are produced with human labor and raw materials, hoola hoops included. The trouble is that now the speculative debt has balloned out of control, like a red tide, and is choking off the oxygen (credit)which allows the the debt owed on commodities of real value, such as SUVs, houses, etc. to continue to function for future production cycles. If we separate out the speculative debt from the other debt, hanging out the former to dry up, we can use the other debt to keep the sound banks going to fund the real economy, repairing our decrepit infrastructure, for example. That could be done through a government-supervised reorganization of the banking/financial system. Then, in a few years, we can gyrate our hoola hoops, enjoy our tulip garden, and still drive to work in our hybrid plug-in SUV, too. If we take all the shit we've heard about the bailout and recycle it into bio-gas, we'll be able to run that hybrid at least 20 miles a day beyond its electric range for some time to come.
9/27/08
Agreed.
The classical distinction was between "Use Value" and other.
We need to re-read the classical economists, from John Calvin (and Adam Smith) to Karl Marx (and Joseph Shumpeter). Trouble is, we'll all be working so hard we'll never again have the time.
One of the funny things about all this is that "Deregulation" has always been known as blasphemy in religious circles. The first major set of regulations (in the Judao-Christian tradition) submitted to authority figures came down from a mountain in the hands of Moses. Called the Ten Commandments. They were found necessary after an orgy of non-regulation and de-regulation, according to some books that George W. Bush and his supporters are supposed to have read avidly.
George N. Schmidt
Editor, Substance
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