Neoliberal Depression of 2008 and beyond

The current global economic cataclysm is not an anomaly. It is the 11th major financial disaster visited on the poor and working class by U.S. capitalism: Panic of 1785–1788, Panic of 1792, Panic of 1819–1822, Panic of 1837–1843, Panic of 1857–1861, Great Depression or Panic of 1873–1878, Panic of 1893–1897, Panic of 1907, Great Depression 1929–1941, Recession of the mid 1970s and now the Neoliberal Depression of 2008-? On average every 21 years U.S. capitalism provides the people with the gift of personal and financial disaster for many and severe hardship for many more.

Until recently the term ‘Great Recession’ has been used by many, including myself, to describe our current plight. Economic recession is generally defined as at least two consecutive quarters of decline in Gross Domestic Product (GDP). By this measure the recession began in December 2007 and ended in June 2009. That brings us to the old story that a recession is when your neighbor loses his job, a depression is when you lose yours. If the recession ended almost two years ago and conditions for the majority of Americans have not improved since then and no one is expecting or predicting substantial improvement for several more years, how can we not use the term depression?

A depression is a severe and prolonged downturn in the economy. Prices may fall, reducing purchasing power. There tends to be high unemployment, lower productivity, shrinking wages, and general economic pessimism.

  • The New York Times reported in Nov 2010 that home prices had fallen 28.6 percent nationally since 2006. [1]
  • reported in Nov 2009 that 23 percent of home mortgages were underwater (homeowners owed more on their home than it worth). The Feb 2011 figure is now 27 percent of U.S. home mortgages underwater [2]
  • European Union Times reported real unemployment in the U.S. in Feb 2011 at 22.1 percent (compiled by economist John Williams “Shadow Government Statistics” includes long term unemployed and part timers who seek full time work) [3]

The reason that the recession, by definition, ended and the depression continues is that financial institutions and banks responsible for the economic collapse were given $9 trillion in secret emergency Federal Reserve loans [4] in addition to the $700 billion bailout voted by Congress to recover and further prosper. Meanwhile, the American people have been left to fend for themselves.

Economists who support U.S. capitalism will give you an unintelligible definition for neoliberal globalization. I have a simple one: free trade, free markets, no regulations and tax cuts for the wealthy. These policies, originally championed by Ronald Reagan in the U.S. and Margaret Thatcher in Britain, have led us to our present situation.

If there was a political debate over these policies, it might be possible to change them. But there is no debate of substance between the Democratic and Republican Parties on these matters. The Democratic Party, with a base of voters opposed to many neoliberal absolutes, must make a show of opposing these policies. That’s all it is though, a pretense. When push comes to shove the Democrats in the White House and Congress vote to support neoliberal policies, while the Republicans in the White House and Congress make no pretense of not eagerly supporting all of the above.

Obama, was elected on the promise of change. Yet, he failed to honor campaign promises to renegotiate NAFTA (North American Free Trade Agreement) and other free trade agreements. He is a strong supporter of our free market system that requires infinite growth to continue. Infinite growth on a finite planet is an environmentally unsustainable concept. While giving lip service to regulation, his Financial Reform Law is basically a toothless vehicle that incredibly has not a single provision to regulate the financial derivative market that was largely responsible for the present depression. Again, he was a great champion of letting the Bush tax cuts expire, until capitulating under pressure and enthusiastically signing the bill to continue them.

It’s fair to criticize Obama for supporting neoliberal policies, because he consistently does. But it must be done in the context that almost all members of our two corporate political parties support neoliberal policies. The two notable exceptions are Representative Dennis Kucinich (D-Ohio) and Senator Bernie Sanders (I-Vermont) who caucuses with the Democratic Party. That is two votes out of 535 in Congress that can be counted on to steadfastly oppose the transnational corporate dominance of neoliberalism. This demonstrates the futility of attempting to reform neoliberalism from within our corrupt money-driven, two-party monopoly political system.

Neoliberalism is corporate control of politics, regulations, trade policy, environmental policy, tax policy etc: in short corporate control of society. The whole concept of neoliberalism is that it is a world system and the huge transnational corporations will not be satisfied until it has penetrated every corner of the globe. That’s why Castro in Cuba, Chavez in Venezuela and Ahmadinejad in Iran are regularly vilified in the Western press. Because they fail to march to the beat of the neoliberal drum and support social programs for their people instead of bottom line profits for transnational corporations.

Traditional colonialism involved the dominant state setting up colonies in the satellite states; i.e. British colonies in Indian, China and across the globe. The neoliberal model calls for codifying debt in the developing world to transnational financial institutions in return for allowing the satellite states to participate in international trade. It calls for their complete subservience to the World Bank, World Trade Organization and International Monetary Fund. It places the huge transnational corporations above the nation states in the pecking order and leaves the people completely defenseless against their oligarchic power and wealth.

The neoliberal model allows transnational wealth to buy up the developing world’s subsistence farmland, displace the peasants to enclave manufacturing zones, while replanting the fields with cash crops for export. The displaced peasants are then put to work in sweatshop conditions, at near slave labor wages, producing goods that just a few years ago resulted in living wage jobs in Western countries. The goods are then exported duty free to the developed world where the working class workers go further and further in debt buying them with ever more minute incomes. While this misery continues for the vast majority of society, the wealthy financial class laughs all the way to the bank. This is the New World Order of Neoliberal Corporate Dominance!

The U.S. monopoly two-party political system is so beholden to money that reform within the system is an impossibility. The American people know that something is drastically wrong, but after a lifetime of propaganda and disinformation from the wealthy elite capitalist class and its corporate media, many are woefully in the dark about the nature of the problem.

What can we do? Boycott corporate political parties and their elections, tune out corporate media, tune in alternative media that focuses on social and economic justice, form and build affinity groups with others of like mind and work to educate your neighbors. Some may to cling to the belief that the system can be reformed through voting. As one who had voted in every election until the 2010 midterm, it would be hypocritical of me to ask that everyone boycott elections just because that is where my reasoning has led me. If you feel that you must continue to vote for the lesser evil, please do so. But also support and be supported by your like-minded friends. Recruit others to your group and stay informed.

1. “Home Prices Falling at a Faster Rate, New Report Shows,” New York Times

2. “30 percent of mortgages underwater“

3. “Real U.S. unemployment rate may be 22.1 percent for February,”

4. “Federal Reserve made $9 trillion in emergency overnight loans“

Nick Egnatz is a Vietnam veteran. He has been actively protesting our government’s crimes of empire in both person and print for some years now and was named “Citizen of the Year” for Northwest Indiana in 2006 for his peace activism by the National Association of Social Workers. Contact Nick at

16 Responses to Neoliberal Depression of 2008 and beyond

  1. Pingback: The cyclical nature of a truly elite system called capitalism, or how to make money while others pay. The imperial project must always win |

  2. This is cool! I seem to be the first one to reply here? Or maybe the replies don’t get displayed on the page? Cool anyway!

  3. Yay! My reply got put on the page! Hey there Nick! I like ya piece man!

  4. This website is paradise for me, i love all these informations, thanks for your work buddy. Waiting for more posts

  5. Thanks a milion for your personal concern as well as initiatives! These things in your web site is actually wonderful. Besides We dramatically value your own creative ideas. In my opinion they are very important factors. Anyways many thanks. Wonderful read.

  6. I suggest that your comments are interesting and very much accurate in many respects, but you offer no solution either. Not voting is no solution.
    I tell you that the condition of this country is the citizens fault. We are informed or not informed and we vote or we don’t vote. Unfortunately we have many uninformed who vote. We must remember the government bodies consisting of local, municipal, county, state and federal are our employees. We pay for them and everything which they (we allow) create. We are the employer, so lets be the employer and change what we have given ourselves.
    No only do we need to keep taking out career politicians and place those who believe in the foundations of the country… ie: constitution
    we must also change how the govt operates. Change every aspect of the “politics”, which leads to the money you refer too. I couldn’t agree more, representation of the citizen stops where the money starts. Lobbiests, growth of govt, including all departments, our representatives salaries, benefits, pensions, their staff, all their offices in their home states and DC….. it all has to be reduced….. by our actions through continual electing of like minded people as you state.
    It is never appropriate to write of neoliberalism or of any topic which is part of this countries decline without solutions. I will tell you this as well, we would all be better off if we completely cut back Federal Govt to the founders original intention, Keep “americans” safe, protect “americans” if threatened. The emphasis is Americans! I don’t say ignore the world, but as you already know we the citizens-Americans are the most generous people in the world helping others. Not our govt, but we the people.

    You and I and every citizen has to take govt back to where it is manageable, which I spoke above, we are successful if we make sure our towns, cities, (municipalities), counties, and States have the citizens as their employer and caretakers. The citizens must elect and govern and manage those elected. Keep the Federal Govt what it was intended to do, support the citizen, not control us.

    Thanks for writing your piece. I really did enjoy.

  7. Hi Fred,
    Not voting and publicly proclaiming why is the only solution for me. To vote is to participate in a corrupt system and give it legitimacy by participating. If you vote for a great third party candidate like Ralph Nader who has zero chance of either being covered by the corporate media or winning, what do you accomplish? He can’t win so nothing changes. He won’t be heard so the vast majority of citizens know next to nothing about his ideas. But you give your approval to our system which is completely undemocratic, because you are allowed to vote for a third party candidate who supports your viewpoint.

    By not voting and publicly stating that I will no longer participate in an undemocratic system that is morally and legally the antithesis of everything I believe in, at least I can be at peace with my conscience. Also, I am working for a solution by saying that the present system cannot be reformed and we need a new system.

    I would suggest you do a little research on our founding fathers. Our revolution was just a successful changing of the elite rule from British to homegrown. It was still elite rule and nothing changed for the working class except the institution of slavery was given an extended lifespan.

  8. Nick,
    I will reiterate it is the citizen who must rise up. You stated that you have hope by not voting eventually you will be in the majority and a new system will emerge? What do believe will evolve? I believe it is because the citizen has been voting yet uninvolved is why we are where we are today.

    The citizens must continually be engaged to effect the type of public servants we have. Citizens can and will bring either a willing change or a majority civil uprising. One or the other will occur.

    Don’t take a narrow view of our nations founding. To suggest our foundation including the declaration of Independence, constitution, Bill of Rights and even your heritage was about eliteism and slavery is “simple thought”. You mock Washington, Jackson, Franklin, Adams, Jefferson, Hancock, Wythe, Whipple, Henry, Harrison, Hamilton, Livingston, Paine, Hopkins, etc….. You have the right to withhold your vote and still have a voice, though unrepresented. At least expand your thought enough to thank their “simple mindedness” for your “rights”.
    Like you I can’t stand where we are in this country and the following may appear verbose, but I believe each is critical pathways to restoration;

    “In framing a government which is to be administered by men over men, the great difficulty lies in this; You must first enable the government to control the governed, and oblige it to control itself”
    Alexander Hamilton

    “I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious”
    Thomas Jefferson

    “No government is respectable which is not just. Without unspotted purity of public faith, without sacred public principle, fidelity, and honor, no machinery of laws can give dignity to political society”
    Daniel Webster

    “Hold on my friends, to the Constitution and to the Republic for which it stands. Miracles do not cluster and what has happened once in 6000 years, may not happen again. Hold on to the Constituion, for if the American Constitution should fail, there will be anarachy throughout the world”
    Daniel Webster

    “Only virtuous people are capable of freedom. As nations become corrupt and vicious, they have more need of masters”
    Benjamin Franklin

    And finally regarding the importance of each citizen doing their part;

    “WE HAVE STAKED THE FUTURE OF ALL OF OUR POLITICAL INSTITUTIONS upon the capacity of mankind for self-government, upon the capacity of each and all of us to govern ourselves, to control ourselves, to sustain ourselves according to the ten commandments of God”
    James Madison, chief architect of the Constitution

    Back in their time Nick, weapons would be the great equalizer as Thomas Jefferson said; “No FREE man shall ever be de-barred the use of arms. The strongest reason for the people to retain their right to keep and bear arms is as a last resort to protect themselves against tyranny in government”. Today we have weapons as they did, but as our advancement was foretold Benjamin Franklin stated we needed to be diligent through ” A Bible and a newspaper in every house, a good school in every district- ALL studied and appreciated as they merit- are the principle support of virtue, morality, and civil liberty” or John Adams ….” it is religion and morality alone which can establish the principles upon which freedom can securely stand. THE ONLY FOUNDATION of a free constitution is PURE VIRTUE”

    It is time for American citizens to clean their house. If we are to allow ourselves to be governed, we must insist on virtue, if it is not received, we as their economic sustainer and employer will give them their career back and bring in others until we have “public servants”.

  9. Hi Fred,
    Here is a more developed explanation of “Elections matter, or do they?” written 2 years ago.
    Is our system democratic? Do we live in a representative democracy? It takes millions of dollars to run for the House or Senate. It is impossible to compete at this level without this money. It is impossible to get corporate funding or support from one of our corporate political parties if one does not support a continuation of U.S. empire and U.S. capitalism. Then there is the issue of our corporate media refusing to cover anyone who challenges the system.

    This system can’t be changed by voting for someone who supports the system and if you don’t support the system you are not allowed to participate.

    That said I don’t advocate being an ostrich with one’s head in the sand. Get out and protest U.S. empire and capitalism. Write letters to the editor and articles online doing the same. Stand outside the polls and protest elections for tweedledum and tweedledee while the real unemployment rate remains at 22% and the wealthiest Americans pay taxes at a rate less than the working class.

    Whether or not this brings change, I can’t guarantee. It will be good for your mental health, that I do guarantee. Voting and participating in the continuation of the system that has been historically responsible for the genocide of the First Americans, numerous wars of aggression, slavery, segregation, military coups against democratically elected foreign governments and the war against the poor and working class at home will only bring about more of the same.

    The Constitution and Capitalism
    The U.S. Constitution was written to restore the British commercial and financial system under elite home rule. The delegates to the Constitutional Convention were men of means and their overriding goal was protection of their private property. The Bill of Rights was strictly an afterthought, grudgingly given to the more democratically inclined.

    The sweeping language “We the people…” did not square with the reality of 55, not elected but appointed, Convention delegates or the ratification process in which the vast majority of people (native Americans, African Americans, women and indeed many white males) had no say in the proceedings.

    U.S. capitalism and plutocracy (rule of the wealthy) is the result. The country founded on the statement that “all men are created equal” is now the most unequal industrial democracy on earth (Organization for Economic Cooperation and Development).

    The logic of capitalism is that aiding and abetting the accumulation of more and more wealth (capital) by the wealthy improves society. 22% real unemployment (,, concurrent with record corporate profits is the sad reality.

    The Great Recession of 2008 and beyond is not an anomaly. It is but the 11th major financial disaster visited on the poor and working class brought about by U.S. capitalism; Panic of 1785-1788, Panic of 1792, Panic of 1819-1822, Panic of 1837-1843, Panic of 1857-1861, Panic of 1873-1878, Panic of 1893-1897, Panic of 1907, Great Depression 1929-1941 and the Recession of the mid 1970s.

    “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”

    Championed by the U.S. and adopted in 1948 by the U.N. General Assembly, the Universal Declaration of Human Rights (Article 25 above) was an effort to lift Third World peoples out of poverty. As U.S. Neoliberal Capitalism (free trade, free markets, no regulations, tax cuts for the rich) reaches its zenith in the U.S., our own citizens now join those in the developing world as desperately lacking in all these basic rights.

    The time has come to reinvent our country, making the commitment to leave no one behind, placing the needs of our people above those of our present corporate masters. Our entire history is one of support for capitalism and the private property of the wealthy at the expense of the poor and working class. With both monopoly political parties controlled by massive corporate funding, with a citizenry kept uninformed by corporate controlled media and government propaganda, change is impossible. A new structure is needed in which informed citizens participate to guarantee social and economic justice for all our people.

    Nick Egnatz

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  12. Nick,
    We will need to agree to disagree I guess. Many of your thoughts above are good, though your desired solutions are unrealistic in my opinion. I will be brief.

    You are looking for pure human equality. You want emotional, mental, social, spiritual and economic equality. You desire world change to achieve a United States change, hence the change you want where you have been planted. To achieve unity for all, to mention a few, you need to agree, embrace and openly support Capitalism, Socialism, Marxism, Communism, Imperialism etc… as well as every man made religious denomination in the world, (all of them are) such as Catholicism, protestant, mormanism, Jehovah Witnesses, judaism, toroastriarism, buddism, shinto, confucianism, jainism, taoism, Hinduism, Islam, and the absence of beliefs which is atheism, and throw in agnosticism, eliminate differences in world wide free trade, equality in world trade, and redistribution of every kind.

    Countries and governments, religions, values and beliefs are unique world wide for one reason. Not one agrees with the next.
    To believe anyone in any country can accomplish this for all is being “simple” to put it kindly, and there is no denying it really is what you are wanting based on your desires for change.

    You are a very learned man with great thoughts, but your desired reality can and never will be expressed globally. I do believe that, though I am not the author of the thought/belief.

    I must say one more thing, as dissatisfied as you are with capitalism and the US, given what you espouse, you would probably at the very least find more contentment in scientology and be able to work through some of the hard truths which exist.

    I will keep reading your writings and look for some serious solutions you may introduce for debate. Thanks for the blog Nick.


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