10-01-08, 9:17 am
Original source: The Guardian (Australia)
On many occasions PM Kevin Rudd and Treasurer Wayne Swan have told the Australian people that the Australian economy is sound — better than other similar countries in the world. But recent measures by the government, particularly the proposed bail out of small financial institutions to the tune of $4 billion, is an indication that perhaps all is not as well as they make out.
US President George W Bush took the same tack a couple of months ago. He told a press conference at that time: 'I think the system basically is sound, I truly do … the economy is growing, productivity is high, trade’s up, people are working. It’s not as good as we would like, but to the extent that we find weaknesses, we’ll move … We’re not afraid to make tough decisions.'
But the tune changed within two months as Bush attempted to stampede his $US700 billion rescue of the corporate big boys through Congress. At the end of September he declared that 'The government’s top economic experts warn that without immediate action by Congress, America could slip into a financial panic … more banks could fail, … the stock market would drop even more, which would reduce the value of your retirement account.
'The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs.'
To meet this threatening situation Bush has proposed what amounts to the biggest theft of taxpayers’ money in all history. No other government has ever attempted such open robbery.
It is a familiar Bush tactic — inducing panic which rules out any option other than that proposed by the Bush administration: the bombing of the World Trade Centre, the deliberate lies about weapons of mass destruction in Iraq to justify the war against Iraq, the nebulous 'war against terror' and now this near hysterical panic over the US economic situation with a solution that would pour billions of dollars into the pockets of the banks and finance corporations responsible for the mess while forcing the entirely innocent taxpayers to foot the bill.
The Australian government has supported Bush’s plan and has clearly indicated that it is prepared to do the same thing here if the economic situation should continue to deteriorate as seems likely.
The detail of how the $4 billion hand out of taxpayers’ money to the smaller finance institutions is to be made is not yet clear. It is said to provide these companies with additional loan money. Who will actually get the money; how is it to be used; how will it help potential home owners; is it to be repaid to the Treasurer over time?
There is no talk of aid to the large number of families in Western Sydney receiving assistance to meet their mortgage repayments no more than Bush gave a thought to the consequences of his package on American borrowers.
What is going to be done by the government to reign in what the Australian Financial Review (26/9/08) describes as the 'Predatory lending practices and a decline in loan standards [which] have pushed up the number of home loan arrears'?
Yet another sign of the gathering financial crisis is the dramatic losses on superannuation investments and share portfolios even if no institutions actually fail. Of course superannuation is also workers’ money. Workers have been forced to pay sizeable amounts of what should be take-home pay into superannuation funds. Much of this money is invested in stocks and shares and speculative investments by financial advisers tied to the financial institutions.
These measures and others which are certain to arise as the financial crisis deepens, are all about bailing out the capitalist system at the expense of the working people.
Should the various 'packages' go through even with compromises but without a change of policy direction and priorities they can only be regarded as yet new examples of the financial class winning yet another battle in its long war against the producing class. The banks might be saved but the people ruined.
