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Socialism Today 112 - October 2007


Socialism Today 112 - October 2007


Credit crunch threatens global downturn

THE GLOBAL CAPITALIST economy has been hit by a major credit crunch. The collapse of the sub-prime mortgage business in the US, brought home by the collapse of two hedge funds managed by Bear Stearns investment bank, provoked panic on money markets. The effects have already spread much wider than the housing finance sector. As a result, there is a paralysis of inter-bank lending and a seizing up of big sections of the wholesale money market.

This crisis is potentially much more serious than the Asian currency crisis of 1997 and its aftermath, the collapse of the Russian rouble and the bankruptcy of the hedge fund, Long Term Capital Management. At that time, the US and other advanced capitalist countries were in a relatively strong position and intervened to stabilise the world economy. The present liquidity crisis originates in the US, the product of a partial deflation of the housing bubble and other debt bubbles which developed after 2001. The global financial system is under threat.

Rocking capitalism

EARLY IN September, the impending insolvency of Northern Rock provoked a classic bank run, with thousands of depositors queuing to withdraw their money. The scenes recalled events in Argentina in 2001, or the last bank run in Britain which occurred in 1886. The problems of this relatively minor bank threatened to detonate a major financial crisis, as well as a political crisis for the Brown government. Moreover, the event highlights the current fragility of globalised financial markets. LYNN WALSH reports.

Poverty in the UK

For working-class people, the link between the policies pursued by a series of governments, Tory and Labour, and rising poverty and inequality has long been clear. Now two authoritative reports, reviewed here by HANNAH SELL, starkly reveal the effects of 30 years of neo-liberal onslaught in Britain.

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US elections
Anti-war activist to run for congress

Turkey's new president
AKP consolidates its position

Chile protests
A new political landscape

The legacy of the Russian revolution
On the ninetieth anniversary of the 1917 Russian revolution we reprint a defence of October written by Peter Taaffe in 1997

Iran on the brink
Rising workers & threats of war

The fragile superpower
The precarious hold of the Chinese regime

Biofuels propaganda     Responding to religion

Cover cartoon: Suzanne Muna

Come to Socialism 2007

Come to Socialism 2007Socialism 2007 is a weekend of discussion and debate hosted by the Socialist Party, taking place on the 17 and 18 November 2007