Moody’s has joined other credit rating agencies in downgrading its assessments for
The full name of the credit rating agency – Moody’s Investors Service – says it all. The analysis these agencies make and the actions they take are intended to assist those with money to magnify the value of their investments.
Over the last few months, as the crisis has deepened, the significance of Moody’s and the small number of other similar agencies has grown and grown.
In many ways they provide the information needed to allow the operation of the free market, advising investors on the credit-worthiness of borrowers, and helping borrowers to improve their attractiveness to lenders.
Informed investors profit from crisis, as they speculate against future market prices for shares and bonds.
Moody’s cut in
The downgraded ratings don’t just measure, however. They have a dual role. They are intended as a direct intimidation to those countries’ governments (and to all the others who are next in firing line).
Unless you take action to ensure that you overcome your difficulties in making these payments, the increased cost of borrowing more will make life impossibly difficult. It’s the classic money lenders’ threat.
The objective conditions that provide evidence for the downgrade are slowing growth, and accelerating recession leading to falling tax revenues which, in turn, make it more and more difficult for governments to make the interest payments due on the money they’ve borrowed.
So the rating cut also translates into a more severe assault on the lives of the people who live in the countries affected. The news about
For governments subservient to the capitalist economy, like the ‘socialist’ Pasok in
For the millions of people whose wages and pensions are melting away, whose jobs are being destroyed, health, education and social support systems being swept from under their feet, fighting the cuts is not optional either.
What resolution can there be to these opposite interests?
Strikes, protests, demonstrations, occupations are all now everyday events. Last Saturday’s occupation of towns and cities throughout the world is an important part of the answer to Moody’s symbolic measure of the power of capital.
But only a part. The regulation of finance demanded by many protestors is not an option for capital either.
This is an epochal moment providing both the necessity and opportunity to replace the rule of capital.
Those who claim to the know, like Mervyn King, governor of the Bank of England, are warning that “time is running out” for the global capitalist economy and that even dealing with
He is right there. The capitalist system has plunged into an irreversible crisis in which the only answer for the ruling classes is to punish the overwhelming majority through an unprecedented assault on living standards, services, job and right.
In all the temporary and permanent occupations of towns and cities, the question to be raised is not how to better manage capitalist society but how to achieve the democratic ownership and control of the banks, the factories, the mines and the supermarkets.