Chris LeBron

Economists know that nothing can be done to prevent this kind of crisis. For capital, the crisis is the only way out of the crisis. It has to destroy the gigantic accumulated sums of capital to restore the rate of profit and re-start the accumulation process. The catastrophic process has already started. In the latest Global Financial Stability Report, the IMF estimates that capital of 4.1 trillion US dollars has been lost so far in the financial sector and losses are increasing. This sum, although being huge, represents an infinitesimal part of fictitious (and productive) capital that has to be destroyed, according to the laws of capital accumulation.

The capitalists themselves had to admit that the current crisis erupted in 2007 with the burst of the US subprime mortgage market bubble and the international credit crunch is not simply a cyclical one or a conjectural disturbance. It is the worst crisis since the Wall Street Crash in 1929 and the Great Depression. It has historic dimensions in scope and depth; it affects the world economy, while its end is unseen on the horizon.

It is clear now that it affects not only the financial sector but the entire capitalist economy dominated by a decade’s long over-expansion of finance capital invading, interconnecting and controlling all aspects of economic life globally.

Capitalist nationalizations, "the negation of capitalism within the capitalist system itself”, are an extreme action to rescue capital from bankruptcy. Within the framework of the actual social regime, nationalization brings the charges of the crisis on the shoulders of the working people through the increase of the public debt, unemployment, inflation etc. On the other hand, it's an objective manifestation of the process of preparation and transition to the collective property of the producers under the control and management of the direct producers themselves.

The outright failure of so-called "neo-liberalism" (neo-conservatism in USA), the economic dogma followed by almost every capitalist government, was epitomized by the dramatic actions taken urgently by the champions of privatization, of Reaganomics and Thatcherism in the US and UK, themselves.

The process of increasing state rescue operations started from the nationalization of Northern Rock in Britain in September 2007, of Bear Sterns, one of the "Big Four" investment banks in the United States, in March 2008, and then reached a decisive turning point that precipitated the September-October maelstrom: the nationalization of the twin giants Fanny Mae and Freddie Mac controlling four fifths of the collapsing US mortgage market, in September 2008.