Green Left Weekly's $250,000 Fighting Fund: Can 'tough love' save capitalism?

Issue 

Prime Minister Kevin Rudd likes to give the impression that he takes his mission very seriously.

What mission? The mission: to once again "save capitalism from itself", as he proclaimed in his essay, which appeared in the February 2009 issue of The Monthly.

Over the last few months we've witnessed Rudd march in step with US President Barack Obama in the campaign to save capitalism from itself.

Both have thrown heaps of money to the capitalists, especially to the banks. At the same time, these politicians have begun to prepare working people for the "inevitable" sacrifices they will have to make to pay for Operation Rescue Global Capitalism.

"Yeah, excellent marking by Kevin07", observed a mate who works in my favourite coffee shop. Switching deftly from the sporting metaphor, he added: "Who says whiteman can't dance?" (The challenge of imagining Rudd and Obama as soul brothers on the dance floor was too much... but he had a point.)

But then this week, Rudd broke step from his bro, Obama, abandoning soul dancing for a dance-style more like Peter Garrett in his Midnight Oil days.

According to a report in The Australian, in his March 3 speech to the Australian Chamber of Commerce and Industry, Rudd argued that "unviable" overseas banks should be allowed to collapse so that an estimated $US3.6 trillion of "toxic assets" (bad debts) can be "cleansed" from the global financial system.

"Keeping insolvent banks alive is itself systematically damaging. All toxic assets on bank balance sheets must be neutralised", said Rudd.

I haven't heard Obama say that, yet. But this is not surprising, considering that a lot of those trillions of toxic debt and many of those "unviable banks" are in the US.

Australian banks, on the other hand, are not weighed down by as much toxic debt and could increase their market share if the big banks in the US and Europe are allowed to go to the wall.

So what does this tell us? Firstly, the orgy of billion-dollar "economic stimulus" packages have not worked so far. Banks and other big corporations have gladly taken the money, but they are just hoarding this public largesse and are unwilling to lend very much.

In the technical language, the "global credit flows" remain frozen. Economic stimulus packages like Rudd's, in such conditions, are as effective as shock treatment applied to a frozen corpse.

This is where Rudd's solution of "tough love" to save capitalism comes in.

Rudd poses as the champion of the capitalist system's survival, but that's easy for a capitalist politician from a country where the interests of its big banks happen to temporarily coincide with the general interest of the system.

Indeed, a little more than a decade ago US politicians were cagily urging the Japanese government to let its debt-choked banks to go to the wall — advice that the Japanese politicians declined, opting instead to wear a decade of economic stagnation.

In the current global economic crisis, Rudd may well be correct that the only capitalist solution is to let banks go to the wall. This may help save capitalism (and allow it to build up to its next corporate greed-fuelled crisis once again). But it will also deliver incredible pain to millions of ordinary people.

The only way to avoid that is to break from the save-capitalism-from-itself formula by nationalising all the banks, putting them under democratic public control and running them for public need.

A program that includes this sort of bank nationalisation — as opposed to the program to bailout the banks and then return it to private ownership, as is being discussed by the US and European capitalist governments — could also be used to fund the massive investment required for a radical shift to renewable energy.

Humanity needs this kind of ecologically sustainable shift for its survival, and it will create work for the growing ranks of the unemployed in the process.

In the face of this historic global crisis, Rudd is presenting the case to save capitalism (so it can continue to ruin the world) but Green Left Weekly is one of the few voices presenting alternative solutions to save people and the environment from capitalism.

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