Editorial: Latest crisis of capitalism: Blood sucking banks

The collapse of Silicon Valley and Signature banks exposed the worst financial crisis to hit world capitalism since 2008. Even as the U.S. bosses rushed to protect the millionaires’ and billionaires’ deposits, and Europe’s financial bosses did the same for the giant Credit Suisse, a broader disaster is brewing. The instability in the world banking system is the direct result of the larger crisis of capitalism. It is driven by the decline of U.S. finance capitalism and the rise of the Chinese capitalist bosses. As worldwide recession looms, the working class is shouldering the pain. The bosses’ troubles can only get worse. Our liberation has one path: communist revolution.

Blood-soaked banks
Banks are one of the great crimes of capitalism. They produce nothing of value yet rake in trillions in profits. U.S. and European banks were born from slavery and built on racism. The banking system financed the ships that sailed to Africa and kidnapped workers.  It grew by providing loans for the cotton bosses to buy more land and more enslaved workers to farm it. The banks valued these enslaved workers more highly than the assets of all the railroad companies combined. All of the bogus racist theories that divide workers today were created to justify the brutal exploitation of slavery and the banks’ grotesque, blood-soaked fortunes (1619 Project Vox, 8/16/19).

Latest crisis could rock the system
The current banking crisis reflects the boom-and-bust nature of capitalism. It was triggered by a brazen lack of bank regulation and a fall in the value of long-term U.S. Treasury bonds, a form of debt that is bought with a promise that it will be repaid at a certain interest rate. Today’s world capitalist system is drowning in debt, from deficit-ridden governments to over-borrowing companies to workers who can’t pay their credit card bills and still feed their families.

Since the mortgage crisis of 15 years ago, the U.S. has propped up its struggling economy with extremely low interest rates that encouraged banks, businesses, and workers to borrow heavily, invest recklessly, and spend freely. When inflation soared with the Covid-19 pandemic, and the U.S. Federal Reserve responded by raising interest rates, the banks’ lower-interest Treasury bonds lost much of their value. At the same time, many midsized and smaller tech companies—the dominant depositors at Silicon Valley and Signature—were forced to withdraw funds as their cost of doing business went up and their revenues went down. To pay these depositors, the banks were forced to sell off their bonds at a steep loss. Other depositors panicked and rushed to take out their money as well, setting off a bank run—a prime example of the anarchy of the profit system.

With as many as fifty other banks in crisis (CNN, 3/13), the U.S. rulers rushed in to reassure obscenely wealthy venture capitalists that their money is safe because the bosses’ government will guarantee it. On the other hand, inflation and high interest rates mean that tens of millions of workers can’t afford to buy a home. Millions have been foreclosed upon by the banks or evicted because they can’t afford their rent.  With grocery prices skyrocketing, one of four U.S. adults now struggles to get enough to eat (CBS News, 3/21).

Tech industry crashing
The tech Industry, once hailed as the hope of U.S. capitalism, is the latest industry to suffer a plunge in profits--and to make workers pay with massive layoffs.  Of the 144 publicly traded tech companies valued at over $1 billion, only 12 percent made any profit last year. Most of them will never overcome their cumulative losses (Market Watch, 3/25). The bosses’ greed and lack of discipline are coming home to roost.

Worldwide crisis drives move toward fascism
As the failing Credit Suisse was taken over by rival USB, central banks in the U.S., Canada, Europe, Japan, and Switzerland rushed in to guarantee deposits and prevent the collapse of the entire international banking system (Business Insider, 3/20). But this short-term fix cannot stave off the threat of the next massive economic recession or depression.

The U.S. bosses’ main rivals, the Chinese capitalists, are better positioned to weather the coming storm. By contrast to the U.S., the Chinese bosses still make most of their profits from manufacturing—from the production of actual goods. In addition, they are much further along the road to full-blown fascism and direct rule, without the constraints of liberal democracy. They are better able to force their billionaires and bankers to put the interests of the entire ruling class first, even if it means that some of them will take big losses (New York Times, 3/27).

At the same time, China’s provinces are faced with slowing growth and as much as $9.5 trillion in debt. Strapped for revenue, local governments have slashed workers’ pay and health insurance. Hebei Province, bordering Beijing, cut off heating subsidies for natural gas during a record-breaking cold wave (NYT, 3/29). Wherever bosses are forced to balance their books, workers are sure to suffer most.

If the U.S. rulers hope to protect their profits and come out on top in the looming World War III, they will be forced to discipline their fellow bosses while viciously attacking the working class—and ultimately to slaughter millions.

Communist world is worth fighting for
Progressive Labor Party is fighting for a communist world. Under capitalism, buildings sit empty while millions are homeless; food is thrown away as people starve. The education, healthcare, and transportation systems are all failing. You can’t eat money. You can’t shelter people with hundred-dollar bills. You can’t treat diseases or educate children with Treasury bonds. Under capitalism, we are forced to sell our labor for much less than what it’s worth, and then to exchange money to get things we need. Money only exists because a system based on profit needs to track how much it steals from the working class. Money has driven workers apart by promoting selfishness and individualism. And when workers are too old or sick to be squeezed for more profit, a society based on money kicks them to the curb.

Under communism, all production will be organized through a communist party to serve the needs of the working class. There will be no profits, no money—and no bloodsucking banks. A communist society will be so much stronger because we will work collectively to run society. Without money to warp our priorities, everybody will be valued. Everyone will be helped to find ways to contribute. Capitalism is quickly going south, and there is no point in trying to save it. The time has come for the working class to say “Enough!” The time to fight for communism is now.