As the United States housing market suffers its biggest slump since the 1930s, with record defaults on over 200 million mortgages, banks and financial institutions worldwide are losing billions of pounds. The era of easy credit is coming to an end and the effects are being felt all over the world. Ten years of economic “growth” in the UK under “New” Labour (thanks to cheap Chinese imports) is beginning to unravel.
WHO IS TO BLAME AND WHO WILL PAY?
Corporate greed is to blame, and working class people like me and you will pay twice over. Global capitalism needs ever-increasing profits to meet the demands (greed) of shareholders. Capitalism does not care how profits are made. Jobs are axed and the environment destroyed in the relentless bid to make money. Growth through greed is the name of the capitalist game and exploitation is the norm. So as the banks are bailed out with our money and the bankers allowed to walk away with large pay outs – Andy Hornby, former director of bankrupt HBOS has just trousered £1 million – ordinary people are left to carry the can. Wages and state benefits have been squeezed and kept to a minimum while corporations make record profits. At the same time, “easy credit” has been made widely available. This has resulted in record borrowing, just in order for us to be able to purchase the services and goods produced.
Profits were thus maintained: banks & building societies made a fortune on monies loaned, while customers were lured into debt, often borrowed with their homes as security. Capitalism is based on such exploitation and with the credit crunch it’s us who will suffer further. Successive governments have given the business elite free rein which has resulted in:
- Workers wages being driven down, e.g. we are told to accept pay “rises” of 2% whilst directors’ salaries soar.
- A credit boom which has masked the precarious state of the UK economy, built on borrowing and debt.
This is now over. The unavoidable “slump” in the capitalist system has arrived. Easy credit disappears and we have a crisis where a greater slice of people’s income goes on paying off debts. The demand for goods and services will therefore fall. We will inevitably experience the usual “tough love” from the government and bosses:
- Debtors will be allowed to go bankrupt.
- People will lose their homes. Repossessions in Wales are up by a staggering 39% since last year.
- Companies will lay-off workers to maintain profits and corporate greed. Only last month 150 call centre workers in Swansea lost their jobs when XL Airlines went bust – no million pound payoffs for them.
- Rising unemployment as production is cutback, factories closed or relocated.
- Prices will increase. Note the rises in our weekly shop, fuel bills & petrol.
- Poverty, social deprivation and crime rates will rise.
- The British National Party (BNP) will seek political gain by scapegoating our ethnic minorities for causing the problem.
SO WHAT CAN WE DO?
Do we just accept the dictatorial power of a corporate elite, their politician chums and their unjust capitalist system, or do we fight back? Do we demand and strive for an economic system based on fairness and equality, where exploitation is a thing of the past? Where goods and services are produced for need not greed within a truly sustainable green libertarian socialist/anarchist economic system? The choice is yours.
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