To whom...,
I have been answered but not challenged on several fronts. The first front fell when the esteemed Doug Henwood made my argument about stock dividends for me, pointing out that the trend is solidly away from dividends as a source of gains in equities. How stocks were in 1922, 1872, or even 1972 seems not to be terribly relevant to me. Once again I think a net-present-value calculation on the profitability of the major averages over 10 to 20 years might be a better figure to work with than dividends which don't reflect profitability equally across industries.
Following the theme of antique financial practices, Dennis Redmond trots out the vast and politically motivated loan portfolios of the big European and Japanese institutions pointing out, again at my convenience, that they are financial dinosaurs. The reason that a bank like Chase is doing so well and suffered fewer losses than competitors in the last dust-up (despite a larger asset base in most cases) is that they are solidly at or near the front of the banking trend away from enormous loan portfolios and towards underwriting and servicing. This trend produces enormous fee income, doesn't require the bank to increase reserves and allow the bank to spread risk. Instead of loaning the money directly, modern banks use their size to get the business and then move that debt off their balance sheets and onto the market. The very fact that Japanese banks own huge portfolios of mortgages, for example, shows that they are financially backwards. Mortgages in this country are securitized so fast banks have very little time to be exposed to risk. Clearly all banks, especially the European banks, are following the trend towards being underwriters and syndicators. After all, one of the principal promises of a common currency in that it will open up the market for syndication and securitzation of debt across national boundaries. It should be clear to anyone who reads a newspaper that the Europeans (and now even the Japanese as their bourse has sunk below the British, falling from #2 to #3, and their bad bank debt has reached monumental proportions) are trying to learn the American-style securities game as fast as they possibly can.
The point, comrades, is not to celebrate our enemy's strength but to assess it. It seems clear that the dollar-based financial hegemony that sits astride the globe is not likely to simply go "poof" any time soon. That is, it is unlikely unless some more powerful and sophisticated financial (yes, financial) strategies are brought to bear. Neither talk of Bretton Woods, Soviet Banking, or frolicking in topless joints with Japanese finance ministers seems likely to produce such a strategy. Marxists have to consider the strengths of the present order rather than naysaying them. For example, consider securitization. This, at a macro level, looks like the spreading of credit risk, by the bourgeoisie, *among* the bourgeoisie. Why the sudden civic-mindedness? Or is it evidence of what Marxists have observed, that sharing costs across the largest part of society possible makes the economy stronger. So then what like strategy can be employed by Marxists?
Maybe it's too radical for Marxists, but consider an Anarcho-Syndicalist approach. Some unit of society, say, a county, with the power to issue a bond, does so in order to finance, perhaps, a factory that is then owned by the workers (with some type of participation by the larger society). On the one hand the benefit goes to a few and the risk to a larger group, as the citizens of the county are on the hook for the debt to bondholders. This is very much along the capitalist line. But then some risk does also pass to the bondholder. However, if the county could act more like a securitizer or underwriter than a straight bond-issuer, more risk would pass to the holders of the bonds and less would be assumed by the citizens.
In that way a body that would typically use its tax-collecting ability to guarantee a bond, uses that ability to underwrite a bond, providing a more direct link between the workers who need a new factory and the bondholder.
Of course the bondholder is the bourgeois (at least for the moment), but if we consider that the power of the bourgeois comes from his grip on the flow of credit-money, then a large, competitive source of credit-money undermines the power of the bourgeois to extract profit for the use of his treasure. It may be that one way to undermine the current regime of gonifs is to play the game better and bigger than they do or can and show them up for the small-time chiselers that they are.
peace