The current American financial crisis may take Marxist memories back to the Cold War era when they took delight in prophesying doom to American capitalists: 'We shall bury you.'

Karl Marx himself had predicted that 'Capitalism will find its own grave diggers.' However, Marxism was dead and buried much before the current financial crisis but it is likely that there will still be some doddering Marxist pundits now saying, 'we told you so.'

The decision of the Bush administration to make federal intervention to save some of the financial giants now in deep crisis and bail them out with a $750 billion plan goes against the very grain of capitalism. 

On Wednesday night after President Bush made his televised address to the nation, CNN had some Republican Senators protesting that what was being proposed was 'nationalisation',  a concept totally foreign to capitalist thinking and that it was socialism being proposed.

But call it 'nationalisation' or  by any other name, it did appear to even non Americans and those not economists that some form of intervention was called for because the American capitalist system appeared incapable of pulling itself out of the current mess.

Capitalism in trouble

Capitalism is indeed in deep trouble. The 163-year-old doughty defender of capitalism, Britain's Economist had on its cover page the picture of a swirling whirlpool with the fallen American financial giants being sucked into the vortex of the whirlpool. Its editorial said: 'Finance houses set out to be monuments of stone and steel. In the widening gyre the greatest of them have splintered into matchwood. Ten short days saw the nationalisation, failure or rescues of what was once the world's largest insurer with assets of $1 trillion, two of the world's biggest investment banks with combined assets of another $1.5 trillion and two giants of America's mortgage markets with assets of $1.8 trillion. The government of the world's largest capitalist nation had been sucked into the maelstrom of its most important capitalist industry. And it looks overwhelmed.'

President Bush in announcing his administration's rescue plan of $ 750 billion said that 'the government is the only entity that is capable of buying financial firms' troubled assets at their current low prices and holding them until their value returns to normal. A bail out if not approved (by Congress) foreclosures would rise, millions of people could lose their jobs and ultimately the country could experience a long, painful recession.'

Globalisation of the crisis

The crisis could well spill over to foreign markets - and already it has, to Britain.

It could not have come at a worse time for America and President Bush. While the war in Iraq seems to be somewhat easing, in Afghanistan the Taliban is making headway with its attacks on American and NATO forces.

Besides America and its main ally in the region, Pakistan are at loggerheads with American forces making air and ground attacks on Pakistan. More troops are needed on the ground in Afghanistan but American troops are tied up in Iraq and NATO countries are reluctant to send their soldiers to war in Afghanistan where they have minimal interests. More over the crisis is looming ahead of the American presidential elections just a few weeks away.

Presidential candidates

While President Bush does not have any political problems of burdening the American tax payer with $750 billion because  he will be out of office after presidential elections not so the two presidential candidates who are wooing the taxpayer.

Both Barack Obama, the Democratic candidate and John McCain of the Republican Party agree that an immediate bail out of the companies in dire straits is essential but they are also very mindful of the concerns of the public.

McCain faces greater problems in this regard because as a Republican his backing of President Bush's plan would identify him with the President whose popularity is running at an all time low as indicated by opinion polls.

Besides the Republican Party and McCain himself are strongly opposed to government intervention and have championed deregulation.

Obama in his campaign speeches last week said that lax oversight in control permitted these companies to borrow far more than was prudent and their investments had failed. Tougher regulations might have prevented the collapse. Obama recalled that just one week ago McCain has said that he 'was always for less regulation' but now he was calling for stricter regulation without a specific plan.

Obama has been pitching hard into McCain's economic philosophy, with the aggravation of the financial crisis. He has described this as 'a philosophy that says that even common-sense regulations are unnecessary and unwise, and that Americans should stick their heads in the sand and ignore economic problems until they spiral into crises.'

Leadership Conference

McCain's answer earlier was to crackdown on 'reckless conduct, corruption and unbridled greed' but on Wednesday he attempted to upstage Obama by asking President Bush to convene a leadership meeting with Obama and himself. He also said he was ready to halt his campaign events, advertising and fund raising, and return to Washington to reach agreement on the rescue plan. He even called for the postponement of the presidential debate scheduled for Friday.

President Bush himself did respond to this call and summoned a meeting of both candidates along with officials to decide on a rescue plan on Thursday but it failed to produce results. The Republicans were not agreeable to what was proposed because, they 'had not been consulted' reports said

Both candidates want to pose off that their prime interest is the resolution of the problem and not their political agendas but both are politicians running for the most powerful office on Earth. It is very likely that an agreement would be worked out during the weekend or early next week because the time factor is all important.

Those who have frothed and fumed at America for President Bush's adventures in Iraq and Afghanistan would be hoping that the day of reckoning of America is near.

Economic analysts while conceding the problem is serious believe that recovery could be affected, at the worst going into a depression for a long time. Some point out that the country has been lax in supervising the working of capitalist giants.