of the United States, Britain and most of the
western world are still reacting day by day to new manifestations of
the great financial crisis that has global imperialism in its grip.
Meanwhile carefully thought-out emergency rescue packages threaten to
come undone a few days after they were thought to be sorted and sealed.
After Monday’s vote in the US Congress, rejecting the $700
billion bail out for Wall Street, no one is sure what will happen next,
least of all the media’s finance experts and advisers, who now have
less credibility than tabloid newspaper astrologers.
The bail-out package, slightly revamped to give the American
taxpayer’s a little more protection, is being presented again, first to
the Senate and then to Congress. It is expected to pass but no one is
taking it for granted that it will. The Congress men and women face an
election soon and they are very sensitive to the feelings of American
voters right now and the bailout package is very unpopular.
Most of the American people are currently feeling very angry and
betrayed by the collapse of finance giants they had believed to be
immortal. The crash they had been told was impossible is happening and
their faith in capitalism is shaken.
They certainly do not want billions of their dollars going to the
bankers they believe have been irresponsible and should be punished.
Nearly 300 years ago in London, Parliament voted that the
profiteering speculators responsible for the inflation and collapse of
the South Sea Bubble, in which hundreds of investors lost fortunes,
should be sewn into a weighted sack and thrown in the Thames. The
American people are currently feeling much the same about their
Now in Britain most people are more resigned and cynical, but
those who have savings can still get panicky.
On Wednesday Prime Minister Gordon Brown had to intervene to calm
rumours that the Lloyds TSB takeover of HBOS was unravelling after the
value of HBOS had fallen so low it was assumed Lloyds TSB would want to
renegotiate the deal.
HBOS shares fell nearly 14 per cent on Tuesday but rose by 21 per
cent on Wednesday when Lloyds TSB confirmed the deal was still going
ahead, even though the shares are still worth less than when the deal
was first agreed, just two weeks ago.
Brown backed the Lloyds TSB-HBOS deal by waiving all the
“competition” legislation, designed to prevent the monopolisation
process. So much for capitalism’s puny efforts at self-regulation –
blown out of the water as soon as a crisis hits!
Meanwhile there are reports that savers in Britain are withdrawing
their money and moving it to banks considered safer:
Northern Rock (nationalised last spring), the Post Office savings
scheme and National Savings.
This movement of millions of pounds of savings is also having a
destabilising effect on banks.
The Government has raised its guarantee to depositors that if their
bank fails they will now get up to £50,000 back, up from the
£35,000 guarantee it pledged when it took over Northern Rock.
The Irish government has upset the apple cart by pledging to
cover 100 per cent of all depositors’ money in Irish banks. The
European Union is concerned that this will attract savings now lodged
in other banks, undermining them.
And some Irish TD’s (MPs) are alarmed that their government has
pledged a sum that could be two or three times the country’s Gross
France is considering its own multi-billion euro bail out plan
while others are debating an EU-wide plan.
And even if the $700 billion US bail out package does win
Congress and Senate support this time, no one is certain whether it is
enough and in time to prevent more collapses.
If it does not get through, American capitalism may cease to be a
power in the world but the American workers will pay a heavy price in
unemployment, homelessness and poverty for their bosses’ mistakes.
Many are already saying they would sooner the money went into
social welfare, healthcare, education and homes. They have been taught
to see socialism as the enemy; now they may be ready to change their