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 | 3-28-09, 10:05 pm |
Original source: Focus on Socialism
Prime Minister Harper will head to the London G20 on April 2nd boasting of Canada’s superior banking system that he says will pull the country out of recession faster than any other country on earth. Harper’s boast is made even as Parliamentary Budget Officer Kevin Page told MP’s on March 28th that the Canadian economy is contracting faster than the predictions of Conservative Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney. Page told Parliamentarians that his departments scrutiny of government data and private forecasters predict that GDP will decline by 8.5 percent in the first quarter of 2009 and 3.5 percent in the second quarter, contradicting the Harper Government’s claim that the economy would decline 0.08 percent in 2009 and actually expand in the first quarter of 2010. Page also predicted that the government deficit will be $38 billion in 2010-2011 not the $33.75 billion claimed by Flaherty. The Parliamentary budget officer also predicted that unemployment will increase by another 385,000 by June 2009 bringing the official overall unemployment rate close to 8 percent. The Harper Government’s response to Page’s report to Parliament was to cut his departmental budget, refuse to provide him with vital government data and to refer all public requests for information to an out of date Government website loaded with Conservative Party propaganda.
Page is not alone in exposing the flaws in the Harper forecasts. Former Bank of Canada Governor David Dodge also disparaged Flaherty and Carney’s rosy forecasts warning that the Conservative government’s budget stimulus won’t even be felt until 2010 and 2011. Dodge predicts it will take years to correct the global capitalist financial system. Dodge asserts the most optimistic forecast doesn’t foresee a return to pre-recession levels of capacity in production until late 2013. In his report Dodge examined trade imbalances and predicted rising consumption taxes. The latter was confirmed by the McGuinty Ontario budget that is planning a rise in combined GST/PST taxes. Dodge called for all financial institutions to build up their reserves and to agree to controls imposed on derivative and credit default swaps.
Prime Minister Harper confronts a dilemma. The captains of high finance can’t agree on what is really happening in the Canadian economy as it slides inexorably into depression. For the first time in his political career Harper’s instinct to provide knee jerk support for US Government formulas is not an option. President Barack Obama has not interfered aggressively into the US economy to save Canada. Treasury Secretary Timothy Geithner is struggling to get Congressional approval for a half a trillion dollars to remove toxic mortgage debt from US banks and to implement a $787 billion stimulus package. The US sweet heart deal means for every $100 in toxic mortgages purchased from banks, the private sector will put up $7, the government puts up $7 and the remaining $86 would be covered by a government loan provided by the Federal Deposit Insurance Corp. Christina Romer, chairwoman of the US White House Council of Economic Advisers told CBS' The Early Show Monday March 23rd. “We're not trying to rescue everyone. We're trying to rescue the system." A similar bailout has taken place in Britain where last October Prime Minister Gordon Brown flooded collapsing British Banks with 500 billion pounds sterling to little effect as several of Great Britain’s leading banks collapsed in ruin. The comparable figures in Canada are $125 billion bank bailout and a $40 billion stimulus.
All of the leaders of the capitalist states are “trying to rescue the system” by adopting massive bank bail outs while at the same time fighting among themselves to impose regulations on banks and financial institutions that are responsible for triggering the crisis in the first place. They just can’t agree on how to do it. The April 2nd meeting was preceded by the G20 Finance Ministers and Central Bank Governor’s meeting of March 14. The Central Bankers and Finance Ministers issued a joint communiqué. That should mean that all those attending agree with its central thesis. That is far from the case.
Point two of the G20 finance ministers’ and central bank governor’s communiqué states:
“Our key priority now is to restore lending by tackling, where needed, problems in the financial system head on, through continued liquidity support, bank recapitalization and dealing with impaired assets, through a common framework. We reaffirm our commitment to take all necessary actions to ensure the soundness of systemically important institutions.”
Point three of the communiqué claims that fiscal expansion provided at the previous Washington G20 meeting, supports growth and jobs. Where has that happened? Unemployment has increased in all of the G7 countries since the banker bailouts. In spite of their miserable failure, brazenly the central bankers and finance ministers declare:
“We are committed to deliver the scale of sustained effort necessary to restore growth, and call on the International Monetary Fund (IMF) to assess the actions taken and the actions required. We will ensure the restoration of growth and long-run fiscal sustainability.”
The G20 April Meeting will do nothing of the kind. The G20 will reveal deep inter-imperialist divisions and the clash of separate global ambitions of Germany, Great Britain, France, Italy, Japan, South Korea, Canada and the USA. A variety of regional interests lead by such emerging capitalist economies as Russia, Brazil and India, will be contending for influence. Looming over the entire event will be The People’s Republic of China, a mixed socialist-capitalist economy and the only member of the G20 that is still recording growth and that commands critical influence over the debt crisis in the USA.
The G20 slogans against protectionism and appealing for a global solution to the economic crisis of capitalism are imperialist slogans calling upon the working class to assist the capitalists to rescue the capitalist system. The slogans of the leading capitalist states are designed to separate the working class from the nation. Assailing protectionism is nothing more than an imperialist appeal to subordinate people’s sovereignty over the destiny of the countries involved.
What the leaders of the G20 have in mind as a role for the IMF is fully exposed in what is happening to Iceland, Latvia, Hungary, Rumania, Ukraine and Czechoslovakia.
In the former socialist east, in exchange for IMF bail outs, the “new capitalists” of the former socialist states must accept instructions from their US-British-French and Canadian betters to burden their working people with more decades of heavy labour, further reduce spending on social programs, give up the last vestiges of sovereign control over their economies and natural resources and spend hefty portions of any IMF loans they may receive on NATO military projects on their sovereign territory. The Canadian banks, swollen with capital provided by Finance Minister Flaherty, will be there skulking about to see what ‘deals” can be had for investor insiders eager to plunder the weakened once viable socialist economies.
And what about the US-EU-and British bankrupt banks the Wall Street-Canary Wharf citadels of finance capital, now teetering and in ruins? These are the “systemically important financial institutions” that collaborated with rogue capital to roam the world in a frenzy of greed wrecking the global capitalist financial system? They are already forgiven, propped up, refinanced and encouraged to do it all over again, this time with some rules and properly chastised to show more discretion.
What militant worker, labour leader or Communist believes such balderdash? Incredibly some do and advise workers their only option is back one of the variants that will emerge from the G20. “Back our team – we are the home team?”
Opportunism on the left today is to assert that workers have to choose between one of the capitalist variants that will appear at the G20 attempting to save the profit system. It is not the task of the left to assist the capitalist system out of its crisis. It is the task of the left to take advantage of the crisis to advance the cause of socialism. Some Communist leaders disagree. They assert that socialism is not on the agenda, and that our task is to back the lesser of the evils as the crisis deepens.
When since the advent of capitalism has socialism not been on the agenda? Militancy today is to advance a labour program for the nation! Labour militants condemn and repudiate all of the capitalist formulas as providing nothing more than a mitigation of the suffering of the working people – not a solution!
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