A great banker says: “An economic hurricane is coming” – Workers of the world, it is time to prepare to fight! – working world
This slightly edited lecture was given by WWP First Secretary Larry Holmes at a June 16 New York branch meeting.
The unfolding economic crisis is by far the most important development at the moment. Bigger than anything I can think of, and a lot of big things are happening.
One of the things that makes it more dangerous, more combustible for capitalism and also for the working class, is that a number of other crises are developing at the same time, and they all influence each other. others. There is the war crisis, which has a definite impact on the economy. I won’t name all the crises, but there is a political crisis in this country with the ruling class, and the Jan. 6 ratings now on television reflect this.
It’s no exaggeration to say that right now, unlike a few weeks ago, Wall Street is in the throes of panic. Listening to these bankers and “talking heads” and reading what they say, they try to quell the demoralization and panic as if the end of the world is coming to an end. That seems to be the mood, at least from many bankers and investors – and many people associated with finance capital, not just in this country but around the world.
I am not going to talk now about its impact on the working class, which is far more important to us than its impact on the capitalist system. But it’s important to look at how they see it and also to step back and see how a capitalist crisis develops. The past is a prologue. Virtually all capitalist crises are never really fixed but are somehow passed on, on the backs of workers and the oppressed. It’s not really going away. It’s not resolved. And that tends to make the next capitalist crisis even bigger and potentially more explosive.
How Capitalist Crises Evolve
In the 1980s, the working class was too weak to stop globalization, reindustrialization, job-killing technology – what the ruling class calls liberalism – austerity and factory closures. When the 2008 financial crisis hit, it was first precipitated by a credit crunch in the housing market. But a crisis in one area of the economy may just be a catalyst to open the floodgates, letting everyone see the extent of the general crisis below.
The capitalists faced the financial crisis, after it nearly collapsed the financial markets. It’s been called the Great Recession, because of the jobs it destroyed and the austerity it brought, and it particularly awoke young workers. There has been a change in mood, in expectations, on the part of young workers. Perhaps the first expression of this was Occupy Wall Street.
The ruling class dealt with it in two ways. One was that they sided with Barack Obama, a very attractive first African-American president. It was a kind of concession to the working class. We all know how it turned out. He was not a leftist but a protector of the interests of capitalism, right to the end.
And the other was to start with so-called quantitative easing – and that was a number of things. Most important was that the Federal Reserve printed a lot of money. And in fact, central banks around the world have been printing a lot of money and funneling it into the financial system, to the tune of trillions and trillions of dollars. Moreover, keeping interest rates close to zero was part of quantitative easing. The problem with that is that it couldn’t go on forever.
This creates inflation, in part, and creates a gigantic bubble of debt, [where] all that money is basically worthless because it’s not based on workers producing something. It’s just bogus, like Monopoly money. Try to imagine tens of trillions of dollars on top of the huge debt that already exists.
As Lenin explained in “Imperialism, the Highest Stage of Capitalism”, at a certain point, finance capital, the banks – which, at the very beginning of capitalist development, were in a way the intermediary person who ensured that corporations big and small got the capital, so they could create the means of production and exploit the workers – got bigger and bigger in relation to the economy. Today, finance capital has become dominant on the productive side of the capitalist economy, essentially turning it into a giant Ponzi scheme.
This is the situation in which the world capitalist economy currently finds itself, and it has created this huge bubble. And when there’s a crisis like this, and the capitalists run out of ways to deal with it, that bubble, to one degree or another, starts to burst, and the economy can become a house of cards. . Before long, companies, banks, even countries, will go bankrupt, collapse.
What the bankers say
Jamie Dimon, [Chief Executive Officer] of JP Morgan, is the most powerful banker in the United States and the imperialist world. Try googling “the most important banker” or “the greatest banker in the United States” and you will get Jamie Dimon. This does not mean that all other bankers are not important. The head of the Federal Reserve, Jerome Powell, is also an investment banker. But the bankers who manage billions and trillions of dollars, they listen to JP Morgan.
About two weeks ago, an article quoted Jamie Dimon saying, “We are headed for a hurricane. Other investment bankers have said similar things. They don’t appear on TV, perhaps trying not to panic the financial community around the world. Another well-known popular investor, Michael Novogratz, said today after the last reading of the stock market, which was down, that the economy “is going to collapse”.
In theory, it is possible that the capitalists will find a genie or a rabbit in a hat somewhere to ward off this crisis, to do some version of what they did 12 or 13 years ago, or during the crisis of dotcoms from the 1990s, or in the 1980s. But it’s going to be much, much harder now, because they’re out of ammunition. And the thing is, they’re making it clear that they don’t know what they’re going to do if this thing gets out of control.
The only thing we can be sure of is the class struggle. The capitalists will do their best to ensure that the working class and the oppressed – not only of this country but of the world, especially the global South – bear the brunt of this new crisis.
This is the situation we are facing, but good things are happening. There’s the worker upsurge and organizing drives, not just at Amazon and Starbucks, but in many other places. This is the sign of a long-awaited awakening of mainly young workers.
This leftist coalition in France, comprising remnants of the Communist Party, some socialists and others, virtually won the first round of recent legislative elections there. This is very important because, as many of you know, politics in France has long been dominated by neo-fascists.
As for the role of the labor assembly movement here, an economic hurricane is brewing. The job of the workers’ assembly movement is to help as much as possible to prepare the working class to defend itself – and then go on the offensive. And this usually suggests not only gains, but even at some point on the road to going on the revolutionary offensive.
The fight against fragmentation is essential
Our class is always fragmented to some extent. But when the workers’ movement, when the revolutionary forces, or even the progressive forces of the workers’ movement are weak and not a strong force of gravity bringing the workers together, then the forces of fragmentation and bourgeois ideology are all the more powerful. And in an economic crisis, fragmentation tends to go one way or the other. Fragmentation can be exacerbated in a way contrary to the coming together of the working class.
But if struggle sets in and class consciousness prevails, fragmentation can be lessened. Class solidarity and class struggle can prevail.
Amazon is now in Phoenix, Arizona, with its well-paid lawyers. They dragged Amazon union leadership to Phoenix, demanding that the [National Labor Relations Board] hearing that they did not want to stand in New York. They thought New York was biased in favor of working people. And so they wanted to take him down south, where they thought it would be better for them.
This hearing seeks to overturn the results of the historic April 1 election, when the union won at Amazon’s Staten Island offices. Amazon has sworn to crush this. And they are very serious about it.
I have no idea if they are able to do this. I know the Amazon Labor Union feels it can defend itself. But they are alone there.
In the meantime, the AFL-CIO held a big convention in Philadelphia, and one of the workshops was on Amazon. But they didn’t even invite the leadership of the Amazon Labor Union or, for that matter, anyone from Starbucks’ organizing campaign to speak.
Look how strange. Biden invites the [ALU] leadership coming to the White House, but the AFL-CIO is not inviting them to speak. They could have easily met someone from Starbucks. Someone from this union, wherever they come from, could have spoken.
This is an example of fragmentation. Everyone who follows this says, “That win was historic, because it can bring more wins.” Moreover, what workers at Amazon, Starbucks and others are doing will help transform the working class in a progressive and revolutionary way. It doesn’t just affect Amazon workers and Starbuck workers, it affects the whole class.
It would be a good thing if labor assemblies could call days of action to demand that Amazon recognize the union. The question is: are we able to do this? If we did that, it wouldn’t just be a place where people who wanted to be with the workers could hang out. It would also open a fight, a healthy and absolutely necessary fight, with the union bureaucracy.
Our trade unionists at all levels could put pressure on them: “What are you doing? How come you don’t do that? How come the central labor councils, Jobs Without Justice, aren’t calling for big protests in support of the under attack Amazon workers, Stop & Shop workers, immigrant workers and all workers?
I would say that as communists we need to open our eyes and see more clearly than anyone what is really going on. It is a global capitalist crisis. When the US central bank, the Fed, lowers or raises interest rates, virtually all central banks in the world do the same. It is a global crisis.
We have to dig deep. Be very objective, be sober and ask yourself how we can transform ourselves to serve the working class in the midst of what looks like a historic economic crisis.