THE Bank of England yesterday cut interest rates to 1.5 per cent, the lowest level in its 315-year history, since the start of the bourgeois era.
The disaster-struck Engineering Employers Federation, whose members are seeing their factories sinking fast, reacted by saying that the move was ‘too timid’, and that the Bank should have cut rates further down to zero.
The TUC General Secretary Brendan Barber commented: ‘Though not unexpected, this is a welcome move. Banks and building societies must now pass this cut on to business and mortgage borrowers.’ Of this there is not the slightest chance, since the banks are seeking to build up their deposits, not further dissipate their bail-out cash from the Brown government.
The TUC continues that the Labour government must be ready to take further action to try to save the already stinking corpse of British capitalism.
Barber said: ‘But today’s cut will not fix the banking system and get banks lending again. With more job losses being announced every day, the government and the Bank of England must stand ready to take further action to boost the economy and make credit available once more, such as action to take out the toxic debts that are still hobbling the financial system.’
What this means is that the government must start to print money and greatly enlarge the monetary supply, in order to be a substitute for banks that refuse to lend.
This is the farcical situation that the capitalist crisis has produced – a government resorting to the printing press to be able to lend cash to the bosses, because the banks won’t.
Meanwhile the pound is sinking fast, price inflation is still rising, despite the slump, and a Zimbabwe-type crisis is beckoning.
All these things are being done as truly desperate measures to try to save a truly bankrupt system.
It would truly be much easier and be much more sensible to nationalise the banks and the major industries, guaranteeing the jobs and the homes of workers, by bringing in socialism.
Rather than do this, Brown is gambling his way into a massive inflationary nightmare, where the pound sterling will be used for wallpaper.
Meanwhile, as the motor car industry and steel industry begin to fold up, the trade union leaders of the GMB and Unison line up behind Brown, urging him to print money and hand it to the motor car and steel industry Corus bosses.
The word nationalisation and socialism does not cross their lips.
They are good-time trade unionists, who argue that trade unionism is only possible in a time of boom, and that when slump and inflation stalks the land the unions must help the bosses survive and hope that not every job is cut!
So far as wages are concerned these become secondary, with unions such as the GMB arguing that the better course is to do what they did at JCB, accept £50-a-week wage cuts in the hope of reducing the numbers to be sacked.
All that happened is that JCB accepted the wage cuts and then came back a few months later with the rest of its sackings.
Workers know that capitalism is finished and the longer that it is allowed to last the more they and their families will suffer.
They know that the trade union leaders see themselves, not as their representatives, but as partners of the bosses.
That the situation for capitalism is bleak is now acknowledged even by sections of the bosses.
The Institute of Directors chief economist Graeme Leach put the matter in the following way.
He said that the Bank’s apparent caution in not cutting rates further this month ‘highlights the uncertainty’ over ‘whether or not the Bank of England should go nuclear with limited printing of money or thermonuclear with extensive printing of money’.
The News Line and the WRP are building a new and revolutionary leadership in the workers movement.
This leadership will mobilise the working class to put backward capitalism into its grave so that humankind advances to the higher order of a socialist society.