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Don't bail out the banks again

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It is plain that the capitalist world is in an absolute mess and that another financial crisis is brewing. After the global collapse of 2008, the financiers’ addiction to phoney profit did not cease, but has continued with even more debt being taken on. Today’s breed of finance capitalists are inherently greedy and poor learners. To them, if there is excessive debt in the system, they think “let’s take on even more and go crazy”.

Between 2007 and 2014, global debt far outstripped economic growth, rising from $142 trillion to $199 trillion. Many foolhardy creditors are belatedly wondering if they will ever get their money back, let alone see any interest accrue. No surprise then that once more the world of capitalism is awash with the signals and tremors of impending financial crisis.

There are growing concerns that all will not end well. And in that event we must not be fooled into bailing out the banks again. Falling for the same trick twice in a decade would not only be a repeat disaster but also a farce.

'Falling for the same trick twice in a decade would not only be a repeat disaster but also a farce...'

One of the myths peddled by Cameron and Osborne is that the astronomic debts we have been saddled with in Britain were caused by the previous government’s excessive spending. In fact they are due simply to the decision to bail out the banks, no matter at what cost – a decision made by Labour and supported by all parliamentary parties, including the Conservatives.

Speculative booms when they go bust have a habit of bringing down the whole economy. Marx and Engels pointed out in 1848 that these recurrent crises are endemic to capitalism – each one increasingly putting capitalism on trial. Now they are becoming more frequent and more intense. In recent decades we’ve seen the 1987 stock market crash, the Asian “tigers” collapse, the dot-com fiasco and the mother of all crashes, the 2007–2008 credit crunch.

We now have the prospect of a Chinese stock market collapse with its echoes of the 1929 Wall Street crash. Apparently anyone who can has been speculating in stocks and property. Seemingly the measures capitalism takes to respond to one crisis merely sow the seeds for the next.

Financial crises will wipe out more parts of the real economy unless we change tack. Therefore British workers must get our thinking clear before the event. Iceland let its banks fail and is now recovering. In Britain banks are held sacred: steel can go to the wall, but a bankrupt bank must be saved at all costs.

Organised voices must be raised now, well in advance of the next calamity. In the middle of the crisis, confusion of thought will be a convenient background to roll out the old faithful, pouring our money into the banks.

Sitting back while our society decays around us is not an option. The situation will only get worse. What will be left for our children and grandchildren if we do? We are not protestors calling for another betrayal from a Labour government. We are the ones seeking solutions to end decline and begin rebuilding.

No more cripplingly expensive bail-outs to banks. No more handouts to speculation-addled institutions. No more excuses to be made for yet more decades of budget deficit reductions and attacks on social provision such as health, education and welfare. Use a crisis positively to boost the real economy, restore industry and build a future for working people.

 

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