THE most powerful capitalist economy in the world is now living on a veritable knife edge, liable at any moment to crash spectacularly, bringing down the banks and economies of the rest of the world.
The precarious nature of US capitalism was amply demonstrated last week when on Wednesday, supposedly in response to economic data showing that the US and all the world economies were ‘slowing’ down, the Wall Street stock market collapsed, wiping billions of dollars off shares.
This collapse was halted and reversed the following day and share prices once again soared up to record levels.
What caused this reversal was a rushed out statement by a member of the US Federal Reserve Bank indicating that the Fed was preparing to reverse its stated policy of ceasing Quantitative Easing – in other words the world’s bankers and speculators breathed a huge sigh of relief at the thought that the US government was going to carry on pumping free money into their pockets.
All this free money has gone exclusively into massive speculation, risky financial investments that are guaranteed to provide vast profits for the financiers in the short term, while creating a huge bubble that will inevitably burst and bring the entire rotten system down.
As far as the financiers and banks are concerned, there is no point in investing in industries and businesses that are on their knees and unable to make the profits that the capitalist class crave, so let them sink while the bankers wallow in huge wealth confident in the knowledge that the capitalist state will always bail them out.
That is not to say that sections of the ruling class aren’t worried about ‘wealth inequality’ – some are very worried indeed, fearful of the revolutionary implications it holds.
Last Friday Janet Yellen, the head of the Fed expressed her fears about the fact that the richest 5% of Americans now hold 63% of the country’s wealth, a fact she claimed is not ‘consistent with American values.’
The very idea of ‘American values’ whereby anyone from a humble background can work their way up to become wealthy beyond dreams has been shattered by the economic crisis of capitalism.
One only has to look at Detroit to see how this future for capitalism is working out. This city, once the powerhouse of US industry, is now a bankrupt wasteland ruled by an unelected ‘Emergency Manager’ who has complete control over the city’s finances, a move supported by both the Democrats and Republican parties.
City workers are having their pensions and pay cut while everything from refuse collection to the city’s art galleries are being sold off.
Recently, the bankruptcy court upheld the right of water companies to cut off supplies to the thousands of impoverished residents unable to pay.
Detroit workers face the kind of water poverty and its attendant health risks more usually associated with impoverished countries in Africa. This is the extent of the crisis facing the working class of America.
This crisis is having a revolutionising effect on American workers – the country has been convulsed this year by strikes for union recognition and increased pay as the working class demonstrates its determination to fight against having the crisis dumped onto its back.
The response of the trade union bureaucracy has been to call for a federal minimum wage increase to $10.10 an hour – less than the minimum wage in Britain.
While the leaders of the AFL-CIO make this wholly inadequate demand for a pay increase, they remain completely wedded to the bourgeois Democratic Party.
What is clear is that in this crisis the trade unions must make a complete break with the Democrats.
The unions in America stand today at a crossroads, to advance they must break with the bourgeois parties and build their own independent Labour Party to represent the interests of the US working class politically.
Once done, this will open the door for the development of a new revolutionary leadership in America which alone can resolve the crisis of US capitalism by organising the working class to carry through through a socialist revolution.
