Every passing day sees more of the consequences of the global meltdown coming to light. Financial institutions implode and disappear and increasingly desperate measures are taken by private sector banks, central banks and governments.
Now the focus has changed from trying to avert the crash, to managing its descent, softening its landing as it falls to earth, ensuring that the capitalist financial system survives, at all costs.
This is the real meaning of Alistair Darling’s statement that "financial stability had to trump the competition concerns". This justifies changing the law to allow the new Lloyds TSB-HBOS conglomerate to dominate the British banking system. "We will take whatever action is appropriate to maintain stability in the banking system," he said. "The entire economy depends on that."
On the other side of the Atlantic, the US Treasury is proposing a plan to absorb all of the bad debt arising from the mortgage crisis. Unsurprisingly, since this would pass the whole cost directly to US taxpayers and the Chinese financiers of American government debt, the US stock market had its best day for years.
It can’t and won’t last. This is a truly insane open-ended proposal, given that, as a result of the decades of unregulated explosion of fantasy finance, nobody in the world has any idea of the true value of the outstanding credit and debt. Hey, but we could then get back to raking in the profits.
For Darling, Brown and Bush, survival of the system that has failed, is broken, will come even at the expense of millions, perhaps billions of people who will be its victims as the markets find their “solutions”. With a week of dramatic, unprecedented contraction and consolidation in the finance industry comes the first wave of unemployment. Estimates of 40,000 job losses from the New Labour-sponsored takeover of HBOS by Lloyds-TSB are hardly even the tip of the iceberg. Predictions for the impact on the US workforce put job losses as high as 500,000 per month.
In response to the news that Britain has seen the biggest climb in unemployment benefit claims in 16 years, Trades Union Congress general secretary Brendan Barber said the "figures show that unemployment is starting to accelerate and it now looks very likely that total unemployment will reach two million during 2009." So what stirring message has he for the six million plus trades union members as recession engulfs the economy?
“the TUC is concerned that unemployment has been sneaking up in the last few months and it's up to unions, employers and the government to halt and reverse this trend as soon as possible. With unemployment rising, people are looking to the government for a response and economic measures will be far more welcome than yet another round of welfare reforms.”
The TUC’s “expert” was just as hopeless as his boss. Head of economics and social affairs Adam Lent said: "Poor growth and falling consumer confidence are a far greater risk to the economy than inflation, which is still relatively low. The Bank of England can play a key role in helping to reinvigorate the economy by cutting interest rates this month." To the TUC bureaucracy, we say: Thank you and good night.
Even the Tory Daily Telegraph has acknowledged that the crisis may have something to do with the “internal contradictions of capitalism”. One aspect of this is that New Labour is the party using the levers of the capitalist state to shore up the system, whatever it takes. We are witnessing not just market failure on a grand scale but the utilisation of the machinery of state by bankers and corporations to save their skins. This road leads in one direction only, as history has demonstrated.
The Convention of the Left starts tomorrow. Those attending have an historic responsibility to shape and build a movement that answers the capitalist crisis by posing the revolutionary alternative – an economy based on co-ownership and self-management and a truly democratic politics based on people’s power in place of corporate power.