Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://www.socialistparty.org.uk/issue/542/6275

From The Socialist newspaper, 16 July 2008

US banking bailout

Global finance crisis deepens

Take the banks out of private hands!

Dow Jones plunges: dark days for the stock market

Dow Jones plunges: dark days for the stock market

THE REAL rate of inflation that workers in Britain face has hit 18.5%, according to the Daily Mirror, as the cost of food, fuel and household bills continue to rocket. Simultaneously with prices spiralling upwards, the economy is entering recession.

Hannah Sell

House prices are falling at the fastest rate ever recorded according to the Halifax. Unemployment is on the rise, with tens of thousands of jobs in the construction and finance sectors already gone.

But, bad as things are, this crisis of British capitalism is only just beginning. For a glimpse into our future it is only necessary to look across the Atlantic, to the nightmare unfolding in the biggest economy in the world, the US.

IndyMac, the Californian mortgage-lending bank collapsed on Friday. It was the biggest American lender to fail in more than two decades. US regulators are expecting dozens more banks to hit the wall over the coming year. However, it is the threatened collapse of Fannie Mae and Freddie Mac, the US's two largest mortgage finance companies that is striking terror into the hearts of US capitalism.

Last Sunday the Bush administration asked the US Congress to approve an emergency rescue package to prevent the collapse of Fannie and Freddie, which together guarantee more than $5,300 billion in US mortgages, almost half the US mortgage market.

As the International Herald Tribune put it: "They [Fannie and Freddie] are too big to fail...If they go down, so do whole neighbourhoods. So perhaps, does the global financial system." There is no 'perhaps' about it. The failure of Fannie and Freddie would result in an economic tsunami that would make the global aftershocks of the 'sub-prime' crisis look like a storm in a teacup.

As a result, the present political representatives of US capitalism, the neo-con free market zealots who spent the last decade warning the world's governments against the evils of state intervention, have been forced to propose that Congress extends a limitless line of credit to Fannie and Freddie.

They have also promised to step in and buy a stake in Fannie and Freddie should the crisis get worse. Like the earlier rescue of Bear Stearns bank, the risk has been nationalised, while future profits remain in private hands.

The Financial Times, representing the views of much of finance capitalism, argued in its editorial for outright nationalisation, saying: "It would be a cosmetic change; the government is already backing them; it is absurd they are not now on the books."

Capitalism does not work. Its representatives are being forced to turn to state intervention on a huge scale to prop up their system.

Of course, capitalist governments are intervening, not so that workers have a home, a job, a pension, or a living wage. On the contrary, both the Bush and Brown governments are trying to force the working and middle classes - via wage cuts and unemployment - to bear the brunt of the crisis.

Meanwhile speculators and hedge fund managers are still raking in billions by betting on where the economic tsunami will hit next.

The Socialist Party demands genuine, socialist nationalisation of the banks and mortgage lenders, not in the interests of big business, but instead run in the interests of society under democratic workers' control and management, providing, for example, cheap and secure mortgages. Compensation should not be paid to the fat cats and rich speculators; it should only be paid on the basis of proven need.

Donate to the Socialist Party

Coronavirus crisis - Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

  • The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
  • Our 'fighting coronavirus workers' charter', outlines a programme to combat the virus and protect workers' living conditions.
  • When the health crisis subsides, we must be ready for the stormy events ahead and the need to arm workers' movements with a socialist programme - one which puts the health and needs of humanity before the profits of a few.
Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.
We therefore urgently appeal to all our viewers to donate to our special coronavirus appeal.

Please donate here.

All payments are made through a secure server.

My donation

 

Your message: 

 


In The Socialist 16 July 2008:

Global finance crisis deepens

Feature: Price inflation - the sickness of capitalism


Global Warming

Change the system! not the climate


International socialist news and analysis

Sri Lanka general strike

Military threat to Iran stepped up


Socialist Party NHS campaign

NHS - birthday greetings and warnings

Ambulances - calls doubled, no extra staff

Polyclinic courts Branson

Ex-Foley-ated! Union bashing NHS boss resigns as staff defeat pay cuts


Socialist Party campaigns

Glasgow East by-election Socialist change needed

Durham Miners' Gala rejects New Labour

One Wales rule for the rich...

Post Office Leeds: Haranguing in the rain

Greenwich: Employers' hypocrisy

Bangor: Bus protest


Workplace news and analysis

Visteon takeover: Workers' determination defends conditions

Shop stewards conference: Workers and war

Workplace news: In brief


Anti-racism

Notts campaign against the racist BNP grows

Anti-racism stall in Wrexham

No to the BNP's attempt to divide Stoke's communities!

'Dear Boris' - we will NOT be silenced!


The Socialist Comment

Government attacks single parents


Socialist Party review

Live Working or Die Fighting: How the working class went global


 

Home   |   The Socialist 16 July 2008   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

Global:

triangleA new world order - global reconstruction after World War Two

triangleA CWI May Day 2020 statement

triangleGlobal covid-19 pandemic, capitalist crisis and bitter class polarisation in the United States

triangleCoronavirus plunges capitalism into global turmoil

triangleCoronavirus infects the world economy

US:

triangleUS: Police escape justice over Breonna Taylor killing

triangleTrump's failure over western US wildfires

triangle71,522 raised: Thank you, we've smashed our target again

triangleStudents trapped on Covid campuses speak out

Capitalism:

triangleThe Socialist Inbox

Banks:

triangle'FinCEN Files' expose rampant financial corruption: nationalise the banks!

Economy:

triangleSafety overridden in drive to bolster the economy

Market:

triangleSocialist planning is the alternative

Sub-prime:

triangleTories flog bank assets to hellhound US profiteers

News and socialist analysis

News and socialist analysis

30/9/20

Trade unions

Trade unions must fight to put their stamp on events

30/9/20

Covid

Under the microscope

30/9/20

Tax

News in brief

30/9/20

Unemployment

Tory scheme won't halt mass unemployment: mobilise the unions!

30/9/20

Jobs

Job Support Scheme - too little, too late

30/9/20

Covid

Covid restrictions expose Tory splits

30/9/20

University

Students trapped on Covid campuses speak out

23/9/20

Housing

Extend eviction ban! Cap rents! Build council homes!

23/9/20

Coronavirus

Testing shambles: unions must fight back

23/9/20

Universities

Covid and the campuses

23/9/20

Coronavirus

North East lockdown: simmering anger at Tory incompetence

23/9/20

NHS

Fund NHS and pay rise now

23/9/20

Coronavirus

Tory Covid chaos

23/9/20

Banks

'FinCEN Files' expose rampant financial corruption: nationalise the banks!

23/9/20

Amazon

News in brief

triangleMore News and socialist analysis articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: info@socialistparty.org.uk

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 079 8202 1969

East Mids: 077 3797 8057

London: 075 4018 9052

North East: 078 4114 4890

North West 079 5437 6096

South West: 077 5979 6478

Southern: 078 3368 1910

Wales: 079 3539 1947

West Mids: 024 7655 5620

Yorkshire: 077 0671 0041

ABOUT US

ARCHIVE

Alphabetical listing


October 2020

September 2020

August 2020

July 2020

June 2020

May 2020

April 2020

March 2020

February 2020

January 2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999