[펌] Wall Street is Really Predicated on Greed

월러스틴 옹의 글입니다. 미국이 현재 모기지 위기를 인플레이션으로 풀려고 한다면, 결국 달러화 가치 하락을 눈여겨 봐야 할듯 합니다. 유동성을 증가시켜서 신용위기를 헤쳐나가려 한다면 달러화의 가치가 지금보다도 하락폭이 커질 듯 합니다.

It is not I who is saying that Wall Street is really predicated ongreed, but Stephen Raphael. And who is Stephen Raphael? He is a formermember of the Board of Bear Stearns, theWall Street bank that collapsed last month. And where did Raphael saythis? In an interview with the Wall Street Journal, which is more orless the house journal of Wall Street.And what was Raphael's point? It was to explain (or was it to excuse?)the collapse of the firm. "This could happen to any firm," he said.

Yes, indeed it could. And it did. Meanwhile, while this washappening, the chairman of the firm, Jimmy Caynes, was nonchalantlyplaying bridge in a tournament. Not too smart fora greedy banker. As a result, he lost most of his personal fortune, andanother greedy firm, JPMorgan Chase, came in like a vulture and made akilling. Oh, incidentally, some 14,000employees of Bear Stearns are, or will soon be, out of a job.

Is then capitalism nothing but greed? No, there are other things toit, but greed plays a very big role. And greed, by definition, worksfor some at the expense of others. So, somefirms are going bankrupt these days - on Wall Street, and elsewhere inthe world - and others are not. The United States as a country is goingbankrupt, and others are not. TheUnited States doesn't call it that, but that is the truth of it.

Is it always like this? No, not always. Just half the time. Let usreview how Wall Street and the United States got into this particulardisastrous corner. It all started out well - forWall Street and for the United States in 1945. The war was over. Thewar was won. And the United States was the only industrial power whosefactories were intact, untouched bywartime damage. There were destroyed cities elsewhere, and actualhunger in Europe and Asia.

The United States was set to do well, and it did do well, very well.It could outproduce the world, and get the rewards. It made a deal withthe Soviet Union - we call it rhetoricallyYalta - so that there would be no nuclear wars that could really damagethe United States. And, at home, the big manufacturers made a deal withthe big unions so that there wouldbe no destructive strikes to interfere with the profitable production.Rosy times loomed, and the standard of living went up dramatically.Actually, the years after the war proved tobe fairly rosy times for most of the world. It was the moment of thegreatest expansion of production, of profit, of population, and yes ofgeneral welfare in the history of thecapitalist world-economy. The French called it the "thirty gloriousyears."

Must all good things come to an end? Well, cyclically, in the fivehundred years of the modern world-system, I fear this has always beentrue. When everyone begins to cash in oneconomic expansion, the rate of profit has to go down. Profit fromproduction depends on relative monopolization of the leadingindustries. But if too many countries have steelfactories or auto factories (the leading industries of the time), thereis too much competition. And, despite all the nonsensical slogans,competition is not good for capitalists. Itreduces the profits.

And when profits get hit too hard, the world-system enters into oneof its periodic periods of stagnation. This happened circa 1970. And,in case you hadn't noticed, things have notbeen rosy since then, despite once again all the nonsensical slogans.What happens in a period of worldwide economic stagnation? Thefactories begin to move out of the erstwhilelocales (like the United States, but also Germany, France, GreatBritain, and Japan) to other countries (like South Korea, India,Brazil, and Taiwan) in search of lower costs ofproduction. It seems good for the new places of steel and autoproduction, but it means layoffs in the old centers of production.

But runaway factories are not the whole story. What do bigcapitalists do, if they want to make money, in times of lower profitsfrom production? They start to shift their moneyfrom productive enterprises to financial enterprises. That is to say,they begin to speculate. And, in a time of speculation, greed knows nolimits. So we have junk bonds andtakeovers and subprime mortgages and hedge funds and all those curiousthings with curious names. It seems that even Robert Rubin, one of thereally big people in the financialworld, admitted recently that he doesn't know what a "liquidity put" is.

The underlying story - from 1970 on - has been that of debt, greaterand greater debt. Corporations borrow, individuals borrow, statesborrow. They all live above their real incomes.And, if you're in a position to borrow (it's called credit), you canlive high on the hog, as they say. But debts have a small downside. Atsome point, you're expected to repay debts. Ifyou don't, there is a "debt crisis" or a "bankruptcy" or, if you're acountry with a currency, a dramatic decline in the exchange rate.

This is what we call a bubble. And if you blow up a balloon longenough, no matter how good it feels, at some point the balloon bursts.It is bursting now. And everyone isfrightened, as well they might be. When the bubble really bursts, it isreally painful. The thing is, it is usually more painful for some thanfor others, even if it is painful for everyone.

At the moment, it might turn out to be most painful for the UnitedStates - as a country, and for its capitalists, and above all for itsordinary citizens. It seems the United States hasbeen spending not billions of dollars but trillions of dollars on somewars in the Middle East it has been losing. And it seems that even thewealthiest country in the world doesn'thave in its coffers trillions of dollars. So it has borrowed them. Andit seems that its credit in 2008 is not as good as it was in 1945. Itseems that the creditors are today reluctant tothrow good money after bad. It seems that the United States might begoing bankrupt, like Bear Stearns.

Will the United States be bought out by China or by Qatar or byNorway, or by a combination of all of them at $2 or even $10 a share?What will happen to those very expensivetoys that the United States keeps buying, like military bases in ahundred countries, and those airplanes and ships and superduper gunsthe United States constantly orders to replaceyesterday's toys? Who will feed the people on the breadlines?

Come back next decade, and let me know.

by Immanuel Wallerstein