THE Brown government has not just guaranteed all of the Northern Rock bank deposits, it has also underwritten its so called ‘commercial paper’, that is all of the worthless ‘promises to pay’, which cannot be honoured, and left the bank with many tens of billions of debts around its neck.
The Bank of England has turned this worthless paper into being as good as cash for the bankers, for the moment anyway.
This inflationary action is in line with the role of some of the most extreme right wing governments in the recent history of Europe.
Mussolini for example followed the same policy in relation to the bankrupted Italian capitalists in the period following the 1929 crash.
His regime took over and even nationalised bankrupt industries, pumping money into them, and then handing them back to the grateful employers.
The Brown government has, in fact, agreed to provide the same service for all of the banking institutions that are currently keeping their indebtedness as quiet as possible, but in reality need massive amounts of ‘liquidity’, that is untold billions of cash pumped into them.
The full depth of the current financial crisis has yet to emerge.
As it is, Britain’s position is that of the most indebted of the advanced countries, with a record balance of trade deficit, and a record level of domestic debt, where £1.3 trillion of debt dwarfs the gross domestic product of £1.2 trillion.
Brown’s pledge to bale out the banks will return to haunt him, when the deepening of the crisis sees the major banks demanding rescue.
This moment may come with the start of a major run on the vastly overpriced pound sterling.
We saw at the time of Black Wednesday that the Bank of England was powerless to stop the run, and capitulated, bringing Britain out of the ERM.
This time round it will be national state bankruptcy that stares capitalist Britain in the face, a huge catastrophe for a country that imports much more than it exports, including most of its food and fuel.
Brown’s policy is now steering Britain towards the rocks.
The fact that the whole state is concentrating on preserving the bankers and the capitalists leads it directly on to the prosecution of a permanent and desperate war on the working class and its trade unions, to seize much more of the surplus value that the working class produces, to hand it over to the bosses.
The economic crisis and this class contradiction is the driving force of the current struggle to smash the CWU communication workers union, by sacking 40,000 workers, terminating the industry’s final salary pensions scheme, bringing in extreme flexibility that puts the worker at the disposal of the employer, and bringing in a new code of industrial relations, which can be summarised as ‘the boss can do no wrong’.
What is happening to the postal workers is what is in store for every section of the workers as the Labour government goes all out to save the banks through robbing the workers using savage wage, benefit and pensions cuts.
The only solution for the working class is to get rid of this bankrupt capitalist system whose contradictions are recreating on a much bigger and more intense scale all of the features of the 1930s – extreme poverty in the midst of plenty in a situation of imperialist wars with rising class struggle at home, and revolutions.
That this is not just a British question can be seen by taking a glance at the US or at France where Sarkozy the new French president has raised the banner of class war against the workers, declaring that they will have to work much harder for less wages, and work much longer for a smaller pension.
The capitalist crisis is producing world revolution.
The workers of the main capitalist countries are now faced with overthrowing the capitalists, to go forward to a socialist society, as the only way to preserve their standard of living and their basic rights.