From the Editors: Ten Years After the Financial Meltdown
Recently much is being written about the ten-year anniversary of the financial meltdown, commonly referred to as the Great Recession of 2007-2009. Most of what is being written defines the Great Recession as the financial crisis caused by the collapse of the U.S. real-estate market related to U.S. sub-prime mortgage defaults. However, this was a feature, not the cause. The electronic revolution that is generating laborless production was the underlying cause of the financial crisis. Since the 1990s, this revolution in production led to the rise and dominance of speculative capital in the U.S. and the world economy.
Banks and financial institutions curtailed productive capital investments and invested in speculative transactions instead. When less money is to be made in the production of commodities for exchange, then capitalists seek to move money around, making money from money. In the years just prior to the 2008 financial meltdown, speculative capitalists were making record amounts of money by amassing and trading vast sums of debt based in home mortgage real estate holdings, particularly sub-prime home mortgages that began to default in large numbers. With the September 2008 bankruptcy filing of Lehman Brothers, the fourth-largest investment bank in the U.S., the speculative debt bubble burst into a global financial crisis.
In November 2009, Ben Bernanke, chair of the U.S. Federal Reserve, declared “September and October 2008 was the worst financial crisis in global history, including the Great Depression.” In the months and years that followed, millions of once stably employed workers from all sectors of the economy suddenly found themselves jobless. Millions lost their life savings and retirement savings. By 2014, some 9 million families had lost their homes. Over the same period, the U.S. Department of the Treasury and the U.S. Federal Reserve Bank provided trillions of dollars to bail out U.S. banks and banks around the globe.
Contrary to current government proclamations that U.S. unemployment levels are the lowest in 50 years, the results of the last financial crisis are still with us. Millions of workers who lost everything during the crisis and in its aftermath have not recovered. Tens of millions more are without stable full-time employment, working at part-time, temporary and contingent jobs. Tens of millions remain unemployed. Once they are armed with class identity and a vision of what kind of abundance the new technology makes possible, these tens of millions of workers fighting to secure the necessities of life can move as a revolutionary force necessary to transform society for the benefit of all. These are revolutionary times.
The ruling class is well aware that we live in revolutionary times, and as the results of the mid-term elections show, it is moving quickly to ideologically divide the workers. The elections clearly revealed that the process of political polarization is intensifying. At one pole a movement is arising to fight for the necessities of life and for democracy. Opposing it is its polar opposite: the rise of fascism.
As a new economic crisis looms on the horizon, one that promises to be worse than the last, the tasks of revolutionaries have become urgent. The exponential advancements in new electronic technology is producing an abundance of the necessities of life. The struggle today is about ownership and distribution of that abundance. A section of the working class that is struggling for these necessities of life must be won over to the new ideas based on this reality.
All of the economic indicators show that speculation continues to be the main driver of the U.S. and global economy and that debt has reached new historic highs. The U.S. fiscal 2018 budget deficit stands at $779 billion, 17% higher than last year. U. S. household debt has now surpassed its 2008 peak. Unpaid student loan debt that in 2008 was $611 billion has ballooned to $1.5 trillion today. Auto loan balances sit at $1.5 trillion today, far above their 2008 peak. Global debt has soared from $177 trillion in 2008 to $247 trillion today. The ruling class is well aware of the dangers the situation presents for them. JPMorgan Chase in its September 2018 report, “10 Years After the Financial Crisis,” is just one of the many financial institutions and think tanks warning about the consequences of an impending economic crisis that will accelerate the social and political polarization around the world.
Today, how will conscious revolutionaries help to forge class unity among a section of our class in order to develop independent class interests when the next social outbreak occurs? The struggle for the distribution of the necessities of life is the struggle for distribution according to need. The struggle for distribution according to need is the struggle for ownership of the necessities of life. The struggle for ownership of the necessities of life is a class struggle. The class struggle is the fight against fascism and for a new society based on cooperation, common ownership and distribution according to need. The class struggle is a conscious struggle. There is no middle ground.
November.December 2018 Vol28.Ed6
This article originated in Rally, Comrades!
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The age-old vision of a world without scarcity, without exploitation, class domination, organized violence, and stultifying labor has been the dream of millenia. The new completely socialized labor-eliminating means of production ... sets the basis for its realization. Now human history can begin, the light of the individual shining in the full brightness of liberated life, that can only be realized within true equality and cooperation: communism, a cooperative society.'Without Vision, the People Perish'
Rally, Comrades ! May/June 2011