At the weekend, bosses at the Bank of England announced that they had drafted in the ex-chairman of the US Federal Reserve Bank (Fed), Ben Bernanke, to take charge of a review into the ‘forecasting errors’ that have led to the Bank consistently making wild underestimations of the financial crisis driving British capitalism into recession.
The Bank has become the enemy number one for the Tories, in a desperate attempt to shift all the blame for a soaring cost of living crisis that is driving millions of workers and their families into poverty onto the Bank and its hapless governor Andrew Bailey.
Bernanke’s appointment was greeted with great enthusiasm by senior Tories, who are desperate to make the Bank the whipping boy for the capitalist crisis with Iain Duncan Smith, former Tory leader, saying: ‘Given the dismal record of Bailey who missed the dangerous growth of inflation which led to a dangerous cost of living crisis, I am sorry that Bernanke isn’t now replacing Bailey.’
The cost of living crisis is most certainly a danger to the ruling class.
A report yesterday by the Joseph Rowntree Foundation warned of a ‘debt timebomb’ as the Bank continues to increase interest rates driving up inflation and forcing millions of families to rely on loans or credit cards to pay for essentials like food, energy and rents.
It’s a debt timebomb for workers and a debt timebomb for the Tories, as they struggle with a massive national debt of nearly £2.6 trillion and interest repayments on this debt heading through the roof as the Bank decides this week on yet another increase in interest rates.
The Bank is being blamed for its policies of near-zero interest rates and pumping billions of worthless paper money under its Quantitative Easing (QE) programme to prop up the banks and financial sector after the banking crash of 2008.
The architect of these policies was none other than Bernanke who was chair of the Fed in 2008 – now this is the man Duncan Smith wants to run the Bank of England!
This conveniently overlooks the fact that the banks and Tories were enthusiastic in their support for QE and zero-interest rates.
They cheered when all the worthless money was handed out, causing massive increases in profits for the banks and all the debt-fuelled speculation that drove stock markets to record highs providing shareholders and Chief Executives with billions in profits.
Behind all the wild excess that followed the 2008 crash was the understanding that the working class would be forced to pick up the bill when all the production of worthless money inevitably led to hyper-inflation and world recession.
That day of reckoning has now come for British capitalism, as the ruling class face a working class that is refusing to pick up the bill for the capitalist crisis and is taking action to defend its wages and services.
Desperate to pin the blame for the revolutionary crisis rapidly unfolding on anyone but the entire capitalist financial system, the Bank of England is being portrayed as the villain.
This was made explicit in an article in Sunday’s Telegraph by Neil Record, a former economist at the Bank, headed: ‘The disastrous consequences of the Bank’s actions are now becoming clear’ and ‘The state must come clean about the true nature of Quantitative Easing and its costs.’
The capitalist state will never come clean with the working class and confess that QE and zero-level interest rates had only one aim – to keep the banks from collapse and make the working class pay the price when it was policies of the central banks that caused an inflationary spiral and economic recession leading to poverty and mass unemployment for workers.
The fact remains that capitalism has no economic fix out of its crisis.
Bringing in Bernanke to ‘save’ British capitalism marks the chaos at the heart of a capitalist system in its death agony with no way out except to wage a class war against workers to dump the crisis on their backs.
For the working class, the only way out of this crisis is to dump capitalism in the dustbin of history and replace this bankrupt capitalist system with socialism.
