Thursday 17 April 2008

Read this! Excellent analysis of the global financial crisis

For an understanding of the global financial crisis and US imperialism Raymond Lotta's article provides plenty of insight. It's long, but very well written. The system is indeed mad, as Lotta convincingly shows us. And it's clear that the corporate imperialists will only "save" the system by destroying the rest of us. While Lotta's analysis focuses on the barbarism of capitalism, it's the mass grassroots struggles around the world which offer hope. The Venezuelan Revolution is one such beacon. There are lessons to be learnt from the revolutionary process in Venezuela that can help us here in Aotearoa. On the UNITYblog sidebar are a number of good articles looking at the exciting things happening in Venezuela. SW-NZ has argued that the Venezuelan Revolution, in the context of global economic, ecological and political crisis and intensifying inter-imperialist rivalry, can play a hugely important role in inspiring people around the world, but can also bring people and movements together. (See Organising to build a global broad left movement, 17.11.07). Nothing less than a global movement of the world's grassroots majority will be capable of bringing justice and sanity to the world. Financial Meltdown & the Madness of Imperialism by Raymond Lotta from 16 April, 2008 “The past 10 days will be remembered as the time the U.S. government discarded a half-century of rules to save American financial capitalism from collapse.” - David Wessel, economics editor, Wall Street Journal, March 27, 2008. “Be greedy when others are fearful.” - Warren Buffet, leading investment capitalist, quoted by The Economist, April 5, 2008 “[To the possessor of money capital] the process of production appears merely as an unavoidable intermediate link, as a necessary evil for the sake of money-making. All nations with a capitalist mode of production are therefore seized periodically by a feverish attempt to make money without the intervention of the process of production.” - Karl Marx, Capital, Volume II, ‘The Circuit of Money Capital’ The U.S. economy is experiencing the most wrenching financial turmoil since the Great Depression of the 1930s. Global markets have been reeling – as massive loans have turned bad, speculative bubbles have popped, and giant financial institutions have tottered. Financial turbulence originating in the U.S. has slowly expanded and worsened. There is now a global credit crisis. Banks and financial institutions are weighed down by huge losses caused by “non-performing loans.” Lending channels are choked up, as lenders are being called to pay back their loans, to clean up their balance sheets, and fearful that they are “throwing good money after bad” and won’t be paid back. There is real danger of a breakdown of the financial system. The new president of the International Monetary Fund has stated that the current turmoil poses the greatest financial crisis since the 1930s.1 The U.S. has been at the center of what is now a global financial storm. Bear Stearns, one of the largest and oldest investment banks in the U.S., collapsed in mid-March. The Federal Reserve Bank – which regulates and lubricates the U.S. banking system, and which also plays a special role in the world capitalist economy – has stepped in on an unprecedented scale. Continue

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