USA inc. Too big to fail? /FRFI 206 Dec 2008 / Jan 2009

FRFI 206 December 2008 / January 2009

US finance capital has gone through extraordinary turbulence in the last few weeks. Through a torrent of financial measures, the US Federal Reserve (Fed) has now become the main participant in the US money market, since it is the only bank that lenders trust. The entire total of handouts, bail-outs, loans and guarantees now comes to a staggering $8.5 trillion – more than half the annual production of the US. The national debt is now over $10 trillion. Debt on this scale is unprecedented. Can it be sustained? Is the US ‘too big to fail’?

In past issues of FRFI we have shown how derivatives, exotic financial instruments, have proved to be so toxic to the financial system that leading US financial institutions have had to be nationalised or taken over to survive – or else allowed to go bankrupt. In our last issue, we showed that since the toxic assets have no market, they are difficult to price, hence cannot be used as security collateral in exchange for loans. The entire US money market began to freeze up; in place of credit, a furious hunt for cash began.

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US elections: facing the system’s insoluble contradictions / FRFI 207 Feb / Mar 2009

FRFI 207 February / March 2009

The United States has a new President, the 44th. Undeniably the election of a black citizen to the most powerful job in the world is a major landmark and welcome signal of change. Equally undeniable is the vast, palpable feeling of excitement amongst working-class and middle-class citizens about the possibilities for change and of goodwill toward the new President. Indeed, it is not only US citizens who have welcomed Obama’s election. But we have to look beyond these surface impressions to establish what this development means for US imperialism. US correspondent STEVE PALMER reports.

One of the consistent themes of our coverage of the Bush administration has been that many of its policies have been controversial amongst the ruling class: the Iraq war was clearly unnecessary, badly executed and rife with corruption; the war in Afghanistan has failed to strengthen the local puppet regime or to undermine support for the Taliban; the contempt for science manifest in pretending away global warming, impeding stem-cell research and in industry-manipulated drug approval; the bungled handling of natural disasters, such as Hurricane Katrina; needless alienation of foreign allies, such as France; the insistence on legalising torture; Guantanamo; the imposition of the Global Gag Rule linking aid to the ban on abortion and family planning advice anywhere in the world, and so on.

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