GERMANY’S Finance Minister Steinbruck yesterday attacked the Gordon Brown policy for saving the bankers and capitalists from the crisis, as recklessness itself.
He described Labour’s plans for trying to keep the British capitalist economy going as ‘breathtaking’ and ‘crass’, since it was going to double the national debt and would take generations of people to repay it.
Steinbruck slammed Brown for ‘tossing around billions’ and accused him of the most reckless behaviour. ‘The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking,’ he said.
He pointed to the fact that the UK’s total annual public sector deficit would soar to £118bn next year.
The German coalition government of Merkel has been very clearly stung by the British Labour government’s transformation into its opposite.
The Blair-Brown governments began with a Thatcherism that was driven to continuously cut public debt down to 35 per cent of GDP, declaring that inflation was the number one enemy of civilisation.
Once the weakness of the British economic base was exposed by the developing crisis, they mixed this puritanism with a cavalier drive to get people to take out as many credit cards as possible, and to get into debt to keep a weak economy going.
Now that the financial bubble has burst, the Brown government has declared that its number one fixation is to save the banks, and as much of the capitalist economy as it can, and that inflation is now a friend, very much the lesser evil.
It is to be spend, spend, spend, on the bosses and bankers to keep deflation from the door, and if this means a chronic inflation developing, then so be it, it is the lesser evil.
Already the pound is collapsing in relation to the euro and the US dollar, and even the bourgeois financial press is predicting a pound worth just one euro, and even a one dollar pound.
This is the road from a financial to an economic catastrophe, and this is what makes the flesh of the Germans creep, and brings them out in hot flushes – they have been here before.
In 1923, the German post war currency collapsed under the weight of its 1914-18 war contradictions, and the Weimar Republic of Germany was shortly issuing fifty-million Mark bank notes and postage stamps with a face value of fifty billion Marks.
The 1929 crash directly impacted on Germany, from which the US demanded the return of the huge loans that it had made in the wake of the hyperinflation – the 1924 Dawes Plan loan and the 1929 Young Plan loan.
The Weimar Republic was devastated. The Wall Street crash in 1929 had a shattering impact on the American economy, but it had an even greater one on Germany.
Companies throughout Germany went bankrupt and workers were laid off in their millions.
Unemployment rose from 650,000 in September 1928 to 6,100,000 in 1933, the year that Hitler took power, and prepared to get Germany out of its economic crisis and vast indebtedness through blitzkrieg wars.
It is this past that is making the flesh of the German bourgeoisie creep as they watch Brown’s cavalier disdain for the currency, and the collapsing pound of the new sick man of Europe.
The lesson of the 1930’s crisis is still very much alive today.
It is that the only way to prevent a capitalist financial collapse developing into slump, dictatorship civil war and world war is through the working class carrying out the socialist revolution in Europe and the advanced capitalist states.
This socialist revolution will expropriate the bankers and the capitalists and end the capitalist law of the jungle system.
In its place there will be established a socialist economy where production will be planned to satisfy people’s needs, and which will not have the capitalist drive to slump and war.