The Nature of the Beast

While the above analyses and analogies are both apt and colorful, they are also flawed as they fail to address the actual disease which is what is truly terrifying the bankers (whether they know it or not), that being the self-devouring nature of unfettered capitalism.

David Ignatieff in the Washington Post: "What scares the central bankers now is the evaporation of trust from the system. Banks don't believe each other's numbers; since nobody knows the real value of these mortgage-backed securities everyone is holding, they assume the worst. They start hoarding cash as a buffer against their own losses and because they're nervous about lending to anyone else."

One of the great myths bandied about right and left is that the last 30 years have seen steady growth in American productivity. But as economist, Henry Liu points out, the Clinton economy was a mirage: "there was no productivity boom in the US in the last two decades of the 20th century; there was an import boom that came with productivity fallouts. What’s more, this boom was driven not by the spectacular growth of the American economy; it was driven by debt borrowed from the low-wage countries producing this wealth. The acceleration of productivity was accomplished by someone else doing the producing without getting proper credit for it. It was called a “bubble” for a reason.

Marx understood this basic flaw in capitalism over 150 years ago. The capitalists profit not by selling their product at a price above the cost of materials plus labor, but by paying their workers less than the value of their labor. So the banker is not the only parasite, the investor,(which include our cherished 401k's and pension funds) is feasting on the 'body' as well. Clearly in such a scenario the diseased, diminishing body (the American worker) can only be saved by cleansing and recapturing its lost blood (progressive taxation) and shrinking the parasites. So while Clinton's tax increase did not grow the economy, it provided the vital infusion it required to survive... until the bloodsuckers recouped and grew stronger.

The worker can never be burdened with sufficient debt to sustain endless profit. It's not that the scorpion is evil or the parasite is stupid. It's just the nature of the beast.