Inter-imperialist rivalry - A fight of hostile brothers

FRFI 172 April / May 2003

British armed forces have launched their twenty-ninth separate military intervention in the Middle East since the end of the Second World War. In five of the past nine decades the Royal Air Force has bombed Iraq. This repeated violence has been used to build and sustain British imperial power in the interests of British capitalism, often at the expense of other imperialist powers. The latest war on Iraq reveals and accelerates the tendency of imperialism towards inter-imperialist rivalry: the rivalry that brought two world wars. TREVOR RAYNE reports.

The obscenity of this war is demonstrated in the statistics: Iraq’s gross domestic product (GDP) is $15 billion. The US’s GDP is $10.2 trillion or about 700 times bigger than Iraq’s. The US’s military expenditure is almost $400 billion. Iraq’s military expenditure is $1.4 billion or 0.35% of the US’s.

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Adventures of Freddie and Fannie in the Land of Make-Believe

FRFI 204 August / September 2008

Who are Fannie and Freddie?
‘Freddie Mac’ and ‘Fannie Mae’ sound like they should be characters out of a children’s cartoon. In fact they’re the leading financial characters in an absurd capitalist farce that will end in tragedy for the poor of the US. Both are US ‘Government Sponsored Enterprises’ (GSEs), also known as ‘agencies’. Freddie is the ‘Federal Home Loan Mortgage Corporation’ and Fannie is the ‘Federal National Mortgage Association’. Fannie Mae was founded in 1938, as part of the ‘New Deal’ – the program of state intervention to help rescue US capitalism after the 1929 depression. In 1968, to help balance the budget, part of Fannie Mae was taken off the government’s balance sheet and privatized. Freddie Mac was established in 1970 as a private corporation with a public charter to provide competition with Fannie Mae.

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On the road to recession

The economic turmoil in the international credit markets is taking its toll on the British economy. Six months ago government ministers confidently told us that the British economy could withstand global turbulence, and in March the Chancellor Alistair Darling claimed that Britain is the ‘most stable’ economy in the G7 major capitalist countries. The payback for their wishful thinking was not long in coming. By mid-July the tune had to change and Darling was forced to admit that the economic downturn looked set to be more profound and longer lasting than initially expected. David Yaffe reports on the problems facing the British economy.

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Millions face fuel poverty as Labour backs energy giants

Millions of people will be forced into fuel poverty this winter in Britain as the price of electricity and gas soars. In 2008, every major energy supplier – EDF Energy, British Gas, E.On, Scottish Power, N Power and Scottish and Southern Energy – announced two separate price hikes averaging a total of 38%. At the beginning of 2008 the average annual household energy bill was around £900; now it will be of the order of £1,250 to £1,350 depending on the supplier. In 2002, the average bill was around £320. It will be the poorest sections of the working class who will be forced to pay the most for Britain’s economic crisis.

Fuel poverty, which is defined as spending more than a tenth of household income on energy, is not new. At the start of 2008, one in six households, 4.4 million people, were suffering from fuel poverty, already up from 3.5 million in 2006. The latest rises will bring the total to 5.5 million by the end of 2008, double the number in 2005, and representing a quarter of all households. According to Age Concern, pensioners will face bills averaging £1,262 – 19% of the income for a single pensioner on basic benefits and 12.5% for a couple. Families would have to pay an average bill of £1,340, 14% of the income for a lone parent family and 12% for a couple receiving basic state benefits. With a third of pensioners facing fuel poverty, the number dying from hypothermia this winter – 32,000 on average – is bound to increase as more and more are forced to choose between buying food and heating their homes.

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Senate passes Santa Act

Senate passes Santa Act update No 1
6 October 2008

This article is an update to 'Goodbye Wall Street' published in FRFI 205 October 2008

Last week the Handout Bill, sorry, the "2008 Emergency Economic Stabilization Bill", came back from the Senate decorated with so many ornaments that it looks like an overburdened Christmas tree. Not only was there the $700bn for the banks, there were a host of tax cuts for business: wooden arrow makers in Oregon, race track owners, Puerto Rican rum ... and on and on. All the candy sweetened the bill enough so that many objectors could swallow it.

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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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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.

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CAPITALISM IN CRISIS: Desperate times Desperate measures

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.’

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