AT THE Tory Party conference on Monday, Chancellor Osborne outlined the three mistakes made by government, the bosses and the bankers which he said led to the development of the current world wide economic catastrophe, that is still deepening and still bringing down the banks, and creating the conditions for a massive slump.
He said: ‘First, the last government borrowed too much money. . . What a catastrophic mistake. Let us make sure it never happens again.
‘The second mistake was made by banks who ran up staggering debts of their own, buying financial instruments even they couldn’t understand.
‘The banks and those regulating them believed that the bubble would never stop growing, that markets were always self-correcting, that greed was always good, that their ponzi schemes would never collapse, and that none of the debts would ever turn bad.’
However, the Tories never warned at the time about these mistakes. In fact many had their snouts deep into the trough, and many even called for a greater inflation.
Osborne added: ‘And there was a third mistake.
‘Our European neighbours plunged headlong into the euro without thinking through the consequences.’
In fact, the Tories brought the UK into the European Union and and into the ERM crisis, while Britain has had to pay billions to help prop up the Irish ruling class, and will also have to contribute further billions to try to stop the Euro Zone and the British banks, that are up to their necks in Greek debt, collapsing.
Osborne continued to warn: ‘Right now, temporary tax cuts or more spending are two sides of exactly the same coin – a coin that has to be borrowed.
‘More debt that has to be paid off. . . But borrowing too much is the cause of Britain’s problems, not the solution. That the world is in the grip of a debt crisis has not undermined that argument – it has made it stronger.’
Coming to the point of his speech Osborne added: ‘Keeping interest rates as low as possible for as long as possible is crucial for dealing with a debt crisis. It’s the first part of our plan. But because banks are damaged they won’t lend at the current low rates.’
Believe it or believe it not, the Tory solution to the problems of banks that won’t lend because they fear they will never be paid back, is the government taking over their role, and robbing the public purse to do so.
Osborne said: ‘So as part of my determination to get the economy moving I have set the Treasury to work on ways to inject money directly into parts of the economy that need it such as small businesses. It’s known as credit easing. It’s another form of monetary activism.’
‘Sober’ Osborne turns into the mad gambler prepared to lend billions of Treasury money without any guarantee of its return. Labour’s ‘mistakes’ are to be magnified one hundred fold!
In order to be in a position to hand out billions to dodgy businesses, and hoping that they will be able to repay, the savage attacks on the working class, the poor and the middle class will have to be stepped up immeasurably, to stave off state bankruptcy.
The Tory chancellor wants to have super austerity for the working class, the middle class and the poor, to try and defend the pound, while he steps up the mugging of workers, who are already carrying the bankrupt banks on their shoulders, to try to rescue business from the crisis.
This is truly a desperate measure by a very desperate government.
There is only one way out of this crisis for the working class. This is a socialist revolution that brings down the Tory led coalition, overthrows the ruling class and nationalises the banks and the major industries under workers’ control, and brings in a socialist planned economy.
