The New Worker

The Weekly paper of the New Communist Party of Britain

Week commencing 21st March 2008

Stop the War march in London

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by Daphne Liddle

of high finance rocked and reeled last week after Bear Stearns, one of America’s biggest investment banks, collapsed and was bought out by rival JP Morgan for $2-a-share – shares that had been valued at $62 a few days before and over $150 a few months ago.

 Once again the sub-prime lending crisis was at the root of the crash, with the epidemic of foreclosures of mortgages spreading from working class borrowers to the middle classes.

 Across the United States people who a few months ago felt safe and secure in their homes and jobs can no longer keep up with rising debt payments, are losing their homes and being forced to join the growing tent cities that are springing up outside major American cities. For them the American dream has turned into a living nightmare.

 The collapse of Bear Sterns sent shock waves around the stock markets of the world, wiping billions off of stocks and shares. The FTSE 100 top shares index fell more than 200 points – around four per cent of the total. The Japanese Nikkei fell 3.7 per cent, the German Dax 4.2 per cent and the French CAC 3.5 per cent.

 Investors around the world were mainly dumping shares in banks; in Britain the Royal Bank of Scotland shares fell 8.7 per cent, Barclay’s lost 9.4 per cent and HSBC nearly 13 per cent.

 The dollar fell to a record low against the euro and the pound also fell. American tourists in Europe complained that no one would take their worthless dollars any more.

 The US and British governments, who have vaunted their belief in the power of the free market, unchecked capitalism and derided state intervention in the market as backdoor socialism, suddenly started intervening like mad.

 The US Federal Reserve cut interest rates by three-quarters of a per cent – the second cut within a few weeks and the sixth cut since last summer and urged other governments to follow suit.

 In London the Government put up some £10 billion to underwrite banking debts – this on top of the billions it has already pledged to bail out Northern Rock, which it eventually had to nationalise to save it from collapse.

 And in Washington they wheeled out fading President Bush to make a reassuring speech, which basically boiled down to: “Don’t panic!”

 These measures were less than the banks had been asking for, but by Tuesday they seemed to have done the trick. Stock markets around the world rose again, dramatically, recovering nearly all of what had been lost.

Wednesday they started tumbling again and there were accusations that some traders were not playing by the book but were deliberately circulating false rumours that certain banks were in trouble in order to make profits from sharply falling and rising shares. Police investigations were threatened.

 By midday the Bank of England’s Monetary Policy Committee had met and voted by seven to two not to cut interest rates because of fears of inflation. Rates had already been cut from 5.5 to 5.25 per cent in February.

 The capitalists are in an impossible position. If they cut interest rates it will allow some people to borrow and spend and keep the markets active. But that will quickly add to the already huge personal debt problem, with its long hours culture leading to exhausted, stressed and burnt out workers – who will collapse economically, physically and mentally – and be unable to repay the debts.

 That will lead to more foreclosures and repossessions and falling property prices – digging capitalism into a deeper hole.

 If the capitalists raise interest rates fewer people will be able to buy, leading to a drying up of markets. Debt repayments will rise, driving more workers over the edge into collapse. Again, property prices will tumble.

The newspapers are full of finance pundits saying they can’t understand how this is happening, what has caused it all and what can be done about it.

 Karl Marx, who died exactly 125 years ago this week, explained it all perfectly clearly and showed that capitalism is inherently unstable. Booms and busts are inevitable.

 The capitalists have staved off recession for a couple of decades now on the basis of promoting personal debt, getting workers to spend their future earnings to keep the markets going. But this had to crash in the end.

 The capitalists will lose the value of their property, their stocks and their shares. The workers will lose their jobs, their homes and in some cases their minds. They will also lose all illusions about the capitalist system. Our job is to help them rediscover their fighting spirit.



The Dalai Lama plays his cards

IN LONDON Tibetan exiles and their dupes have been demonstrating outside the Chinese embassy in support of the separatist gangs that plunged parts of the Tibetan capital into violence last weekend. There can be no doubt that the London protests and similar demonstrations taking place across the world  have been organised by the Dalai Lama clique and his “Free Tibet” movement and there are ample facts and plenty of evidence to prove that the recent riot in Lhasa was organised, premeditated, masterminded and incited by the Dalai Lama clique.

Tibet became part of China in the 13th century and this was recognised by all the local Tibetan feudal leaders down the ages, including the current Dalai Lama, Tenzin Gyatso. This was recognised by the Dalai Lama after China’s liberation and the establishment of the people’s republic in 1949. But in 1959 the feudal landlords and reactionary religious leaders fearful of democratic reforms launched an armed rebellion, backed by the CIA and India, to preserve the serf system. It was crushed and the “god-king” of Tibet fled to India where he still holds court in exile.

The Tibetan people swept the reactionaries and feudalists aside and established a people’s government in Tibet. The million serfs and slaves stood up for themselves, no longer the property of their masters to be traded, transferred or used to pay a debt in kind or by labour.

But in India the Dalai Lama clique has constantly sought to sabotage and disrupt the forward march of the Tibet Autonomous Region. The Dalai Lama wants his throne back and the reactionaries want to restore the wretched feudal system that held the Tibetan people in thrall for centuries. Behind them are the sinister forces of imperialism working to undermine and destabilise the People’s Republic of China, the economic giant of Asia.

The Dalai Lama is a hypocrite who claims he stands for the Buddhist teachings of peace and harmony. Last weekend’s violence, led by his agents, has torn the mask from his face. But the days of serfdom and slavery are long gone in China and they will never come back. We stand with the Chinese and Tibetan people defending their people’s government.

The capitalist crisis deepens

ANOTHER investment bank bit the dust last weekend. Shares prices tumbled across the world as the capitalists sold stock to cover themselves following the crash of Bear Steams, one of the largest investment banks in the world.   The US central bank, the Federal Reserve, staved off the collapse of Bear Stearns by providing $30 billion in emergency support – the first government-led bail-out since the Great Slump of 1929 — and supporting a bargain-price buy-out by JP Morgan Chase by lending them $30 billion to guarantee some of Bear Stearns mortgage investments.

The bubble-economy based on private housing is about to burst and global recession is looming. Some individual exploiters will go under but the burden of the crisis will be placed on the back of working people. We’ll be told it’s the fault of the unions for pushing up wages. We’ll be expected to pay for the slump in pay cuts, lost jobs and slashed social services.   
The entire wealth of the planet is produced by workers in factories and farmers in the fields. Our labour provides the wealth that enables a tiny fraction of the population – the industrialists, capitalists and land-owners – to live in ease and luxury. Our labour feeds them while only a tiny fraction of the wealth we produce is returned in wages to ensure that the work gets done.

The ruling class, as a whole, expect to carry on as if nothing has happened. As long as they’re in control they will. The only way out of the capitalist crisis is to end the capitalist system itself.

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