America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich – it’s just bailing out financial institutions. This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this.Billionaire investor Jim Rogers

W-w-what the [bleep] just happened?
In just two weeks, the world’s largest mortgage purchasers, Fannie Mae and Freddie Mac, got nationalized by right-wing conservatives; the last of the large Wall Street investment banks either went bankrupt (Lehman), or got bought by a conventional bank (Merrill Lynch by Bank of America), or turned themselves into regular commercial banks (Morgan Stanley, Goldman Sachs); the world’s largest insurance company, AIG, got an $85bn loan from the US government in exchange for 80% of its assets; the world’s largest retail bank, Washington Mutual (WaMu) failed after depositors had withdrawn $17bn and was bought by JP Morgan.

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FRFI 205 October / November 2008

The turmoil in global financial markets has finally forced Labour’s smug Chancellor Alistair Darling to face up to reality. In a short period of six months, Britain, according to Darling, has gone from being best placed of the G7 major capitalist countries to withstand global economic turbulence (March), to facing an economic downturn that looked set to be more profound and long lasting than initially expected (mid-July), to confronting an economic climate that is ‘arguably the worst in 60 years’ (end of August). DAVID YAFFE reports on the impact of the financial storm now hitting the British economy.

To prevent the global financial system going into meltdown, over an extraordinary period of ten days from 7 September, the most right-wing neo-liberal US government ever nationalised the two giant mortgage providers Fannie Mae and Freddie Mac; refused to bail out the fourth largest investment bank, Lehman Brothers; helped direct the takeover of investment bank Merrill Lynch by Bank of America and rescued the world’s biggest insurer AIG, by lending it $85bn in return for an 80% stake, to prevent it going bankrupt. In addition the world’s central banks injected some $550bn into the money markets in an effort to get them functioning adequately again. Finally came a last-ditch US government plan to create a $700bn fund to buy toxic assets – value unknown – from the banks in an attempt to ease the credit crunch. This is a desperate effort to socialise the unsupportable debt of a parasitic and decaying capitalism.

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CAPITALISM IN CRISIS: Desperate times Desperate measures /FRFI 206 December 2008 / January 2009

FRFI 206 December 2008 / January 2009

Despite trillions of dollars being thrown at the global financial system by the dominant capitalist states, the crisis of capitalism continues to deepen. By the end of October 2008, according to the Bank of England, the world’s financial companies had lost $2.8 trillion. The US is almost certainly in recession. It has the highest unemployment rate for 25 years. Japan and Germany, the world’s second and third largest economies, are in recession, as is most of the European Union. This crisis threatens to be on an even bigger scale than in 1929. No part of the world capitalist system will escape its consequences.

Desperate measures on an unimagined scale have been taken by the world’s leading capitalist powers and their central banks to limit the fall. In its recent Economic Outlook, the OECD, the intergovernmental organisation of mostly rich capitalist nations, puts Britain among countries such as Hungary, Iceland, Ireland, Luxemburg, Spain and Turkey as most vulnerable to the global financial crisis and falling house prices. DAVID YAFFE reports on the growing economic and political crisis of British capitalism.

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Britain’s economy heading for bankruptcy?

$14 trillion was wiped off global share values in 2008, a record yearly decline. The US Dow Jones lost nearly 35%. The main European stockmarkets performed even worse, with falls of more than 40%. London’s FTSE 100 lost 31.3% of its value, the largest annual decline since the index was created in 1985. The British government’s rescue plan for leading UK banks last October made little impression. In 2008 HBOS lost 90.4% of its value, Royal Bank of Scotland (RBS) 78% and Lloyds TSB 73%.

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The spectacle

the spectacle

Napoleon said he would give three regiments for a newspaper. What price would Tony Blair pay? Whatever was asked. Remarking on how the most modestly gifted might assume statesmanship, Baudelaire observed that ‘the supreme glory of Napoleon III will have been to prove that anybody can govern a great nation as soon as they have got control of the telegraph and national press’. Well, almost – don't forget the costume! ‘Fake it till you make it.’

World advertising expenditure is now over half the world expenditure on public education. The rate of growth of advertising spending far exceeds that on education: marketing works. It lures, seduces and we buy. And so this political process laughably called a democratic election is colonised by public relations’ agents, focus groups, sound bites – anything that fits on a t-shirt; the ever-optimistic, entertaining, smiling pose, the photo-opportunities, film sets and art of shop window dressing. A tale of two dummies and a political process without people. The electorate are passive observers and information flows one way – down to the consumers. Millions of pounds, miles of newsprint and screen hours are devoted to sustaining the myth of choice: gone are political meetings open to the public. Welcome to the sanitised, staged rally and woe betide the intruder.

Presented like reassuring memories of the authentic in this world of fakery and fraud are Major’s soapbox and Blair’s handwritten contract. Mocking parodies of things that were once real and, as such, suitable emblems for this deceit.

‘In the era of printing and parliamentarianism, it is impossible to gain the following of the masses without a widely ramified, systematically managed, well-equipped system of flattery, lies, fraud, juggling with fashionable and popular catchwords and promising all manner of reforms and blessings to workers right and left – as long as they renounce the struggle for the revolutionary overthrow of the bourgeoisie.’ (VI Lenin)