From Socialist Worker…

Karl Marx famously wrote that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie”.
But the political leaders of the US looked more like a shambles when they met in the White House on Thursday of last week.
Republican congressmen ignored George Bush’s plea that “if money isn’t loosened up, this sucker could go down”. Hank Paulson, the US treasury secretary and ex-boss of Goldman Sachs, half-jokingly went down on one knee to Nancy Pelosi, Democratic speaker of the House of Representatives, to beg for her support.
Where does this chaos come from? Essentially, over the past three weeks the global financial system has completely seized up. The turning point seems to have been Paulson’s decision last month to let the Wall Street investment bank Lehman Brothers go bust. Since then banks have simply stopped lending to each other.
The basic problem is that banks are stuck with so called “troubled assets” – mortgages repackaged into dodgy financial securities – that no one wants to buy. Paulson wants the US Congress to vote him $700 billion to buy these assets to get the bad debts out of the banking system.
A White House meeting was supposed to rubber stamp this “Troubled Assets Recovery Programme”. Barack Obama and the Democrats were ready to back it. It was the Republicans who ignored Bush – now the lamest of lame ducks – and scuppered the deal.

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