The following statement has been issued by the Central Secretariat of the Communist Mazdoor Kissaan Party Pakistan (Communist Workers Peasants Party – CMKP) on the US Financial Crisis.
The post-Cold War’s much trumpeted force of deregulated economy that was made an article of faith in monopoly-dominated new breed of capitalism has virtually fallen flat on its nose to the surprise of many chanting the mantra of this hue of economy. More amazing is its reversal of gear requesting the government’s intervention to rescue the financial and mortgage markets at the Wall Street through the government’s monetary assistance. The federal government led by President George W. Bush of the Republican Party, which strongly believes in free market economy immune from government’s regulation has, changed its clout and is busy in providing 700 billion US dollars to the collapsed giant financial companies.
This is the second major financial meltdown of the United States after the Great Economic Depression of 1933, despite being a wealthiest capitalist nation in the imperialist bloc. Commentators and analysts are discussing and focusing on the technical aspects of the financial institutions, but they ignore the fact that the higher stage of capitalist economy turns into bubble thanks to speculation, manipulation and deception in the hub of economic activities both in commercial and financial trading. Such economic bubble has once again burst with a big bang making the concerned traders paralyzed.
Since immoral deceit is the rule of the game prompted by the greed to pile up profit, uncertainty in the market remains a regular feature in the market, especially in the Stock as well as financial and mortgage markets, . It is no wonder that the America has been hit hard by the present serious crisis, as such nightmare is an inherent part of the fabulous dream of capitalism for the profit of some individuals at the cost of people directly or indirectly. But the main thing of this situation is to underline the dark aspect of the gospel of miracle of deregulated and competitive market economy. It causes circasm on the part of “Holy Warriors” of the deregulated economy. It is an irony that they and their supporters find no option other than the bailout through the financial help of the government.
The Bush administration, the strong protagonist of the deregulated economy, has all of a sudden made a new shift in its stance like the lizard that goes on changing its colours to deceive others. It has come out to salvage sank financial and mortgage markets, with the magic of $ 700 billion which, according to American economists, would not work. Even one trillion (one thousand billion) dollars are insufficient to revive the collapsed financial and mortgage companies. If one trillion dollars are provided to them, every citizen, including children, will have to bear the brunt for paying 3000 dollars each. Where from the Bush administration would generate this amount to help the bankrupt companies? 700 billion or one trillion US dollars are the tax money earned from the people. The burdens of commercial, industrial and service sector taxes are put on the shoulders of consumers indirectly by raising the prices of consumer goods and services.
Where is the magic of free economy that was projected as the Messiah of all ills. This unfolds the element of American state, the prime duty of which is to ensure and look after the supreme interests of private ownership, particularly the cartels which actually dominate, dictate politics and economy. .
The mother of all evils is essentially the devilish character of individual property in any form and manifestation. The current crisis what the United States of America, at the zenith of its economic power, actually encompasses the fallout of capitalism which is breathing in intensive care unit (ICU), getting oxygen from the massive neo-colonial loot and plunder of the developing nations in Third World. Capitalism’s clinical death already took place more than a century ago. Wars, recession, inflation and severe economic crisis all over the globe are related to this phenomenon. And it will continue to haunt the mankind until the monster of capitalist economy is eliminated through the collective wisdom and power of the working class of the world at large.
Meanwhile, the myth of the Democratic Party’s claim for good governance and welfare of the American people, rejecting the only interests of the business, has exploded when a slight numerical majority of the Democrats in the US House of Representatives voted for bailing out financial markets through the $700 billon package. As it is said the taste of pudding is in eating, the Democrats have unmasked themselves before the American people that they (Democrats) have nothing against supreme interests of the American monopolies and their (Democrats’) clout for the “people’s cause” is a misnomer.
According to reports, there is a move in the United States to nationalize a or two private commercial banks which have become bankrupt due to unfair banking practices. This negates the US ”solemn pledge” to preserve the sanctity of private ownership. Another American hypocrisy is its intense pressure on the developing countries, including Pakistan, to privatise the industrial, commercial, service units in the public sector.
Incoherent, incompetent capitalist system, jumping to and fro, could be gauged from the fact that when in 1933 crash shattered the financial market, the US had no option other than enacting the Glass-Steagall Act to overcome the malaise. This Act was put into action to separate the functioning of commercial rules from Stock brokerage companies, thus regulating the trading of the financial leverage, including banks and brokers for mortgage trading similar to Stocks and bonds. But this regulated economy was reversed during the Carter administration, giving free hand to the economy for its unilateral goal, with the contempt against government regulation. In the 1990 the American banks maneuvered for hedging their loan risks. The devise was called Credit Default Swap (CDS), through which insurance contract for protection between buyer and seller was brought in. Now, the free American economy wheels find roadblock, needing the government’s intervention and monetary support through legislation after about three decades. Capitalism is based on the hallucination of its best system for ever contrary to the law of development and its ugly fact of brutality and uncertainty.
A lot of so-called liberal economists and new converts of capitalism from yesteryears’ socialism, who have been immune from having the rationale of law of socio-economic development in the backdrop of contradictions, are beating the drum that capitalism, especially American economy, has the resilience to overcome the odds. They also lack the grasp what price the developing countries pay to energise the imperialist economy. Reduction in the prices of the farmer’s raw materials, semi and even their value-added goods for exports, and on the contrary, the enhanced prices of industrial raw materials and manufactured goods of the imperialist countries are the temporary remedy of their decease-ridden economy causing one financial crisis after another nature. Fluctuation in international oil prices, rise in the export of food commodities of the Western countries, side by side with the reduced values of the currencies of the developing widening deficit on their balance of payment in foreign trade help overcome the former’ economy. This partakes of the nature of resilience of the imperialist economies at micro level, while other details bring the facts to the fore at macro level. Their business interests even have crossed the national boundaries and are operating globally by hoodwinking the overseas ruling oligarchy elite and finally making them subservient to their (cartels’), ploy through carrot and stick policy.