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WHAT THE PEOPLE CAN AND MUST DO ABOUT THE FINANCIAL AND ECONOMICCRISIS(Contribution to the Forum on the Global and Financial Crisison 30 January 2009 at De Balie, Amsterdam)By Prof. Jose Maria SisonChairperson, International Coordinating CommitteeInternational League of Peoples' Struggle
 It is of utmost importance for the working class and the rest of the people exploited by the system of monopoly capitalism to discuss and clarify to themselves what they can and must do about the currentgrave financial and economic crisis. They are necessarily concerned about being ceaselessly victimized bythe monopoly bourgeoisie, extending from the extraction of the surplus value in the process of productionto the complexities of capital over-accumulation and abuses of finance capital.In this connection, I wish to point out certain facts in order to show in a comprehensive and profound wayhow the current grave crisis has come about and how the working class and the rest of the people havebeen exploited and oppressed on a global scale, especially in the last three decades under the signboard of “neoliberal globalization”. Consequently, it becomes easier to discuss what the people can and must doabout the crisis in terms of raising their consciousness, organizing and mobilizing themselves for makingprotests and demands in order to bring about the necessary social change for the better.
I. Certain Facts About the Crisis
 We must counter the one-sided, narrow, fragmentary and shortsighted explanations of the crisis in the USand on a global scale. These have been made by the industrial and financial magnates, their politicalagents, their academics and publicists in order to obfuscate the origin and development of the crisis, tocontinue the misrepresentation of monopoly capitalism as “free market” capitalism, to continue makingthe most out of the mess in the system of greed and to confound and confuse the people.1. Whatever is the dominant policy stress of the imperialist state and the monopoly bourgeoisie, whetherthe policy is called Keynesian or neoliberal, it is in the very nature of monopoly capitalism to exploit andalienate the working class from what it produces, maximize the extraction of surplus value, raise theorganic composition of capital and accumulate and over accumulate both the productive and financecapital in the hands of the monopoly bourgeoisie, especially the financial oligarchy. Pressing down thewage level cuts down effective demand and results in the crisis of overproduction. Raising the organiccomposition of capital in order to increase productivity and competitiveness results in the tendency of theprofit rate to fall. The recurrent and worsening rounds of boom and bust and recessions have beentemporarily overcome by heavy doses of debt financing. The overall decline of US industrial productionsince the mid-1970s has been accompanied by an unprecedented financialization of he US economy. Butultimately the over accumulation of capital (especially through the overvaluing of assets, themultiplication and spiraling of derivatives and the generation of fictitious capital through unregulatedcredit expansion for the purpose of monopoly control and speculation) leads to the super-large financialand economic crisis, like the Great Depression and what now portends to be the Greater Depression.
 
2. The so-called neoliberal or “free market” policy stress has been significantly distinct from the previousso-called Keynesian policy stress a) in unbridling and letting loose the naked self-interest or greed of themonopoly bourgeoisie as the driving force of the economy ; b) in blaming as the cause of the problem of stagflation the rising wage level and social spending by the US government in the 1945-75 period, insteadof the recurrent crisis of overproduction, the over accumulation of capital and the demand-pull inflationaryeffect of military spending (the arms race, overseas deployment of US military forces and the wars inKorea and Indochina); c) in seeking to make more capital and profit-making opportunities available to themonopoly bourgeoisie through the denationalization of the neocolonial economies, privatization of publicassets, trade and investment liberalization and deregulation or removal of restraints on abusing theworking people, the environment and the financial system, and d) in accelerating the centralization andconcentration of capital (especially in the form of finance capital) in the US and a few other centers of global capitalism.3. The monopoly bourgeoisie in the US and other imperialist countries has successfully waged a classstruggle against the working class by using the imperialist state to attack the trade union and otherdemocratic rights, to press down wages and erode hard-won social benefits, cut back on social spendingand to deliver taxpayer money to the monopoly firms in the form of overpriced contracts in militaryproduction and continuous supply of fuel and other raw materials for strategic stockpiles, direct andindirect subsidies and insurance for overseas investments. At the productive base of society, the stateguarantees the legal property right of the monopoly bourgeoisie in order to maintain the exploitativerelations of production and provides the laws and coercive apparatuses to keep the working class undercontrol. Even as it misrepresents itself as “free market” capitalism, monopoly capitalism has always usedthe state for purposes of exploitation and oppression. As the partner of private monopoly capitalism, statemonopoly capitalism takes more forms than state ownership of enterprises, even as nationalization is aform that may become conspicuous in time of severe crisis.4. In accumulating and over accumulating capital, the US monopoly bourgeoisie has not been satisfiedwith the extraction of surplus value in the process of production, the privilege of tax cuts and grabbing of taxpayer money, access to the bank deposits and pension funds of the workers, expansion of credit andmoney supply in relation to deposits, the creation of derivatives that speculate on fluctuations in the stock,bond and currency markets and taking of superprofits on cheap commodities and debt service from theeconomic hinterland of the world. After inveigling millions of worker and middle class families to buyinto the “hightech bubble” in 1995-2000 and making them lose their savings, the US imperialist state andthe monopoly bourgeoisie drew the American households to the “housing bubble” from 2002 onwards atteaser interest rates at the beginning. This would promote an unprecedented level of consumerism basedon the artificially rising housing values and further consumer credit (in addition to housing equity loans,auto loans, credit cards and so on). The “housing bubble” complemented the so-called militaryKeynesianism of Bush, which pump primed the US military-industrial complex but not the entireeconomy in terms of increased demand, employment and production. The new bubble was one more and abigger device to fleece the American working class and ultimately to securitize debts, especially badmortgages, and generate the most arcane forms of derivatives, like the collateralized debt obligations,asset-backed securities, credit default swaps and structured investment vehicles.5. The imperialist state looks like it is violating its dogma of “free market” or “state non-intervention” inusing public funds to bail out the largest private banks, investment houses, mortgage companies, insurancecompanies and some key productive enterprises like the Big Three of US car production. But in the first
 
place, such a dogma is a slogan of pretence. It is completely untrue that the imperialist state is going“socialist” when it uses taxpayer money for private corporate bailouts. Forms of state monopolycapitalism should not be mistaken for socialism. In times of big crisis like the Great Depression and thecurrent grave crisis, the monopoly bourgeoisie deliberately avails of monopoly state capitalism to bail outthe distressed monopoly firms and to assist the stronger firms to absorb the failing firms. Bush, Bernankeof the Federal Reserve Board and Paulson of the US Treasury Department cooked up with their WallStreet confreres the scheme of bailing out the banks with taxpayer money to the flagrant detriment of Main Street.6. The purpose of the scheme is simply to pump prime the assets of the big banks and other financialcorporations , allow them to dump the toxic assets and hope in vain that they thaw out the credit freezeand resume lending operational capital to producer firms. But would such producer firms take furthercredit for production under the depressed conditions of the crisis of overproduction? The scheme is anti-worker, anti-people and anti-socialist. The imperialist state and the monopoly bourgeoisie are not asinterested in bailing out the workers from mass layoffs, home foreclosures, loss of pensions and othersocial benefits and other disasters as bailing out first the financial and industrial giants. Obama's so-calledstimulus package of USD 850 billion can provide temporary jobs only to a small part of the risingnumbers of unemployed. It is a poor afterthought in terms of tardiness and smallness in relation to thetrillions of dollars already deployed for the bailout of the financial giants since 2007. It is starkly clear thatthe bailout funds for the Big Three is anti-worker because it is preconditioned by the reduction of wagesand benefits for the workers.7. The highest US authorities in the outgoing and incoming administrations admit that the current financialand economic crisis will not blow away in one or two years. It can last for as long as ten years or evenmore. The gravity of the crisis can be deduced from the enormity and significance of the debts incurred bythe US government, the private corporations and the American households. All these debts are beyond thecapacity of the debtors to pay back. To collect the debt payments and/or write off the debts would deflateand further depress the economy. The US national debt has soared because of budgetary and trade deficits.The budgetary deficit involves a huge amount of debt service, the tax cuts for the corporations and thewealthy and heavy military spending. The trade deficit involves the outsourcing of consumer goods andthe decline of US manufacturing for export (except big industrial items and agricultural surpluses) sincethe 1970s. The use of US treasury bonds and taxpayer money to bail out the US financial and nonfinancialgiants aggravates the crisis. Not only the financial corporations are in trouble with huge amounts of badmortgages and other bad debts and worthless paper assets, the nonfinancial corporations are also in a bigfinancial mess as shares of stocks and corporate bonds lose their value and the loss of effective demandand lack of sufficient fiscal stimulus stagnate and depress industrial production, the basic service sectorand the real economy as a whole. The American households are losing jobs and homes by the millions andhave savings of close to zero.8. The current global financial and economic crisis has dramatically spread from the US to the rest of theworld for several reasons. The US is the center of the world capitalist system. It has imposed the policy of “neoliberal globalization” on its imperialist allies and the less developed countries. It has subordinatedveritably the whole world through bilateral and multilateral economic and trade relations and through itscontrol of the Group of 8, the OECD, IMF, World Bank, WTO and other international agencies. The US iswhere both productive and finance capital have been most concentrated. It is the principal destination of foreign direct investments. It has been described as the engine of global economic growth and the biggest
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