03) RESPONDING TO THE MELTDOWN

(The following article is from the October 16-31, 2008, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

People's Voice Editorial, Oct. 16-31, 2008

As this issue goes to press, capitalist spin doctors and politicians are hailing the latest victory over the crisis gripping world financial markets. Indeed, after the European "bailouts" announced over the Oct. 11-12 weekend, stock prices rebounded as the week began. But the Dow Jones was soon wafting downward, putting a damper on premature celebrations.

     Sober-minded economists note that since the sub-prime mortgage crisis began, successive "rescues" have grown ever larger, but also much shorter. The $700 billion package adopted by U.S. lawmakers in early October was followed by the worst week in Wall Street history. The European intervention might provide temporary stability to the markets. Or maybe not; some investors warn that stock markets have yet to hit bottom. Either way, most realistic analysts predict the most severe slump in decades.

     Present-day capitalism has been buoyed by a series of "bubbles," fantastic over-valuations of assets which inevitably collapse. Now we are paying the price, and the declines in housing values or pension funds will not reverse anytime soon. Millions of North American homeowners and seniors are worth much less than they believed a few months ago. Already saddled with historic levels of consumer debt, working people face rising unemployment and shrinking possibilities to meet their mortgages and credit card payments. Some bourgeois economists even admit that the Marxists were right: the ability of capitalism to produce commodities has far outstripped the purchasing power of the highly exploited working class, sparking the recent meltdown.

     Unfortunately, those who hope that capitalism will magically disappear in a puff of smoke are wrong. It's true that the system is in deep trouble, but it will take huge popular struggles to defeat attempts by the ruling class to make working people pay the full cost of this crisis, and then to wrest power from the corporate elite. All the more reason for the labour and people's movements to step up the fightback now, instead of waiting while things get much worse.