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
THE WORLD 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
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
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
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
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
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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