Nearly one third of the world has fallen into economic depression. Asian countries like Korea, once hailed by U.S. policy makers, face a rising tide of unemployment, as everything from steel mills to hospitals close down. The Japanese economy is shrinking as its government casts about for ways to prop up the country's banks. Now, the crisis is spreading to Latin America.

The Russian people were told that “free markets” and “free enterprise” would bring them the good life. Instead, Russian capitalism is in a state of collapse. Millions of workers are working without pay and more than 10% of the population is unemployed.

Recently, House Banking Chairman Jim Leach recently said that world capitalist system is in the worst shape since the Great Depression of the 1930s.

The growing chaos in the U.S. stock market, layoffs in high technology industries, and government measures to make more money available to the rich, all indicate that the world economic crisis will have a serious impact on the United States.

While we can't foresee how deep this crisis will go, we can predict how the wealthy who rule this country will react. They will do everything possible to shift the burden of the crisis onto the backs of poor and working people.

Corporate fat cats will respond by layoffs, demanding more work for less pay, and attacks on benefits. Their lobbyists will swarm the halls of government looking for bail outs and corporate welfare. In all likelihood, the state budget crises which hit Minnesota and Illinois a few years ago will reappear.

There is no reason for working and poor people to put up with this. And fortunately, over the past few years there has been an upswing in the people's struggle. The strikes at U.P.S., General Motors, and Northwest Airlines demonstrate a renewed militancy on the part of the labor movement. The Million Man, Woman, and Youth marches, coupled with events like the founding of the Black Radical Congress, show new vigor in the movements of oppressed nationalities. Fight backs against attacks on welfare and the strong response to U.S. war moves against Iraq show that many people have already decided enough is enough!

The 90s have been one long party for the well-to-do. If their profits are declining – what do we care? Capitalism benefits the people with Capital, the owners of the big banks and corporations – the very rich. Make them pay for their crisis!

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That said, what is wrong with Wall Street goes a lot deeper than a bunch of crooked CEOs with crooked accountants. WorldCom, Enron and Xerox are the tip of an iceberg – the result of a profound shift in the capitalist climate that unfolded in the 1990's.

Throughout the 90's, Wall Street was bloated by a vast speculative bubble. Companies that could stick all they actually owned into storage locker were suddenly worth millions. High-tech corporations that never made a dime in profits saw the price of their stocks rise to dizzying heights, as investors bet that these corporations were the wave of the future. Venture capitalists, investment firms and mutual fund managers adopted an almost religious belief that the maximum profits would be found by riding the wave of speculation. And capital poured into U.S. markets from around the globe.

This climate gave rise to accounting scandals. Most big corporations are still “overvalued,” even after the meltdown on the high-tech NASDAQ stock exchange. These companies are neither making the kind of money, nor do they have the assets, to justify their stock prices. So, the tendency is to lie. They use “creative accounting” and count the money they spent as the money they made.

Then add on these three other facts. First, that accounting firms are in business to make money. Like Arthur Anderson, they have special consulting departments that design these cons for companies. Second, government regulations are a joke. Foxes and wolves are guarding the hen house. And finally, illegal insider trading – the practice of capitalists inside companies taking advantage of information not available to the public to buy and sell stocks – which is second nature to the elite – and you have a recipe for a crisis in confidence.

This is no small matter. Stocks are worth what people will to pay for them. Since the markets are overvalued, even after the recent downturns; and high stock prices are demand driven, multiplied by money pouring in from abroad; a crisis in confidence means dropping demand. This at least raises the possibility of big drops on U.S. stock exchanges. Already, foreign capital is leaving the U.S. The speed of the departure is accelerated by a rising Euro and a declining dollar.

In the months ahead, the White House will do everything in its power to convince investors big and small to keep their money in Wall Street. There will be talk about reforming the Security and Exchange Commission, new regulations for the accounting firms, and tough talk about the corrupt going to jail. None of these can put an end to the wild swings in the market. Speculation makes for fraud, but curbing fraud does not end speculation. And most investments at this point are investments in speculation – the purchase of overvalued stocks with the hope that more money will come into the market to push the prices still higher.

No one who is truly rich keeps his or her money at home. They use it to make more money – they invest it, searching out the highest rate of profit. Right now, there is a huge amount of overproduction in auto, steel, telecommunications equipment, computer chips and just about anything else that's manufactured. This does not mean that folks like us do not want more cars or computers. We just can't afford them. The big corporations that make these things can produce a lot more than working people can afford to buy. This is the key to the underlying weakness in the economy. It is the rickety foundation that the tower of stock speculation is built on.

In the months ahead, the rich are going to do their best to have working people pay for their problems. There will be more layoffs. With revenues shrinking, government will move to attack public employees and cut back on the programs that serve us. American capitalism has been one big continuous party for wealthy. Now that there is an economic downturn, and the possibility of deepening crisis, the rich should be the ones to pay!

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