Mar 5, 2007
On February 27, stock exchanges around the world took a sudden sharp plunge. In just that one day, more than 600 billion dollars were destroyed in the New York Stock Exchange.
Certainly this was a huge loss. Yet it constituted a little more than 3%, or a tiny fraction, of the amount of money in that one stock exchange. This is because Wall Street is awash in money – unimaginable amounts of it. And Wall Street is only the beginning of it. Banks, big financial companies, financiers of every kind have so much money, they don’t know what to do with it. They are constantly on the hunt to make a quick profit through speculation. They rush about buying and selling, trying to beat out their competitors in the next big deal.
That money is used for speculation, and not just in the stock market. As enormous as it is, the stock market constitutes only one of the many forms of speculation. There are enormous speculative markets in bonds, currencies, real estate, oil, precious metals – and, yes, even orange juice! Huge companies in every branch of the economy are bought and sold. Companies are broken up and put back together. And every time this is done, more speculative profits are carved out by the investment companies and financiers.
Where does all this speculative capital come from? It originated from the exploitation of the working class, that is, from the production of real goods and services.
That wealth, created by the working class, is then used against us.
Every time companies are bought and sold, the workers pay for it with layoffs and cutbacks of every kind. A huge speculative fever in real estate created enormous fortunes for real estate titans and financing companies. They destroyed affordable housing, leaving big parts of the population priced out of the housing market.
Fortunes are made off government bonds. Wealthy people do nothing but sit there and collect interest tax free, or trade their government bonds to one another and make even more money. Meanwhile the infrastructure is left to crumble and rot. There is no money to build enough new bridges, roads, schools and hospitals to meet the needs of a growing population. At the same time, city water and sewer systems, schools and hospitals are literally over a century old.
In other words, the workings of the economy are little more than an enormous Las Vegas casino running full tilt night and day. And the financiers are sitting there with chips piled as high as skyscrapers – that is, until they come tumbling down. Sooner or later, this drive to accumulate leads to more serious crashes, that in turn detonate other crises, which the wealthy will also try to make the working class and poor pay for.
The fact that there is a downturn in the real estate market today could very well bring about a bigger banking crisis. In other words, this speculative fever could very well wind up in much wider ruin. A whiff of that fear led to the dramatic drop last week.
What insanity. On the one pole, there is a parasitic capitalist class. At the other pole, there is growing impoverishment and decay. This is a complete dead end for humanity.
Let the working class that produces everything push aside the capitalist class that takes everything. Let the wealth that workers create finally satisfy their needs and the needs of all humanity.