REPUBLICAN representatives walked out of the crisis talks with President Bush on Thursday night, denouncing him as a socialist for launching his $700 bn plan to bail out the US banks with the state taking over their debts.
The Democrats meanwhile said that while they supported the Bush bail out package, with some amendments, they would not do so if it meant that they could be depicted as supporting Bush and the bankers, when a big section of his own party was refusing to do so.
On Friday, a shell-shocked Bush had to declare, just as Wall Street opened, the understatement of the year: ‘We have a big problem’.
The problem of the US ruling class is that it has been hit by the capitalist crisis at a time when economically, militarily and politically it has been greatly weakened.
It now depends on others for its survival, and is too frightened to put the bankrupt banks to the sword, abolishing the debt, and to hell with the consequences, in the traditional and time honoured bourgeois fashion.
In fact, US giants like GM, Ford, and Chrysler are going bust, while the national debt has reached over £11 trillion dollars, and the federal government deficit is due to reach $540 bn this year.
The US depends on foreign powers such as China and the Middle East states to finance these debts and keep the US state from going bankrupt.
Abroad, the US armed forces are being seriously tested in Iraq and Afghanistan, in wars that have failed to achieve serious strategic aims (gas and oil resources). These wars have already cost over a trillion dollars and demoralised the US military. The US military does not relish the idea of having to undertake police actions against hungry millions inside the US itself.
At home, hundreds of thousands of workers have lost what were well paid, well pensioned jobs, due to government policies, leaving their sons and daughters with little or no future, but cheap labour.
These contradictions have created a very incendiary situation at home, and the Bush regime is fearful of the revolutionary consequences of allowing banks and swathes of industries to collapse putting tens of millions out of work and onto the streets.
Already, while Bush was making his short abject statement yesterday, the New York Central Labour Council was rallying thousands of workers to demand that any Bush plan, must halt the repossession of workers homes, and that the Bush tax cuts for the rich must be repealed, and that the Bush package should be used to make national infrastructure investments in highway, bridge and rail maintenance.
Bush meanwhile was unable to show that there was any progress in getting an agreement with the Republican Party on his bail out plan.
There was however, that morning, a further deepening of the crisis when the Washington Mutual Bank was closed down by the authorities, and forcibly sold, after $16bn was withdrawn in a run on the bank.
Bush pledged: ‘The legislative process is sometimes not very pretty, but we are going to get a package passed. We will rise to the occasion, Republicans and Democrats will come together and pass a substantial rescue plan.’
In fact the rapidly deepening crisis has thrown a massive spanner into the works of the presidential election which will now be dominated by real issues, instead of manufactured ones.
These issues will focus on the fight to defend workers wages, jobs and homes against capitalism in crisis, and the securing of full health care and decent pensions for all workers.
Workers will have already worked out that if Bush can propose the nationalising of bankers’ debts, workers must call for the nationalisation of industries that are going bust and threatening mass sackings, as well as the nationalisation of the banks and the drugs industry to provide health care and pensions for all.
In fact the working class will break with Obama in a shorter time than it took them to embrace him.
The socialist revolution is now looming in the USA. What it requires is the construction of a section of the International Committee of the Fourth International to guide it and lead it forward.