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Barclays and the LIBOR lies
Any idea that the JP Morgan scandal was an isolated event was dispelled when Barclay’s bank was found to have lied in order to manipulate LIBOR, the bank lending rate.  It was then disclosed that many other major banks were involved in the conspiracy. The various scandals indicate that the claims made about the nature of the crisis are sheer fantasy. The idea was that casino capitalism was caused by a few bad apples and lack of regulation. The economy would be rebalanced towards manufacturing capital. Casino banks would be separated from high street and tighter regulation would cure everything.
Yet, years into the crisis, JP Morgan is still manufacturing “complex financial instruments” to launch £2 billion  gambling exercises on the global market and Barclays lie about LIBOR – yet these two processes were seen as the instruments of “mass financial destruction” that led to global collapse. 
The LIBOR scandal hits at the very heart of the neo-liberal ideology.  The idea is that the open transfer of information in a free market leads to automatic adjustment of the economy to achieve maximum efficiency. Now the fairy-tale is totally exposed. Banks routinely lie.  When the lies get big enough the banks stop believing each other and inter-bank lending seizes up. That’s what happened in the credit collapse and this is what is happening now.  The credit rating agencies collect information – that is what the banks tell them.  They are former bankers themselves. In the boom they called full steam ahead.  Now they provide the evidence for endless austerity – evidence based on garbage.
Rebalancing is an illusion. In the city of London trillions flow through the computers. The banks siphon off their cut as it passes through. Even at the very low levels of tax paid the government makes tens of billions. Finance capital massively outweighs manufacturing capital in the British economy.
Bank separation will not help unless the state is willing to allow the banks to collapse – the strategy over the past four years is based on ruling out that possibility.
Regulation will not help – Barclay’s defence is that the Bank of England encouraged them to lie and the row in the British parliament had Labour and the Tories accusing each other of conspiracy with the banks – they appear to be both right.
The truth is that major capitalist institutions would not be risking their future or the collapse of the financial system so shortly after the credit crunch if they had any choice. What they are compelled to do as capitalists is to make a profit.  The enormous sums of money present in the global system flow around the world. Where they settle is where the exploitation of the working class is greatest – in China, for example, where workers sleep under their workbenches and are paid a pittance. Yet the trillions in capital are so enormous that vast amounts are in parasitic financial exchanges.
In manufacturing the interaction of capital and labour can   produce new value. Attempts are made to make money directly from money through finance capital. The result is massive and growing debt. Attempts are made to obtain value through forcing workers to meet these debts. Eventually the attempts fail and there is a collapse.
The new scandals and crises of capitalism not only show that that the capitalists have no solution. They also show that the traditional organisations of the working class – the social democratic parties and trade unions – cannot resolve the situation through their policy of collaboration with austerity.  Their cover of an investment fund alongside the austerity cannot work.
The starting point for working class resistance is the repudiation of the debt. The final resolution requires the mobilisation of the workers and the struggle for a society not based on profit – a socialist society.

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