Corporate Welfare and Socialised Debt

We are living in a time of unapologetic and undisguised corporate welfare. The government ‘bailouts’ of financial institutions and other industries represent hand outs with few conditions to the very people who are directly responsible for the current global crisis of capitalism. While the necessary investment could not be found for hospitals, schools, infrastructure and real wage increases for workers, billions if not trillions could be conjured up overnight to cover the debt created by greedy and unaccountable institutions.

Various governments have attempted different strands of the same policy. They have recapitalised – injected billions into – institutions of their choice, they have part or fully nationalised – bought the major shareholding in – companies and institutions again of their choosing, they have guaranteed the debt and risk – shouldered the responsibility of non-payment – again of their favoured businesses. All these policies have done little to address the fundamental crisis we face, a crisis due to the anarchy of the capitalist productive system in this case started by finance capital.

Whether in the form of nationalisation or government guarantee one thing is common to all capitalist responses to this crisis. Ordinary tax payers and citizens are shouldering the responsibility for the irresponsible and unaccountable actions of an inherently unstable and unjust economic system. Those at the top who have creamed off billions in rewards and bonuses are being protected and guaranteed by those at the bottom who have for years have not received any meaningful increase in standard of living as workers have increasingly been swayed by the relentless advertising of so-called cheap credit (of which we are now seeing its not so cheap cost).

The one common theme across western countries has not been, as some people mistake it for or dishonestly call it, socialism but in fact they very opposite it has been the socialisation of debt. That is, society forced to take on the cost and risk of the bad debt of individual private institutions without these institutions being owned socially. Citizens incur the cost and shareholders receive the profit.

Nationalistion from a ‘right-wing’ perspective as this is, national socialism as it has previously been called, has not been carried out to save jobs (as we have seen with the job losses suffered in Northern Rock post nationalisation by the British Government amongst many other examples) nor has it been carried out so that profits will be socially owned and re-invested in social infrastructure. No, this form of nationalisation is being carried out to stabilise the system so that all can be re-privatised again and the economy can go back to ‘business as usual’.

Indeed, so delighted have the Banks been with this action Anglo Irish Chairman Inow former Chairman) Donal O’Connor said, ‘The Government's commitment to make further capital available ensures that the Bank will continue to be a sound and viable institution. We are very grateful to the Government for this clear demonstration of support.’ And it sure must take something for a private Bank to thank government for state intervention in their internal financial affairs!

Connolly Youth Movement