THE rapidly deepening debt crisis of the capitalist system is leading to a financial collapse and a slump of historic proportions as the bankers’ hysterical demands for rescue from the Bank of England testify.
The B of E is being told that it must follow the example of the European, Japanese and US Central Banks. They have collectively pumped hundreds of billions into the debt infested banking system to try to prevent the collapse of major banks. The British banks want similar sums to be made available to them.
The same British bankers who declare that state benefits for the working class must be savagely cut and that this class must learn to look after itself, are now demanding unlimited state aid. In their panic they are not worried that this would threaten to bankrupt the B of E, the lender of last resort, through touching off a massive run on sterling and a share collapse.
The bankers, who, as we all know, pay no taxes have built up a mountain of debt, dressed up as potential value, that is as promises to pay, that can now never be honoured.
In fact, the Bank of England is being beseeched by the bankers to cut its own throat.
The B of E is already presiding over a bankrupt economy whose domestic debt of £1.4 trillion exceeds the country’s gross domestic product. It is an economy which is suffering a record balance of trade deficit, and whose currency the pound sterling is already being reckoned as being at least 30 per cent over-priced.
If it gives in to the modern ‘South Sea Bubble’ merchants it risks its own bankruptcy through touching off a run on the pound sterling that will trigger the greatest shares, and house price crash in history. The baying for it to do just this is getting louder and louder.
This is taking place in the allegedly ‘fundamentally sound’ economy that Prime Minister Brown, not so long ago claimed was his creation, after he had sold off a good portion of the country’s gold reserves for a pittance.
He added that this economy was special. It was immune from the boom to bust cycle. In fact, every ignoramus except Brown knows that boom to bust is inseparable from the capitalist system itself.
He continued with his declaration that he stands not for the sectional interests of the trade unions but for the national interest. Again, every ignoramus knows that the national interest = the interests of the bankers and capitalists. Brown fooled nobody.
He has now coupled light touch regulation of industry and a record low level of taxation of the bosses and bankers, with draconian pay cuts, job cuts and privatisations for the working class. He has recast himself as a Thatcherite engaged in the same civil war with the working class as Thatcher was with the miners.
In fact his Royal Mail managers, Leighton and Crozier have already threatened the Royal Mail workers with another miners strike, referring to the ruthless way that Thatcher used the capitalist state against the miners for a year.
But, as the successful prison officers illegal strike action proved, Brown has feet of clay and British capitalism is much weaker than it was in the time of Thatcher.
The whole public sector is now up in arms against the Labour government’s vicious wage cutting, privatisation attacks, that stem from the need to impose the whole weight of the capitalist crisis onto the backs of the workers.
Everywhere workers want to take action. But everywhere their weak, careerist trade union leaders refuse to call action, or curtail it after a few skirmishes.
The period of class compromise is long over but the compromisers are still at the head of the trade unions, paralysing them and betraying workers.
They must be swept away, and a new leadership built in the course of the struggle to organise a general strike, to bring down the Brown government and go forward to a workers government, that will put an end to capitalism, and bring in socialism.
The WRP is leading this historic struggle. Join it today.