US Ruling Class Forced To Nationalise Bankrupt Mortgage Giants


THE nationalisation of the Fannie Mae and Freddy Mac mortgage finance companies by the ultra right wing Bush administration is a forced admission of the complete bankruptcy of the capitalist system and the private ownership of the means of production.

The established bourgeois theory is that capitalism equals the survival of the fittest, which is held to be an eternal and immutable law of nature. It is said to be a source of strength that every boom leads to a slump, when all that is weak, illusory, fraudulent and therefore valueless is wiped out, so that the remaining productive forces can be unleashed once again to reach even greater heights, although carrying within the new boom the germs of an even greater economic catastrophe.

However, now we see the Bush regime and the US state intervening to rescue two major but completely bankrupt financial institutions, and taking unto themselves a debt potential of up to $3 trillion, risking not just the collapse of the US dollar but the bankrupting of the United States of America.

The US ruling class has been forced to take such a humiliating and risky measure by the fact that capitalism as a world system is in its death agony, and reached the limits of its progressive development many decades ago.

Today it is being challenged economically and politically by the strength of the working class in the metropolitan capitalist states, by the steadfastness of the anti-imperialist nations such as Iran, and by the economic and political challenge posed by the gains of the international working class achieved through the Russian and Chinese revolutions.

Bush is fearful that a collapse of the US economy will touch off an insurrectionary movement of the working class and the middle class in the US (the beginnings of which can be seen in the movement that has raised up Barack Obama.

He also knows that states such as China, whose state owned institutions have invested heavily in Fannie May and Freddie Mac, as well as in US treasury bonds that underpin the US federal deficit, would have little alternative but to move their funds out of the dollar, and out of the US, if the two mortgage giants are allowed to go bust.

The US ruling class no longer bestrides the world like a colossus, it is fearful of the future and has had to retreat to try and gain time for the measures that it knows will be required to deal with the crisis.

It is reduced to trying to keep a stinking corpse alive!

In all of the major capitalist countries the depth of the crisis is going to rapidly lead to revolutionary struggles to decide which class is going to bear the cost of the crisis.

The ruling class is seeking to drive the working class back beyond the conditions of the 1930’s depression, while the working class in order to win the struggle will have to take the power, expropriate the bourgeoisie, smash the capitalist state and establish socialism.

In this struggle the working class, as the only really revolutionary class, represents historical progress, historical necessity and the socialist future.

The bourgeoisie represents a failed system whose private ownership of the means of production has unleashed an epoch of slump, wars and revolutions, and is seeking in its death agony to drive humanity backwards not forwards.

The decisive question facing the working class is the building up of the revolutionary leadership of the working class in every country, especially in the UK, where the reformist trade union leaders are already getting themselves ready to work with the Tories, whose return they now consider to be inevitable.

The response of the working class must be to organise the British and the world socialist revolution, to go forward to the new and higher form of a socialist society.