The largest crisis in U.S. financial history shook the foundations of Wall Street this week. The aftershocks of the earthquake that toppled the 158-year-old Lehman Brothers investment bank, Merrill Lynch and the AIG insurance giant — all within a 24-hour span — shook capitalist markets around the globe.
At one time in capitalist development, financiers “greased the wheels” of industry, turning out real goods, infrastructure and services.
But in the era of deindustrialization, mega-mergers, deregulation and privatization of public institutions, the “industry” that finance capital greased — in its global search for the highest rates of profit — was a house of cards built on subprime loans, speculation and other financial devices. A rickety, greed-based structure that created nothing of use.
This led not only to the biggest financial crisis in U.S. history, but also to the largest global income gap in history with a few at the top enjoying trillions while 95 percent of us struggle.
Today 3 billion people in the world live on less than $2 per day. In the U.S., workers are earning less and have a declining standard of living even though they are more productive than ever. The average U.S. household is $9,000 in debt.
The government is injecting billions to bail out failed financial companies. Don’t the nation’s communities and working families deserve the same so they don’t “fail?”
So what to do?
For starters, Congress should enact an immediate stimulus package that includes extension of unemployment benefits for the duration of unemployment, a moratorium on foreclosures, public investment in needed infrastructure projects and an infusion of federal tax dollars back to hard-hit state and local budgets. The AFL-CIO has proposed such a package.
Two, the federal government must invest in manufacturing, science and technology so we get back to producing “real” goods, infrastructure and services to rebuild a “real and green economy,” while protecting our planet. Investment in our nation’s human capital — creating well-paid jobs, quality public education and universal health care — is the key restoring our economy.
Three, banks and financial capital must be closely regulated — for the benefit of the public.
None of this will happen if the country is saddled with another anti-worker, Wall Street administration like the current one. All that would do is cause a whole lot of McPain for working people.