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Sooner or later the financial tsunami will run into the sand, but in
its wake the real economy will be left in recession. The immediate
crisis will have abated, but the sludge, mud, sewage and devastation
lasts much longer. They’re still mopping up the mud from the 2007
floods… how long will the recession last and how deep will it go?
A successful ‘Marx in London’ tour was organised last
Saturday by ULU Marxists as part of its activities in promoting the ideas of
Marxism. About 20 students came on the tour to see the sights where Marx
worked, lived and drank in London. Rob Sewell introduced the tour with an account of Marx’s
life and times.
Following the government’s £50 billion plus handout to the
banks and city gents, they are now short of cash. We can all expect to be
forced to pay for this through higher taxes and cuts in government services,
with the money from the taxes used to fund the millionaires’ bailout. For
students going to university this has begun sooner than expected.
“The
Icelandic economy is prosperous and flexible” (IMF 4 July 2008)
(There
is) “a very real danger…that the Icelandic economy, in the worst case, could
be sucked with the banks into the whirlpool and the result could be national
bankruptcy.” (Iceland’s Prime Minister Geir Haarde – address to the nation 6
October 2008)
What happened to Iceland in the period of three
months to explain this change?
Communism is
suddenly back in fashion in Japan. The reason is not hard to seek. ‘Lifetime
employment’ is a thing of the past for young workers, who face a casualised and
insecure future. One in three is temping. Some 44% of country’s workforce are
part-time only, while a profusion of short-term contracts has created a
generation of freelancers who are often ‘between jobs’. They have already worked
out that, as recession bites, they will be first in the firing line. They are
drawing political conclusions in increasing numbers.
China’s urbanization process has
reached a critical juncture. Inequality between town and country is producing
explosive revolts surrounding the cities. The problem of how to contain these
revolts is at the core of policy making and is reflected in conflicts inside
the Central Committee of the ruling Communist Party.
The background to this is that rural
rebellions have escalated over recent years. Yu Jianrong director of the Rural
Development Institute’s Social Issues Research Center at the Chinese Academy of
Social Sciences gave explicit warnings to the Chinese leadership of a revolutionary crisis developing in
the countryside and new proletarian zones in the interior provinces.
Over the past couple of weeks, Britain,
many other European countries and the US have announced plans to nationalise
large chunks of the financial sector, thereby taking a good proportion of the
commanding heights of the economy into public ownership. The British government
has been forced to effectively part-nationalise three of the country’s biggest
banks, RBS, Lloyds TSB and HBOS. The plan, which includes putting treasury-appointees
on the boards of all three banks, will cost the taxpayer in the region of £37
billion. Many of the major European powers are unveiling similar plans, and
even the US, the ideological bastion of free-market capitalism, has been forced
to invest $250 billion into buying stakes in nine of its banks (though these
‘non-voting preference shares’ mean the US government will have no direct control
over the running of these banks).
New Labour has climbed down before big business again, on the issue of a windfall tax on the energy companies. Brown’s pathetic advice, that the elderly should wrap up warm and
switch off lights when prices go up, makes you wonder whether we voted
for Labour or the Big Six gas and electricity companies to run the
country in the last election.
New Labour is the bastard child of
Thatcherism. Blair, Brown and Mandelson inherited from the evil witch the
belief that the market (capitalism) was god and that the rich are the wealth
creators we must all bow down to.
As Marxists know, and as the present crisis
has shown, this is the opposite of the truth. But this has been the foundation
of all the policies carried out by New Labour over the past years.
Parliament will once again be discussing the Human Fertilization and
Embryology Bill in October. Once again battle is joined between those
who defend the right for women to decide over their own bodies, and
those who want the state to do it for them. This time, however, there
is room for improvements to existing legislation – not just calls to
turn the clock back fifty years.
The disarray among ruling circles in the
European Union could hardly have been more clearly depicted than at the
‘summit’ over the weekend of October 4th and 5th. In
reality the event was little more than a photo-shoot. The meeting brought
together the Prime Ministers of Britain, Germany, Italy and France. The Prime
Minister of Spain clearly had his nose put out of joint by the lack of an
invitation. The other EU members (currently 27 nation states) also may well
have asked why they weren’t to be asked to take part in decisions that could
profoundly affect their futures.
The only realistic reply could be that the
meeting would have been even more of a shambles. Europe cannot get its act
together. First the participants at the summit swore to unite in action in the
teeth of the crisis. Secondly, when it came to pumping money in to the European
banking system (which must come if the plan is serious) they all got cold feet.
National interests came first. German finance minister Peer Steinbruck blew the
gaff. “We as Germans do not want to pay into a big pot where we do not have
control and do not know where German money might be used,” he complained. Since
the EU nations are not hanging together, they will hang separately.
Last
month we reported how insurance giant AIG had to be bailed out by the US
government for $85bn. It’s all part of ‘Socialism for the rich, capitalism for
the poor.’
Less than a week after the bailout, the company held a week-long retreat for
its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running
up a bill of $440,000,
At the opening of a House committee hearing about the near-failure of the
insurance giant, Congressman Henry Waxman showed a photograph of the resort.
Waxman said the executives spent $200,000 for rooms, $150,000 for meals and
$23,000 for the spa.