Lenin explained many years ago the stage of capitalism where the big bankers eat up the smaller ones: Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed. (Lenin, Imperialism: The Highest Stage of Capitalism, 1916)
FACING WORST CRISIS SINCE GREAT DEPRESSION
U.S. capitalists caused the financial crisis they now seek to solve with drastic measures like the stalled $700-billion bank bailout. Over the past 30 years, they drove house prices sky-high and workers’ wages down, creating the conditions for subprime loans. Financiers got rich, for a while, by trading these worthless instruments as if they were pure gold. But that joy ride has ended and left U.S. banks in a deep hole. The staggering consequences include a $1.2 trillion New York Stock Exchange plunge on Sept. 29th amid a spate of bank failures. And U.S. bankers’ woes extend far beyond Wall Street.
The profit system ties a nation’s capacity to exploit foreign labor, markets, and raw materials by armed force to the strength of its financial institutions. The Council on Foreign Relations (CFR), U.S. imperialism’s leading think-tank, is worried. “The issue today is whether Wall Street turmoil will produce similar pressure for the United States to look inward—and indeed whether its capacity to sustain an international role may have been compromised” (CFR website 9/29/08).
To maintain their global dominance, U.S. bosses are undertaking an unprecedented restructuring of their troubled financial system. Wealth and power are concentrating more and more into a handful of megabanks like J.P. Morgan Chase, Citigroup, and BankAmerica. The bank bailout, a massive infusion of capital to such firms from a Treasury run by Wall Street stalwart [See box.] Henry Paulson, is part of the plan. The big money boys continue to fight for it despite its Sept. 29th rejection on Capitol Hill. They also call for stricter government regulation of markets.
Through these proposed new regulations and massive consolidation that will give the ruling class more direct control over the financial sytem than ever before, the major U.S. capitalists are advancing economic fascism.
RULERS WANT CONGRESS UNDER MILITARY DISCIPLINE
The bailout’s failure in Congress (which may prove temporary) highlights a major obstacle on the finance capitalists’ road to fascism and war. An inefficient political system, especially the House of Representatives, hinders actions they sorely need. With every house seat up for grabs in five weeks, most reps opportunistically pandered to their voting bases rather than support the bankers’ vastly unpopular bill.
U.S. rulers formed the Hart-Rudman (H-R) commission in 1999 to guarantee their world supremacy well into the 21st century. In 2001, it had proposed downgrading Congress’s cumbersome one-member-one vote rule in favor of a five person “leadership team” to “review the totality of Executive-Legislative relations.” It was to consist of “the Speaker of the House, the Majority and Minority leaders of the House, and the Majority and Minority leaders of the Senate” and consult directly with the “the President, the Vice President, the National Security Advisor, and senior cabinet officers.” Complaining of self-serving reps, Hart-Rudman said “Only by having the five most powerful members of the Congress directly involved is there any hope of real reform.” One “reform” was that “every member of Congress…participate in one or more war games per two-year cycle” at the National Defense University.
Bush dropped the ball after 9/11, implementing only one of H-R’s 50 provisions (Homeland Security). Expect more ruling-class calls to clean up Congress following the bailout debacle.
As for the White House, the rulers hope the presidential race will produce a protector of the U.S. empire far more capable than Bush. The CFR is “looking for signals from both campaigns on how Obama and McCain would restore the economy, and thus maintain the ability to project power abroad” (website, 9/26/08). But the Establishment’s New York Times (9/30/08) laments, “Senator John McCain and Senator Barack Obama were far from Washington, bit actors at best in helping to resolve a crisis that one of them will inherit.”
As this economic tsunami is hitting U.S. bosses harder than any other imperialist, the constant allusions in the media to the 1930s are telling. U.S. rulers long for a Roosevelt-style president who can implement the economic discipline they need before they can mobilize to confront rivals like China and Russia militarily. Over the course of a decade of far-reaching economic programs, FDR was able to raise taxes on the ruling class to pay for the consolidation and militarization of U.S. capitalism in preparation for WW II. So we can expect more drastic finance-capital sourced initiatives, like the bailout, under the next administration.
The ruling class, in the midst of a crisis, looks for opportunities to prepare for future conflict. For workers, the financial mess shows voting is a dead end. Obama and McCain are in fact competing to see who can best serve the most powerful camp of war-hungry bankers. We have to take advantage of every opportunity to expose the failure of capitalism and build confidence in our class and our Party as the future of humanity. Investing time and effort in building the revolutionary, communist Progressive Labor Party represents a far better “growth strategy” for our class. Financial disasters and wars are built into the profit system. It will take a long time to get rid of it. But efforts today will reward generations to come.