"Banks are falling like ninepins"
"We are at the abyss"

These and many other newspaper headlines describe the ending of the 20-year boom. Like many others I have had difficulty understanding how the UK economy, which is no longer driven by making things but by the finance industry, hasn't collapsed sooner.

The Archbishop of Canterbury refers to Marx in his criticism of what has happened although he prefers to put the crisis down to greed and the worship of money. Marx lived and worked a long time ago and much of what he wrote about has changed. However he repeatedly spelt out that the capitalist system was one of boom and bust. That has not changed over the last 150 years.

Gordon Brown used to claim that due to his personal management of the economic system these things were over. He now claims that the UK is in a better state than other countries to ride out the coming recession. He has pointedly not responded (and neither has any member of his government) to figures from the International Monetary Fund and the OECD that show that the UK is in a worse position than other developed country.

Marx acknowledged that individual capitalists were greedy and this had an effect. However the main driving force was not greed but the need to make a profit. This profit came from workers who cost less than the items they produce. Profit comes from the exploitation of the workers' ability to produce goods but it is of course affected by competition and the ability of the workforce to take a share. The billions of pounds of untaxed bonuses taken by speculators and hedge fund managers has helped drain the financial markets of any safety nets so deepening the present crisis.

Marx, followed up by Lenin and others, predicted that manufacturing would begin to play a subsidiary role to finance. This is what has happened in the UK and the USA. Finance capital is not tied to production and sees the whole world as being open to making a profit. It is the driving force for globalisation. The consequence has been continuous wars to protect its interests. 16,000 British soldiers have died since World War II.

Finance becomes increasingly separate from regulation and government. The vast majority of "money" in the UK is not created or controlled by government but by the banks. One of the main causes of the present crisis is the banks' unwillingness to lend to each other which is essential to keep the system moving. Of course this bank-created "money" has some relationship with the real world. That is it reflects real factories and buildings. However the relationship has become increasing tenuous with magic economic instruments dreamed up by city brokers to boost their million-pound-plus bonuses. The international investor Buffet warned the banks some years ago not to deal in financial operations which they did not understand.

The origins of the present crisis can be summed by this Two Johns sketch. It was filmed nearly one year ago.

The headlines continue as the stock exchanges of the world behave like demented yoyos in the crisis:

• Wall Street suffers worst day for 7 years
• US regulators had to raise £42 billion to save the insurance group American International Group
• World central banks pump billions into market to aid stability
• Meltdown Monday
• Bullishness replaced by talk of 1929

Lehman Brothers' bankruptcy for instance is the biggest in US history; in fact 15 times bigger than the previous one. Not one of the workers in the Lehman Brothers London office predicted their own collapse. Over 2000 of them earned over £100,000 a year to advise investors.

The Scottish Socialist Party has produced an excellent pamphlet by Raphie De Santos, Sub-Prime Driven Recession Coming to a Neighbourhood Near You Soon (£2.50). Raphie was head of Equity Derivatives Research and Strategy at Goldman Sachs International. He was an advisor on derivatives and financial markets to the Bank of England, London Stock Exchange, London International Financial Futures and Options Exchange and the Italian Ministry of Finance.

More information can be found on the SSP website.

Miliband's future

The very young David Miliband, our Foreign Secretary, fancied his chances of removing Brown and becoming PM this summer. In the run-up to the Labour Party conference he travelled the world trying to build the "widest coalition against Russian aggression in Georgia". He ignored Georgia's invasion of South Ossetia and Abkhazia which resulted in over 1000 civilian deaths. The Russians promptly retaliated. The result was the region becoming even more unstable. Even the Israeli trainers and military specialists got out.

This new cold war warrior was overtaken by the economic crisis, gave a pathetic speech at the conference and now looks a has-been compared with his brother Ed.

And after the surprising Glenrothes by-election result, but not before, he has become a cheerleader for Brown claiming the "the game was on" to win the next election. Given his track record over Russia, now undermined by Lord Mandelson, Brown is surely doomed.

Jon Trickett

Jon, having spent the last two years organising the soft-left opposition to Blairism, has become Gordon Brown's Parliamentary Private Secretary. He not only has Gordon's ear but he gets to share an office in No 10. He unfortunately gets no more money which could have been the reason why he resigned from being Peter Mandelson's PPS a few years back. Brown might have to find a way of paying Jon to keep him turning up.

Alistair Darling

Jon's come a long way from his leadership of the Leninist faction inside the old Independent Labour Party but not as far as Alistair from his days in the International Marxist group. He has remembered none of his Marxist past, which is shown in his touching faith in the bankers being able to use the billions of pounds of our money he has given them. They can hardly believe their luck. Faced with job seekers' allowances they can now continue to collect their bonuses and dispose of their staff.

There will be no extra money for these staff and the hundreds of thousands of others who are losing their jobs.

Alistair's trusting faith in the bankers is shown in how he asked them to supervise the huge state loans themselves.

Fabian Hamilton

Fabian got himself into a bit a scrape over trying to take his bike by train from London to Leeds. Apparently he hadn't picked up that he was supposed to book it in. This reminds us of the incident a few years back when he was caught speeding on a bypass near his home. His reason then was he hadn't noticed that the speed limits on this very dangerous road had been lowered.

This is not really a story but an excuse to run our lovely picture of Fabian in disguise at the Leeds West Indian Carnival.

Feeling worse off

The Centre for Economic and Business research has published figures showing the average family is £572 a year worse off than 12 months ago. It is expected that the present squeeze will last at least 3 years.

The main reason is rising gas and electricity costs. In fact gas and electricity bills are rising twice as fast those in Germany and France. The Organisation for Economic Co-operation and Development (OECD) figures show that the UK's rise is twice that of the European average. The sooner the utilities are brought back into public ownership the better for everyone.

MPs are not worried about their finances and have decided to take a 24-day Christmas break.

Remember to put your lids on all your pans when cooking food to save energy and money.