FINANCIAL INJECTIONS ENSURE THE ASSETS OF THE RICH

Chavez and Morales can only dream of bank nationalizations as in the US and Great Britain

A Conversation with Leo Meyer

[This interview published in: Junge Welt, 10/21/2008 is translated from the German on the World Wide Web, www.jungewelt.de/2008/10-21/015.php. Leo Meyer is the acting chairperson of the German Communist Party (DKP).]

Q: There is no alternative to the bailout package over 500 billion euro for the German banking sector, decision-makers claim. What is the opinion of the DKP?
Leo Meyer: The minister of finance says the fire first has to be put out quickly and we’ll take it from there. Otherwise there will be an extensive fire that will also threaten the banks. The arsonists use extortionate means to whip through the “bailout package” in a flash without great public debate. The assets of the rich and stockholders will be secured at the taxpayers’ expense. At the same time the fire is put out with oil. Federal German loans are made to enliven the financial markets and – as Deutsche Bank urged – “provide the market with safe investment instruments.” After the bursting of the real estate bubble, owners of financial assets are now offered a new field for profitable financial investments. Taxpayers, the unemployed, pensioners and students should now pay for the increased state indebtedness with higher taxes and cuts in social spending.

Q: Isn’t this Wall Street socialism the opposite of socialism, as some commentators say?
Meyer: Wall Street socialism would be a strange socialism. Big banks in the US and Great Britain are nationalized to an extent Hugo Chavez and Evo Morales can only dream. But unlike Latin America, the profits of the rich are guaranteed and losses are socialized in the US.

Q: Why does the German way emphasize partial nationalizations?
Meyer: Whether partial nationalizations or direct capital injections, all the governments move in the framework of the agreements of the G7 states. The states supply the banks with capital without meddling in business affairs or gaining a majority share. Here and there the principle is the same: the state gives money but keeps out of company policy. When assets are saved, they are re-privatized.

Q: What does the DKP propose?
Meyer: Obviously the money- and credit flow must be secured. A public stocktaking is necessary. Every euro must be subject to a public control. Secondly, the money must be taken from those who profited from the past financial system. Thus a tax reform must be on the agenda: property tax, raising the top tax rates and progressive taxation on high incomes, assets and profits. If a five-percent millionaire’s tax were levied on the 800,000 millionaires in Germany, 100 billion euro would be raised annually. While money is there for the bailout package, a state investment program is also urgently necessary. Socializing losses is not enough. The banks should be nationalized.

Q: What do you mean concretely?
Meyer: In all financial institutes, initiatives to control and monitor transactions should be introduced. Credits should be awarded for investments in the real economy, not to turn new speculative wheels. The funds must target the reorganization of the production- and consumption-model toward environmental- and human sustainability.

Q: Is society really ready for the system question?
Meyer: All this is up for debate. With the financial crisis, a whole ideological, political and economic conception breaks down. The past growth model of global capitalism is in a structural crisis. Battles must focus on a new economy beyo0nd the profit logic and cannot only be defensive.

Q: Shouldn’t the left raise the system question more clearly?
Meyer: The whole left, not only the German Left party, must develop socialist conceptions. These must not be abstract but bound with concrete alternatives. The rich must pay. The nationalization of the financial sector could be a starting point for social struggles. Efforts to put bank managers behind bars are not helpful. This diverts from the error in the system.