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Go Along for the Ride – Or Fight to Get Rid of the System
CPS Election Analysis 2008 - Week 4
FOS Editorial Board
Prime Minister Harper is deceiving the Canadian people when he says there is no threat to the Canadian economy from the deepest made-in-USA money market crisis since the Dirty Thirties. Decades of US-Canadian deep integration of capital markets has tied Canadian finance capital inextricably to the US financial system. To suggest that Canadians will be unaffected is election propaganda plain and simple and must not stand.
If everything in Canada is so rosy then why did the Canadian Press on 09/18/08 report that the Bank of Canada has collaborated closely with the U.S. Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan and the Swiss National Bank “in a coordinated measure designed to address the continued elevated pressures in U.S. dollar short-term funding markets.”
The CP story reported that the Bank of Canada and the Federal Reserve set up a US$10 billion reciprocal currency arrangement to provide U.S. dollar liquidity in Canada. This could be drawn on by the Bank of Canada to support any Canadian financial institutions that ran short of ready cash. It is not credible to believe that Harper and Flaherty and Bank of Canada Governor Mark Carney aren’t deeply involved in the Bush administration’s death bed schemes to save the US banking system.
Today, September 19, 2008 President Bush flanked by Federal Reserve chairman Ben Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox outlined a plan to saddle the US taxpayers with a trillion dollar slush fund to absorb bad debt left by the collapse of some of Wall Street’s biggest investment banks. This desperation measure condemning US workers to decades of indebtedness to pay for the greed of Wall Street came after a series of bail out attempts of some of the largest Wall Street investment banking institutions failed.
First there was the bankruptcy of Lehman Brothers, the fourth largest investment bank in the US followed by Merrill Lynch, bought by the Bank of America at a throwaway price while insurance giant AIG (American International Group) was given a bailout package. Housing mortgage companies, Fannie Mae and Freddie Mac, were effectively nationalized and there was an earlier state-brokered Morgan Stanley takeover of stricken investment Bank Bear Stearns. These measures failed to stop the collapse.
Harper would like Canadians to believe none of this has to do with Canada. Harper and Flaherty and Carney would like Canadians to forget that they are working with corporate fixer Purdy Crawford a corporate lawyer and big investor insider to attempt to come up with a scheme to retrieve $33 billion for Canadian investors cast into limbo by the effects in Canada of the US subprime crisis and its Canadian version, the Asset Backed Commercial Paper (ABCP) fiasco.
CPS wrote extensively on the subprime crisis in November 24, 2007 in an article entitled, “Asset Backed Commercial Paper (ABCP) Moral Bankruptcy and a Possible Recession”. Global Research author F. William Engdahl wrote an excellent background article, “The Financial Tsunami: Sub-Prime Mortgage Debt is but the Tip of the Iceberg”.
Harper and Flaherty are telling voters not to worry, that the life line thrown to the US people in the dying days of the Bush administration with a Wall Street boat anchor attached will protect Canadian workers from the affects of the US banking crisis. It is not at all clear that the US Government, with all its resources, can succeed in bailing out failing US financial giants with public funds, given the sheer extent of their losses.
What Harper and Flaherty want to keep out of the election campaign debate are the disastrous effects of a deregulated financial system in the US, which has been held up by the neo-con advocates of capitalist globalisation and financial liberalisation as a model to be emulated by all countries including Canada. The crisis in the USA has exposed just how inefficient and lacking in viability is the global system managed by the USA. In a frank admission of that fact Ben Beranke US Federnal Reserve Chairman said in July that “it is unrealistic to hope” that financial crises can be entirely eliminated, while maintaining an innovative financial system. “Nonetheless, recent experience has illustrated once again that financial instability can have serious economic costs,” he said.
That masterful understatement by global imperialism’s chief banker leaves nothing more to be said by Marxists. Capitalism is a boom and bust system and there are only two options. Go along for the ride, or get rid of it. |