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Like the earthquakes and tsunamis that wreak havoc on the people who
live along the faults and plate boundaries of the earth’s crust, the
pressure from below is inevitably manifested on the surface. It doesn’t
unfold gradually either but in an explosive way. Leon Trotsky explained that the nice cosy relationships of the trade
union leaders, even with the bourgeois state tend to breakdown on the
basis of the pressure from below. In the current climate in Britain the
relations between the trade union leaders and the Labour government are
clearly under strain.

In the early hours of this morning
(08.10.08), the government and the financial authorities have finally agreed an
ambitious plan to save the banks. They present the £50bn bail-out as decisive
action to stop the rot. In fact their hands were forced, and there’s no sign that
it will stem the panic on UK stock markets in any case.

Last Tuesday shares in two of our biggest
banks, HBOS and RBS, plummeted by 40%. Let Nils Pratley (Guardian 08.10.08)
chronicle the damage. “At the close of trading, Royal Bank of Scotland, a bank
that raised £12bn of fresh capital from its shareholders in June, was worth
only £18bn.” (That is what the sum total of its shares came to.)  “Shares in HBOS were priced 50% below the value
of a bid from Lloyds TSB to buy it.” The banking system faced catastrophe.

Yesterday saw the biggest ever one-day fall on the world’s
stock markets. The Dow Jones collapsed by over 800 points at one stage, pushing
the Dow below the 10,000 level. The FTSE 100 suffered its biggest one-day
percentage fall since Black Monday in October 1987 and the biggest points fall
ever. The Russian stock market fell by 19% and the exchange remains closed. The
sell-off engulfed Brazil, Indonesia and Saudi Arabia. The MSCI Emerging Markets
Index slumped 11%, its largest daily fall since 1987. This has been one of the
worst days yet in the 14-month-old credit crunch.

Neoliberalism, the dominant ideology of modern capitalism, is under
sustained challenge. For the past quarter of a century neoliberalism, sometimes
called market fundamentalism, the policy of non-intervention in the economy, has
been the ideology, and the set of policies that go with it, which has adamantly
opposed the rights and attempted to drive down the living standards of the
working class all over the world. Now the economic crisis is forcing the authorities
to intervene, regulate, and even nationalise firms because they have no choice.
Is neoliberalism dead?

‘Modern history’s greatest regulatory failure’; ‘The end of American
capitalism as we know it’; these are just two of the headlines thrown up by the
credit crunch, both appearing in the Financial
Times, the organ of British finance capital. In the course of a single
week, we have seen the collapse of three of America’s biggest financial
institutions: on Sunday 13th September, Bank of America announced it
was buying out Merrill Lynch, one of the world’s most famous investment banks; on
the following Monday, Lehman Brothers, the fourth largest securities firm in
the US, filed for bankruptcy; and, as if that were not enough, on Tuesday, the
US Federal Reserve invested $85 billion in a takeover of AIG, America’s largest
insurance company. More recently, on Thursday 25th, the huge US bank
Washington Mutual, in a state of collapse, was taken over by JP Morgan Chase,
in a move described as ‘the biggest bank failure in American history” (Saskia Scholtes, Joanna Chung and Deborah
Brewster, JPMorgan swoops in again, FT, September 26 2008).

Socialist Appeal 166 is out now!

In this new document Alan Woods outlines the real reasons for the
world financial crisis, what it means for us – and them – and what can
be done about it. He shows how Marxism both predicted the chaos which
has hit the money market and revealed the processes which caused it. He
warns that Capitalism will seek to find a way out at our expense – as
one talk show host put it; "When we mess up, we pay. When they mess up,
we pay!"

What a kick in the face for America’s
capitalist elite!  The US House of
Representatives voted to reject the Emergency Economic Stabilisation Act put
forward by Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke, President
Bush, Vice-President Cheney, the majority Democrat leader of the House, the
Republican minority leader of the House, both candidates in the upcoming
presidential election, Barack Obama and John McCain and all the American media. 

AROUND 2,500 Tube infrastructure workers at
Metronet are to be balloted for industrial action over breakdowns in industrial
relations following the victimisation of an RMT safety rep, dangerous plans to
reduce signals maintenance and attempts to impose rosters.

The
safety rep is Andy Littlechild. “Andy Littlechild has been fitted up on a bogus charge
that would embarrass the Spanish Inquisition, and to add insult to injury he
was thrown out of his depot at 3am with no means of getting home,” RMT general
secretary Bob Crow commented.

We live in exceptional times. The financial panic in the USA is
creating waves that are threatening to engulf the whole world. This is rapidly
transforming the consciousness of millions. Alan Woods
looks at how the world economy reached the stage it has, where it is on the
brink of a serious downward, so serious that it could be as worse if not worse
than 1929.

Yesterday Socialist Appeal editor Mick Brooks spoke to an audience of
40 at the ULU Marxist Society in London. Mick outlined the major
developments of the economy in the last five years. He explained the
reasons for the credit crunch and the collapse of major banks in the
last few weeks.

Labour is in electoral meltdown. The
newspaper headlines are screaming ‘We’re all doomed’ on account of the world
economic crisis. But they were desperately trying not to allow the real world
to impinge on the surreal world inside Labour Party Conference. 

“The weirdest conference I’ve ever attended,”
so said one experienced political commentator in reviewing this year’s Labour
Party conference in Manchester. With Labour trailing badly in the opinion polls
and having faced a series of bad to awful results in successive by elections,
local council elections and the London Mayoral election, you might have
expected the mood to be depressed and flat. And so for most it was.