Capitalism among the Vultures

I confess that I don't watch Republican debates too much. It is very bad for my acid reflux. But something very funny is happening. Mitt Romney, the front runner of a very backward running pack, is being "criticized" by his rivals as a Vulture Capitalist. Republicans using such language. Now my first thought was that this was like the 1920s gangster Bugs Moran criticizing front running rival Al Capone for violating the Prohibition laws. Then I thought that the GOP was being "brainwashed" by partisans of socialism. But then I began to thin a little more seriously about it First of all, the phrase "vulture capitalism has been around for many years. It no more originated with reactionary Texas governor Rick Perry than the death penalty, of which he and his predecessors have been so fond, originated in Texas.

It is essentially play on the words of "venture capital" and has been used by militant opponents of virtually everything all of the Republican candidates stand for decades. You can find it in Michael Moore's" Capitalism A Love Story" and in the work of brilliant popular political economist Naomi Klein(who also has given us such better terms as "Casino Capitalism" and "Disaster Capitalism." It was even the title of a 2002 novel.


The difference between Romney and his rivals is that he is a bona fide contemporary finance capitalist, not merely a servant and propagandist for the capitalist system, He is someone seeking the Republican presidential nomination not only to get rid of Obama and gratify is own ego but to eliminate the middle man. And he looks and acts the part.


Vultures feed off the dead and a system of deregulated unchecked capitalism creates many corpses. No one would seriously say that vultures represent the Social Darwinist interpretation of "survival of the
fittest"

But others look at it differently, namely the proponents of venture capitalism: meaning "private equity firms" which raise and invest capital stress the achievements of such firms from the 1950s on in funding new businesses, "startup firms," which bolster economic growth, jobs and income., advancing "high tech," making "Silicon valley" possible, etc.

But most students of financial capitalist history (including its supporters) mention that with the deregulation of the Reagan era and the proliferation of such private equity firms, these firms competing with each other for capital (with a government that let them do pretty much what they wanted) moved away from investing in new companies to "investing in" aka leveraging aka hostile takeovers of established firms and inflating the stock market value of such firms.


Along with super profits, these policies caused extensive layoff of employees, pension fund raids against employees of the firms , and of course a mountain of debt which often turned the firms into skeletons whose flesh had been devoured by the venture turned vulture capitalists before they moved to new firms to devour.

All sorts of booms Internet booms were then followed by all sorts of busts, further deregulation, Internets bubbles, NASDAC crashes, etc. and of course the big bust of 2008, wreaking miserty and suffering through the economy

Of course, this all reflected to and for its supporters what that old economist of the right Joseph Schumpeter, once called capitalism work for "creative destruction" paving the way for new developments and breakthroughs out of the debris of shattered industries and workers without jobs.


Unfortunately, like real vulture, vulture capitalists feed off the dead; they don't make existing firms, to use the old Reagan era cliché "lean and mean." And they don't destroy to create but to amass profits in ways that have
stifled development in the U.S. -not only in regards to the purchasing power of workers but also the introduction and development of new technologies to upgrade the infrastructures of production and distribution.


But what about Mitt Romney. He certainly is a vulture capitalist regardless of who is calling him that. The son of a former Michigan governor and CEO of American Motors he started his own venture capitalist firm, Bain Capital in 1984 Lleveraged buyouts followed along with layoffs,(his supporters don't from my readings even seriously claim that he was funding "start up firms) although his supporters do claim that "new jobs were also being created to off-set those lost (I forgot to tell you that these funds have been able to hide all kinds of information about their activities which makes both their assertions and those of their critics had to prove)

Romney "retired" from Bain Capital at the turn of the 21st century more than a decade ago to pursue political and other activities, serving as Governor of Massachusetts between 2003 and 2007. In that position he cut funding for all forms of education massively, advanced a deregulation state program for business, increased fees for drivers licenses, registration, marriage licenses pretty much everything that he could . And he was hailed as a financial statesmen who turned a large budget deficit into a surplus.

By the way, as Romney was carrying out these policies in Massachusetts, he, as part of his "retirement" from Bain Capital, continued to receive millions annually from the profits of a number of the firm's activities,
including leveraged buyouts which continued to cost workers jobs through the country.


Not that his main opponent is that much better. Newt Gingrich since he left Congress has made many millions through "consulting firms" for both the "health care industry" and Freddie Mac, the federal home mortgage company. While his wealth is much smaller than Romney's he is a millionaire many times over whose hands may be at least as dirty as the man he and his associates today call a vulture capitalist. .


But to return to our major point, Casino/Disaster/Parasitic/Vulture capitalism is the capitalism that reactionary public policy in recent decades has produced


If Gingrich could somehow gain the presidency, he would in all likelihood advance the same anti-labor, anti-social welfare policies with which he was so closely identified in the 1990s. If Romney could somehow gain the presidency, he would in all likelihood advance the "austerity" policies with which he was so closely identified with as governor of Massachusetts-raising regressive social security payroll taxes and encouraging state and local governments to raise regressive property taxes and fees while he provided greater subsidies to large corporations and banks.


And these are reasons why neither one of them or any of the Republican candidates offer any solution to the economic crisis. The policies which all of them are associated with have played a central role in bringing about the crisis; and they have viewed the crisis as an opportunity to gain or regain political power for themselves by hovering like vultures over frightened and insecure working people as real as trying to put out a fire with gasoline.

The general solution to the problems of capitalism is to abolish it and replace it with socialism. The specific and immediate solutions to "vulture capitalism" is to advance the reregulation of finance and industry and the public protection of the jobs, pensions and benefits of employees to both drive the vultures away and create a healthy political and social economy which will prevent them from feeding.

 

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  • "Vulture" capitalism may be poetic, but it fails Biology 101. Vultures return minerals from carrion to the ecosystem to be reused by living creatures. A very important role. So-called vulture capitalists don't exploit dead companies, rather they kill or decimate live ones, thriving or not. Better use the term "parasitic capitalists." But then that is redundant.

    Posted by HenryCT, 01/18/2012 9:47pm (6 years ago)

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