Aug 3, 2009
President Obama, Fed Reserve Chairman Bernanke, and Treasury Secretary Geithner have been pumping “good news” into the media – and the media repeat the view that the economic crisis is nearly over.
False! The people spouting this feel-good message are the very same people who didn’t foresee the financial collapse yesterday before it happened. So why should we believe them today, when our future is at stake?
Not only is the current catastrophe still developing, in certain ways, it is getting worse.
One of the causes of the present crisis was the massive amount of bad debt on the banks’ balance sheets.
Most of that debt is still there. But, by a change in government accounting rules, the banks were allowed to hide their bad debts.
That sleight of hand allowed the banks to pretend to be profitable, awarding even bigger bonuses to executives than before.
The banks didn’t make money – they got money from the government’s purse.
That monstrous government bailout of the banks, amounting to more than three trillion dollars already, with many more trillions promised, did not act as a spark to start up the economy’s engine again. The banks did not use it to fund new production or construction. They used it to speculate. We are already seeing the results of that speculation – in the gyrating oil prices, among other things.
And that means sooner or later another bank will be caught out short and will go bankrupt, setting in train more failures. What will happen then? Who will bail the banks out next time?
Today no government in the world, not even the U.S. government, has the same room for maneuver as it had last fall.
The U.S. Treasury may decide to run the printing presses flat out, churning out bundles of paper to cover its deficits – it already is. But those paper dollars just accumulate around the world, pushing down the dollar’s value to others.
The whole world’s economy is at the mercy of unscrupulous wheeler-dealers, whose actions are in keeping with the morality of capitalism: always make more profit, by whatever means!
Their actions have already created a disaster for the world’s people.
Markets are shrinking, production is being cut back, massive numbers continue to be laid off. Unemployment is increasing in a spectacular way in all the big capitalist countries: the U.S., Britain, France, Spain.
And every layoff only weighs further on the economy, producing still more layoffs. Without a job, who can buy anything?
To make matters far worse, governments around the world are restricting public expenditures – in order to direct all that money to the banks and capitalist businesses.
The Obama administration may pretend that it is putting money into public services – the fact that every state in the country has a serious budget crisis shows what a joke that is. The federal government has cut back seriously on the money sent to states and cities, further aggravating their budget problems – which they themselves cause by giving tax breaks to business. Public services are reduced, jobs are cut – adding further to the downturn.
The crisis has NOT ended. In the months to come its effects will only be worse, extensively damaging the standard of living of workers around the entire world, sowing misery and despair everywhere!
Workers have only one way to get out of this disastrous trap: Mobilize, constitute themselves as a force capable of opposing the program of the capitalists and their governments, imposing their own solutions to the crisis.