From: Revolutionary Praxis <email@example.com>
Date: Sun, Jan 29, 2012 at 5:36 PM
Subject: [** MAOIST_REVOLUTION **] Bailing Out Bankers Leaflet
To: Maoist Revolution <MAOIST_REVOLUTION@yahoogroups.com>
BAILING OUT BANKERS
In 2008 there was an international economic crisis brought about by the reckless speculation of investment bankers. Governments, including the British Government, had to support banks by injecting many hundreds of billions of pounds into them. Otherwise the whole financial system would have collapsed causing a major economic depression.
WHERE DID THE MONEY COME FROM?
The Labour Government, which had encouraged banking speculation, raised these bail-out funds to save the bankrupt banks by borrowing money from other banks, investment companies and wealthy people. The present Coalition Government is trying to pay off these loans by cutting public spending. They are holding down public sector pay, reducing welfare benefits, cutting back public services and attacking pensions. It is ordinary people - the NINETY-NINE PERCENT - who are being forced to pay for the foolish greed of the banker members of the capitalist class - the ONE PER CENT (or less). Meanwhile the Government's banker friends go on taking their multi-million pound bonuses.
At the same time as big banks became unable to meet their obligations, some governments - in Portugal, Greece, Italy and Spain - were getting into deep, unsustainable debts. In order to maintain public spending they have been borrowing more and more from the bankers. As these governments' debts have grown the bankers - the "markets" - see their lending as more risky and charge a higher rate of interest on further loans. This has simply intensified the financial problems of the debtor governments which have to borrow more from the bankers at even higher rates of interest to try not to default on their loan repayments.
These banks are behaving like loan sharks who lend money to poor people at very high interest rates. Then when the borrowers can't meet the repayments the loan shark offers to lend more money at even higher interest rates. The borrowers are trapped in a cycle of increasing indebtedness.
In the case of the big debtor governments in the Eurozone, such as the Greek Government, the situation is different from an individual debtor because if the governments stop paying their loan repayments then the banks who made them start to collapse. So other governments in the Eurozone, such as the German and French, have to borrow funds to prop up banks to prevent the international financial system collapsing. And yes, it is ordinary people in these countries who have to pay more tax and suffer cuts in public services to pay for bailing out the bankers. Whatever happens, we lose and the bankers win!
TIME FOR CHANGE
Every day it becomes clearer that the capitalist system under which we live is breaking down. Inequalities are widening, unemployment is rising, and real incomes are falling. No longer can we afford to prop up the bankers and the politicians who support them. It's high time to start fighting back!
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