YoungDemCA

YoungDemCA's Journal

May 30, 2015

How the actions of the Bush administration paved the way for ISIS

A common phrase these days among critics of the Bush administration is that George W. Bush "created ISIS." While I more or less agree with that statement, let's elaborate on it a bit, and explain the conditions which led to the present humanitarian calamity that is the Islamic State in Iraq and Syria.

It starts with the decision to invade Iraq (which neo-conservatives had been wanting to do ever since the first Bush administration passed on the opportunity in 1991), but first, a little background. Saddam Hussein, being the ruthless despot that he was, had suppressed Al-Qaeda terrorists and similar groups, and, being a member of the Sunni Arab minority in a majority-Shia country (along with the Kurds, who have wanted an independent country of their own for a while now), had filled most positions of power in Iraq with fellow Sunni Arabs. In addition, Saddam cracked down hard on any dissent to his rule, regardless of whether the dissenter was Sunni or Shiite, Arab or Kurd - but generally, he treated the Sunni Arabs better than the Shiites (and especially the Kurds).

Now, the Bush administration had seriously arrogant and hubristic notions of what would happen after they invaded (that, or they didn't really know or care - also a possibility). They thought that they could simply "de-Baathify" Iraq, and create a fledgling new Western- style democracy within the country. However, the result of this was that Shiite leaders got the bulk of the power, representation, and benefits of democracy, while the Sunni Arabs got the short end of the stick. The decisions to disband both the Baath Party and the Iraqi armed forces - both Sunni Arab strongholds - were absolutely reckless, ill-conceived, and ultimately, disastrous.

At the same time, Sunni Islamic militants from other countries saw the invasion of Iraq by the U.S. as a golden opportunity to rally support around opposition to an incredibly unpopular and poorly thought-out American war. Frankly, the second Iraq War was really a gift to Al-Qaeda affiliated jihadists in terms of recruitment and for propaganda purposes. Thousands of foreign fighters from other Middle Eastern countries and from around the world poured into Iraq to fight against the "Coalition of the Willing" and the new, Shiite-dominated Iraqi government. Additionally, Saudi Arabia and Iran began to engage in a proxy war as they each supported factions from the respective dominant sects of Islam within their countries.

Many of the respective Sunni forces - former members of the Baath Party and the armed forces, foreign jihadists, members of the Sunni tribes in central Iraq, and others - eventually joined forces; however, they did so under the banner of an extreme Salafi jihadism that was even more violent and ruthless than Al-Qaeda. Yet, the bigger point is that ISIS has a lot of hardened, experienced fighters in its ranks, access to a lot of money (some of it from Saudi Arabia and other Gulf countries, some of it from ransom payments, some of it from plundering resources in Iraq and Syria), and a formidable social media presence. They've furthermore, capitalized on popular Sunni anger against both the American-led invasion of Iraq, and the governments of both Iraq and Syria. Finally, their appeal has a strong international/transnational element to it, with many ISIS militants coming from Western Europe and the UK, and even the US, Canada, Australia, etc. (Launching a Global War on Terror necessarily implied that Islamic terrorism was a global phenomenon).

Anyway, this is how I see how the original decision to invade Iraq, the local context and conditions that the Bush people ignored or exacerbated, the decision to disband both the Iraqi military and the Baath Party, and the transnational dimension to Salafi jihadism all contributed to the creation of ISIS.

-My $0.02.

May 30, 2015

No, the Democrats Have Not Moved Further Left Than Republicans Have Moved Right

When Barack Obama first appeared on the scene as an underdog challenger to Hillary Clinton, conservatives welcomed him as a refreshing, relatively moderate alternative. Then they decided Obama was actually a left-wing extremist, in comparison to the moderation of the Clintons. As Hillary Clinton prepares to take the helm of the Democratic Party, the Republican task is now to formulate a new line, according to which Obama moved his party to the left, and Hillary Clinton threatens to move it even further left. Peter Wehner, a former Bush administration strategist, makes the case in the New York Times today. His case is not strong.

Wehner asserts, “Mr. Obama is more liberal than Mr. Clinton was on gay rights, religious liberties, abortion rights, drug legalization and climate change.” The part about gay rights is correct. The rest lack any substantiation. On climate change, the Clinton administration attempted to impose a carbon tax in 1993, but failed, and supported the Kyoto Treaty but faced overwhelming opposition in the Senate. Obama, claims Wehner, “has focused far more attention on income inequality than did Mr. Clinton, who stressed opportunity and mobility.” Actually, both Clinton and Obama stressed inequality and mobility alike. President Clinton endlessly promised to make the rich “pay their fair share,” while Obama has stressed opportunity and mobility.

“In foreign policy, Mr. Obama has shown himself to be far more critical of traditional allies and more supine toward our adversaries than Mr. Clinton was.” These are the exact same criticisms conservatives made of Clinton during the Clinton administration. The neoconservative Richard Perle in 1996 lambasted “the nearly chronic tendency of the Administration to abandon any policy that encounters even mild opposition, guarantees that adversaries are not deterred — nor are allies assured.” The centerpiece of the conservative claim that Obama criticizes his allies is Israel, and the actual basis for this is that Israel’s government has abandoned its support for a two-state solution, a fact Clinton himself has likewise acknowledged.

Wehner asserts that “Obama’s inner progressive has been liberated,” citing “his veto of legislation authorizing construction of the Keystone XL pipeline,” but allowing his approval of oil drilling off the Alaska coast as an “exception.” Another, more accurate way to put this would be that Obama approves of some fossil-fuel projects but not others, just as Clinton did. (Clinton infuriated conservatives by vetoing drilling in the Arctic Wildlife National Refuge, the Keystone Pipeline of its day.)

The Democratic Party’s social profile has certainly changed under Obama. The country is more diverse and socially liberal, and the party has changed with it. But the notion that Obama, who staffed his administration with Clinton-era advisers, has fundamentally abandoned Clinton’s ideological approach to the role of government is lacking in any evidentiary support. Obama has enacted more dramatic policy changes than Clinton did, but this is not because he had dramatically different goals, but because he had dramatically more success in enacting them. (This, of course, is another reality Wehner has repeatedly denied.)

http://nymag.com/daily/intelligencer/2015/05/democrats-havent-moved-farther-than-gop.html

May 30, 2015

Today is JFK's birthday

He would have been 98.

RIP to a great Democrat and an inspiration to many.

May 29, 2015

I've been trying to wrap my head around opposition to abortion and women's reproductive rights...

In terms of the historical and sociological context for what drives the anti-choice crowd.

So far, I've been thinking about the relationship between property rights and their historical origins (particularly in the English common law, the Roman law, etc. - along with the Greek slave societies, where women also had the status of being male property - and opposition to abortion.

In doing some basic research on this relationship, I found this:

A woman's gender and marital status were the primary determinants of her legal standing in Indiana and much of America from 1800 to 1850. By custom and law she did not enjoy all of the rights of citizenship. In the legal realm women were decidedly dependent, subservient, and unequal. National and state constitutions included little mention of women. Even though Hoosier women were enumerated in the census which paved the way for statehood and had to share the burden of taxation, they were not allowed to vote or hold office. Rights for which a revolution was fomented were denied women – as they were to slaves, "lunatics," and "idiots."

Further exacerbating the situation, rights normally enjoyed by women were often withdrawn when she married. Indeed, a woman gave up so many civil and property rights upon crossing the threshold that she was said to be entering a state of "civil death." This unhappy circumstance arose partially because American (and Indiana) law was based upon English common law. Predicated on "precedent and fixed principles," common law had dictated a subordinate position for women. Married women generally were not allowed to make contracts, devise wills, take part in other legal transactions, or control any wages they might earn. One of the few legal advantages of marriage for a woman was that her husband was obligated to support her and be responsible for her debts. It is highly doubtful that these latter provisions outweighed the lack of other rights, particularly in the area women faced the most severe restriction, property rights.

https://www.connerprairie.org/Education-Research/Indiana-History-1800-1860/Women-and-the-Law-in-Early-19th-Century

Doing some more research on the doctrine of coverture, I also found this:

A feme sole had the right to own property and make contracts in her own name, while a feme covert was not recognized as having legal rights and obligations distinct from those of her husband in most respects. Instead, through marriage a woman's existence was incorporated into that of her husband, so that she had very few recognized individual rights of her own. As it has been pithily expressed, husband and wife were one person as far as the law was concerned, and that person was the husband. A married woman could not own property, sign legal documents or enter into a contract, obtain an education against her husband's wishes, or keep a salary for herself. If a wife was permitted to work, under the laws of coverture, she was required to relinquish her wages to her husband

http://en.wikipedia.org/wiki/Coverture#Principle_of_coverture

Coverture is a long-standing legal practice that is part of our colonial heritage. Though Spanish and French versions of coverture existed in the new world, United States coverture is based in English law. Coverture held that no female person had a legal identity. At birth, a female baby was covered by her father’s identity, and then, when she married, by her husband’s. The husband and wife became one–and that one was the husband. As a symbol of this subsuming of identity, women took the last names of their husbands. They were “feme coverts,” covered women. Because they did not legally exist, married women could not make contracts or be sued, so they could not own or work in businesses. Married women owned nothing, not even the clothes on their backs. They had no rights to their children, so that if a wife divorced or left a husband, she would not see her children again.

Married women had no rights to their bodies. That meant that not only would a husband have a claim to any wages generated by his wife’s labor or to the fruits of her body (her children), but he also had an absolute right to sexual access. Within marriage, a wife’s consent was implied, so under the law, all sex-related activity, including rape, was legitimate. His total mastery of this fellow human being stopped short, but just short, of death. Of course, a man wasn’t allowed to beat his wife to death, but he could beat her.

https://www.nwhm.org/blog/coverture-the-word-you-probably-don%E2%80%99t-know-but-should/

How much of the opposition to abortion in the United States comes from the cultural, economic, social, political, and legal legacy of coverture (and likewise, similar legal systems around the world)? I strongly suspect that it has something to do with it.

Women as the property of their husbands - that's the kind of historical reality and legacy we are dealing with here.

May 28, 2015

The dark money behind climate change denial (Drexel University 2013)

"CCCM" stands for Counter-Climate Change Movement.

The single largest funders are the combined foundations Donors Trust/Donors Capital Fund. Over the 2003–2010 period, they provided more than $78 million in funding to CCCM organizations. The other major funders are the combined Scaife and Koch Affiliated Foundations, and the Bradley, Howard, Pope, Searle and Templeton foundations, all giving more than $20 million from 2003–2010.

Of special interest in this regard is that Donors Trust and Donors Capital are both “donor directed” foundations. In this type of foundation, individuals or other foundations contribute money to the donor directed foundation, and it then makes grants based on the stated preferences of the original contributor. This process ensures that the intent of the contributors is met while also hiding that contributor’s identity. Because contributions to a donor directed foundation are not required to be made public, their existence provides a way for individuals or corporations to make anonymous contributions. In effect, these two philanthropic foundations form a black box that conceals the identity of contributors to various CCCM organizations.

snip:

This distribution of funding shows that both conservative foundations and the recipient organizations are core actors in the larger conservative movement. The foundations that play a major role in funding the CCCM are all well-known and prominent conservative funders (Stefanic and Delgado 1996). Thus it is clear that the most prominent funding foundations and the organizations receiving this funding are identical to those constituting the larger conservative movement, indicating that the CCCM is a subsidiary movement of the larger conservative movement, as numerous analyses have argued previously (McCright and Dunlap 2000, 2003; Dunlap and McCright 2011; Jacques et al. 2008, and Oreskes and Conway 2010).

http://www.scientificamerican.com/article/dark-money-funds-climate-change-denial-effort/ (Link to the study is in that article).

May 27, 2015

CA: Hillary continues to lead in polls for both the primary and the general election

Hillary Clinton: 53%
Elizabeth Warren: 13%
Joe Biden: 6%
Bernie Sanders: 5%
Jim Webb: 1%
Martin O'Malley: <0.5%
Lincoln Chaffee: <0.5%
Other/Undecided: 22%

Other findings:

The survey also asked likely voters in the Democratic primary for their reactions should Clinton
become the party’s nominee for President next year. In response greater than four in ten Democrats
(46%) say they would be enthusiastic about Clinton as their party's nominee, and most of the rest
(38%) say they would be satisfied. Just 10% say they would be dissatisfied or upset.

snip:

Women, strong liberals and voters in the San Francisco Bay Area are the Democratic voter
constituencies most likely to be enthusiastic about Clinton as their party’s nominee. For example,
52% of Democratic women voters polled said they would be enthusiastic about Clinton as the
nominee, compared to 38% among Democratic men.

Six in ten Democrats who identify themselves as strongly liberal in politics (60%) say they’d be
enthusiastic about Clinton as their party’s nominee, while among all other Democrats 41% say this.

In addition, a larger proportion of Bay Area Democrats (56%) than Democrats in other parts of the
state say they would be enthusiastic were Clinton to become their party’s nominee.

Clinton holds commanding double-digit leads when paired against each of the leading Republicans
in simulated general election trial heats among the overall California electorate. Against Bush, the
former First Lady leads by a 53% to 32% margin. Against Rubio, her lead is 52% to 31%, while
against Walker, she leads 54% to 30%.

http://www.field.com/fieldpollonline/subscribers/Rls2506.pdf

May 23, 2015

This is your brain on Whiteness: The invisible psychology of white American ignorance explained

snip:

The dominant corporate news media have used the Baltimore uprising and other similar events to attack Black America’s character, values, and culture. The argument is clear: The events in Waco were committed by white men who happen to be criminals; the Baltimore uprising was committed by black people who, because of their “race” and “culture,” are inherently criminal.

Racial bias in news reporting has been repeatedly documented by scholars in media studies, critical race theory, political science, and sociology. As anti-racism activist Jane Elliot incisively observed, “People of color can’t even turn on the televisions in their own homes without being exposed to white racism.” The centuries of racism, and resulting stereotypes about the inherent criminality of Black Americans, are central to why the events in Waco and Baltimore have received such divergent news coverage.

snip:

White racial logic demands that whites and blacks engaged in the same behavior are often described using different language. (White people have a “fracas,” while black people “riot”; during Hurricane Katrina white people were “finding food,” while black people were “looting.”)

In the post civil rights era, White racial logic also tries to immunize and protect individual white folks from critical self-reflection about their egos and personal relationships to systems of unjust and unearned advantage by deploying a few familiar rhetorical strategies, such as “Not all white people,” “We need to talk about class not race,” or similarly hollow and intellectual vapid and banal claims about “reverse racism.” Ego, language, and cognition intersect in the belief that Whiteness is inherently benign and innocent.

Whiteness is many things. It is a type of property, privilege, “invisibility,” and “normality.” Whiteness also pays a type of psychological wage to its owners and beneficiaries. While its relative material value may be declining in an age of neoliberalism and globalization, the psychological wage wherein Whiteness is imagined as good and innocent, and those who identify themselves as “white” believe themselves to be inherently just and decent, still remains in force. One of the most important psychological wages of Whiteness remains how white folks can imagine themselves as the preeminent individual, the universal “I” and “We,” while benefitting from the unearned advantages that come with white privilege as a type of group advantage.

Non-whites in the United States, and the West more broadly, do not have the luxury of being individuals. If a “Black” person commits a crime, it is somehow a reflection of the criminality of Black people en masse. Similarly, when a person who happens to be marked as “Arab” or “Muslim” commits an act of political violence, an obligatory conversation on the relationship between “terrorism” and the “Muslim community” ensues.

http://www.salon.com/2015/05/22/this_is_your_brain_on_whiteness_the_invisible_psychology_of_white_american_ignorance_explained/

May 20, 2015

Differences in gender roles and socialization of children start from very, very early age

A child's earliest exposure to what it means to be male or female comes from parents (Lauer & Lauer, 1994; Santrock, 1994; Kaplan, 1991). From the time their children are babies, parents treat sons and daughters differently, dressing infants in gender specific colors, giving gender differentiated toys, and expecting different behavior from boys and girls (Thorne, 1993). One study indicates that parents have differential expectations of sons and daughters as early as 24 hours after birth (Rubin, Provenzano, & Luria, 1974).

Children internalize parental messages regarding gender at an early age, with awareness of adult sex role differences being found in two-year-old children (Weinraub, Clemens, Sachloff, Ethridge, Gracely, & Myers, 1984). One study found that children at two and a half years of age use gender stereotypes in negotiating their world and are likely to generalize gender stereotypes to a variety of activities, objects, and occupations (Fagot, Leinbach, & O'Boyle, 1992; Cowan & Hoffman, 1986). Children even deny the reality of what they are seeing when it doesn't conform to their gender expectations (i.e., a child whose mother is a doctor stating that only men are doctors) (Sheldon, 1990).

Sons have a definite edge as far as parental preference for children is concerned. Most parents prefer male children to female children throughout the world (Steinbacher & Holmes in Basow, 1992, p. 129). Also, people who prefer sons are more likely to use technology for selecting the sex of their child (Steinbacher & Gilroy, 1990). This preference for male children is further emphasized by the finding that parents are more likely to continue having children if they have only girls than if they have only boys (Hoffman, 1977).

http://gozips.uakron.edu/~susan8/parinf.htm

Early gender socialization starts at birth and it is a process of learning cultural roles according to one's sex. Right from the beginning, boys and girls are treated differently by the members of their own environment, and learn the differences between boys and girls, women and men. Parental and societal expectations from boys and girls, their selection of gender-specific toys, and/or giving gender based assignments seem to define a differentiating socialization process that can be termed as "gender socialization". There are numerous examples from varied parts of the world confirming that gender socialization is intertwined with the ethnic, cultural, and religious values of a given society. And gender socialization continues throughout the life cycle.

Gender socialization is the process by which people learn to behave in a certain way, as dictated by societal beliefs, values, attitudes and examples. Gender socialization begins as early as when a woman becomes pregnant and people start making judgments about the value of males over females. These stereotypes are perpetuated by family members, teachers and others by having different expectations for males and females.

Imagine the following scenario: a young pregnant woman is about to have her first child. When asked whether she wishes to have a girl or boy, she replies that it doesn’t matter. But, sitting next to her is an older relative who says “Oh, hopefully it will be a boy.” In small, but meaningful ways such as this, gender socialization starts even before birth.

Children start facing norms that define “masculine” and “feminine” from an early age. Boys are told not to cry, not to fear, not to be forgiving and instead to be assertive, and strong. Girls on the other hand are asked not to be demanding, to be forgiving and accommodating and “ladylike”. These gender roles and expectations have large scale ramifications. In many parts of the world, girls face discrimination in the care they receive in terms of their access to nutritious foods and health care, leading them to believe that they deserve to be treated differently than boys. The degree of gender differences observed varies in all cultures in respect to infant, toddler and young child health, nutrition, care developmental activities, education, hygiene and protection.

http://www.unicef.org/earlychildhood/index_40749.html

I don't have any children of my own, but my sister's kids are at that very interesting age where they're just starting to identify things as "for girls" or "for boys." In a few months, I suspect my nephew won't be caught dead in Cinderella's shoes, especially when he reaches the age of my 6-year-old niece, who is currently going through her pink princess phase and notably moving into the age where "everyone in my class" birthday parties start to become "girls only" birthday parties, starting a cooties and gender-based separation that will most likely remain until middle school, when hormones override cootie-based fears and long-held gender separation rules and boys are once again permitted to join parties (much to my brother-in-law's dismay).

But going through a pink princess period and engaging in gender-specific birthday celebrations and the like might not be entirely helpful, from a developmental standpoint, according to Lise Eliot, the author of Pink Brain, Blue Brain: How Small Differences Grow into Troublesome Gaps – and What We Can Do About It. As Eliot tells Helena de Bertodano of the Times of London, the brains of boys and girls aren't really that different after all; it's the social conditioning they receive that makes them pick up and internalize gender roles. "Everything is filtered through a lens of whether you believe boys and girls are hard-wired. I don't think your average person appreciates that differences in the brain can be learnt."

Eliot's work is reflected in a study recently published in Sex Roles, which surveyed 80 families and "looked at differences in the way play and caregiving were initiated verbally, and how the participants responded - also verbally - to this initiation, for mother-son, mother-daughter, father-son and father-daughter combinations," by placing toddlers in a one-on-one situation with their parents for snack-time interaction and play-time interaction. Researchers found that toddlers of both genders showed similar communication methods during snack time, but picked up on cues given by their parents during play time, as fathers tended to encourage assertive behavior while mothers encouraged cooperation and fairness. According to the authors of the study: "It would appear that children in the same family have different experiences in their play interactions with their mothers and fathers. Such differences may teach children indirect lessons about gender roles and reinforced gender typed patterns of behavior that they then carry into contexts outside of the family."

So how can parents challenge stereotypical notions of gender? Eliot suggests that it isn't as easy as giving a girl a raygun and having a boy play with My Little Pony: "Many parents have tried this, to little effect. Girls turned the trucks into families, boys played catch with the dolls, and both sexes knew there was something fishy going on." She instead suggests that parents consider buying toys such as Legos for girls, which encourage "the kind of visuospatial skill that is linked to higher mathematic achievement," and perhaps getting your son a pet, as it encourages boys to be nurturing and patient.

http://jezebel.com/5561837/girls-are-pink-boys-are-blue-on-toddlers-and-gender-roles

May 20, 2015

Republicans: Medicaid signup numbers proof that costs will be more than projected

More than 12 million people have signed up for Medicaid under the Affordable Care Act since January 2014, and in some states that embraced that piece of the law, enrollment is hundreds of thousands beyond initial projections. Seven states have seen particularly big surges, with their overruns totaling nearly 1.4 million low-income adults.

The federal government is picking up 100 percent of the expansion costs through 2016, and then will gradually cut back to 90 percent. But some conservatives say the costs that will fall on the states are just too big a burden, and they see vindication in the signup numbers, proof that costs will be more than projected as they have warned all along.

snip:

Obamacare originally expanded Medicaid — which traditionally served poor children, pregnant women and the disabled — to all childless low-income adults with incomes up to 138 percent of the federal poverty level (about $16,250 for an individual) across the country. But the Supreme Court made expansion optional in 2012. And 21 states, mostly with GOP governors, have resisted.

“The expansion of Obamacare will cost our state taxpayers $5 billion,” Florida Gov. Rick Scott said in an interview with POLITICO last week, referring to the 10-year cost. “Name the health care program — I think the only one is Medicare Part D — that cost less than what they initially anticipated…Historically, if you look at the numbers, with the growth in Medicare costs, Medicaid costs, it’s always multiples.” A bitter critic of Obamacare, Scott at one point surprisingly backed expansion, but withdrew his support earlier this year. His state legislature is deeply split on Medicaid policy.

Read more: http://www.politico.com/story/2015/05/skyrocketing-medicaid-expansion-obamacare-republican-governors-118011.html#ixzz3adfuIB13

So Republican Governors are basically all but admitting that under their leadership, their states have seen an increase in the number of poor people, no?

May 19, 2015

Financialization: The Highest Stage of Capitalism (Daily Kos diary, 2014)

The current phase of American capitalism's chronic stagnation has entered a phase of what many call "financialization" or the growth in the dominance of the financial sector of the economy. More than just the financial sector and credit being a larger share of overall GDP (much like the share of auto production in the US economy immediately after WII) financial thinking itself comes to overtake the very basis of policy making and the daily calculus of various economic actors. Hence, for example, the former concern with GDP and personal income growth by the Federal Reserve and other policy making bodies is replaced by the concern to stabilize and ensure asset prices, especially as they serve as the collateral needed to sustain consumer spending and hence growth. Economist Thomas Palley explains the new policy dynamic;

"Whereas pre-1980 policy tacitly focused on putting a floor under labor markets to preserve employment and wages, now policy tacitly puts a floor under asset prices. This policy behavior has been clearly visible with the 2007 U.S. subprime mortgage crisis. It is not a case of the Fed intentionally bailing out investors. Rather, the macro economy is now vulnerable to asset price declines so that the Fed is obliged to step in to prevent such declines from inflicting broad macroeconomic damage."

snip:

The housing price bubble may have been linked to finance capital's need for ever greater profits but the profitability of the new derivatives, Mortgage Backed Securities (MBS) was based significantly on subprime borrowers or those whose interest rates were significantly above the norm. One British researcher, Johnna Montgomerie ties the rise of the subprime borrower directly to the creation of a massive group called the working poor under new liberal, free market capitalism and the rise of the heavy financial indebtedness of this class. "The making of the subprime borrower," Montgomerie contends, is directly related to the inequalities created by monopoly finance capitalism and its distinct model of debt based growth. Montgomerie points out that not only did subprime lending increase from 4% of all mortgage lending in the US in the early 1990s and increase to a quarter of all mortgage loans by 2005 at the height of the subprime lending craze, but over this same period, the average household consumer and mortgage debt of US families earning below $20,000/year (the lowest income quintile) tripled from about $5,700 in 1992 to nearly $18,000 in 2007 on the eve of the current crisis. (Montgomerie; 2010; in ed. Konings; 106-109) Thus, the subprime mortgage fiasco is inseparable from the growth of class polarization under neo-liberal, finance capitalism. Montgomerie concludes by linking the long term process of neo-liberal economic restructuring and its connection to the new growth of the working poor with the ongoing financialization trends and debt driven economic growth.

The details of the housing bubble and its bursting is well known. About $7 trillion in stock market wealth and $8 trillion in residential real estate value quickly disappeared due to the crash of 2008. The Financial Crisis Inquiry Report of 2011 noted that one of the most salient facts of the financialization phase of late capitalism was the growth of the financial industry itself not due to the financing of regular economic opportunities but by its own enlargement. It isn't only that financial sector profits grew from 15% of all corporate profits in 1980 to 33% in 2001; its the growth of financial sector assets and borrowing in order to swell the industry itself in order to promote the real growth of an economy on a mountain of debt in order to swell all capitalist profits without middle class income growth. This is well reflected in the growth of financial firms themselves and an increase in the size of the financial sector relative to the size of the non-financial sector.

If we look closely at the nature of the current crisis we can easily see how it unfolded. Daniel Gross, a financial writer for Salon and other online Media sources, points out how the housing bubble was created to save both Wall Street and the US economy in an era of growing over debt including balance of payments deficits with our major trading partners. Gross pointed out that residential real estate was the most responsive to low interest rate incentives. The price of real estate rose so fast in the late 1990s and early 2000s that low interest and down payments made sense to lenders because of the growing value of their collateral. And along with the growth of real estate prices grew home equity credit lines to fuel spending to sustain the economy. Gross points out that between 2001 and late 2004, home equity withdrawls rose from $59.1 billion to $206.7 billion. (Gross; 2009; 28) Thus, the bubble fueled the economy in lieu of growing real middle class income.

snip:

Dramatically increased leveraging, in search of greater profits, led to a crisis of mammoth proportions but not only because of misplaced bets and risky Wall Street speculation. The entire US economy had become a house of cards because big capital, financial, industrial and commercial, believed it was possible to do an end run around healthy middle class real income growth allowing it to be substituted by an increasingly indebted class of working poor who are nearly one third of all US households today. Financialization isn't parasitism; it is the normal outcome of unbridled capitalist development and its tendency toward the concentration and centralization of income, output and wealth. This crisis is the result. As Karl Marx once remarked, "The chief impediment to the expansion of capitalism is...capital itself!

http://www.dailykos.com/story/2014/04/27/1295056/-Financialization-The-Highest-Stage-of-Capitalism

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