There Is An Alternative to the Crisis!

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There Is An Alternative to the Crisis!

Gordon Brown last month announced a new set of measures to bail-out the banks, which he said would tackle the withdrawal of credit by the banks from businesses and families. The bottom line was to boost the balance sheet of the banks, and rescue the banking sector from the failure of the risk-taking based on sucking wealth from the socialised economy and parcelling up debts as assets. The Prime Minister’s measures were supposed to insure the banks against future losses on their existing debts.

But the banks wanted the bail-out to counteract the write-downs forced on them by the crisis of their parasitism. Despite the protestations of the government for a year and more that public funds were being made available to the banks from Northern Rock to the Royal Bank of Scotland in order to reverse the current economic and financial crisis, no such reverse has occurred. Nor can it occur when the government simply sees no way forward but to bolster the owners of big capital and conjure up yet more pay-the-rich schemes. Indeed, the magnitude of these schemes, far from solving the crisis, is threatening to boost the already deepening depression, destabilise the country’s fiscal policies completely, and unleash out of control an increasing budget deficit, to be underwritten at taxpayers’ expense.

In this context, the major players in this crisis have all been intent on trying to blame each other for this terrible fiasco and deflect the anger of the working class and people. The CEOs of the big banks have said sorry for not seeing the iceberg soon enough as they sailed at full-speed into it, but have taken no responsibility for the conduct of the ship. However, the concern of the banks, the government and the financial regulators has been to rescue the credibility of the banking system, and not to take the measures necessary to safeguard the social economy, put an end to public spending accelerating towards all being channelled to the rich and put the needs of the people in the first place.

The crisis is causing a leap in the number of people who are losing their jobs, a threat to spending on social programmes and the further destruction of the manufacturing base. Meanwhile the state is going to extraordinary lengths to protect the owners of capital. Its ownership of the banks’ share capital has purely this aim. Rather than drawing the conclusion that there is an urgent need for public not-for-profit, no-interest banking, together with its credit and insurance functions, the government is merely drawing attention to the need for more disinterested financial regulation and the end of the short-term bonus system.

The truth is that these chiefs of the big banks are criminals of the first order, who control and direct the direction of the economy. Their parasitic concerns are but a concentrated reflection of the old arrangements of the monopoly capitalist system. Not only are new arrangements called for, but these monopoly capitalist chieftains should be removed from all responsibility forthwith, and tried for crimes against the people. The private character of the whole appropriation of wealth is causing this massive crisis of the socialised economy and its public, organised character.

How much wealth has been siphoned off by these parasites? Two years ago, it was being reported that the big five banks made around £475 from every household in Britain. Just look, for example, at the Royal Bank of Scotland. Even its projected loss of £24.1 bn for the last financial year includes what is described as a £15-20 bn goodwill charge on past acquisitions. In other words, it has fraudulently overvalued past assets that it has acquired. Up to the last financial year, the RBS was proudly declaring ever increasing profits. Just taking the bank’s own figures (from its financial reports), net operating profits before tax for the 11 years 1997-2007 are as follows: 1997 - £0.768 bn; 1998 - £1.001 bn; 1999 - £1.211 bn; 2000 - £3.373 bn; 2001 - £4.275 bn; 2002 - £4.763 bn; 2003 - £6.159 bn; 2004 - £6.917 bn; 2005 - £7.936 bn; 2006 - £9.186 bn; 2007 - £9.900 bn. Total £55.489 bn.

The conclusion can be drawn that a renewal of the financial sector of the socialised economy to restrict monopoly right is long overdue. The private banks and insurance monopolies must be taken within the public system. This is the sentiment of the working class and people, and the government should accede to this demand and rather than throwing money at the banks in an arms-length transaction should integrate them into a publicly-owned financial system serving the needs of all citizens and investing in a self-reliant social economy.

Owners of monopoly capital want to be bailed out of a hole, but they are extremely antagonistic to the demand to renew the socialised economy because that threatens their very raison d’être. Only a government dedicated to setting the direction of the economy through financing social programmes and directing public enterprises that stand against monopoly right can change the situation. The old arrangements have once again been shown to institutionalise crisis. What is required are new arrangements put in place through the election of a pro-social government. To bring such a government into being is the immediate task of the working class and people.

There Is An Alternative to the Crisis!