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UN climate report calls out global elite as cause of the crisis

Tina Landis

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The UN Emissions Gap Report released on Dec. 9, shows how far off the mark we are for averting complete climate catastrophe. Current global emissions reduction policies have us on track for 3.5 C warming by 2100, which would be catastrophic for life on Earth. An average increase of 1.5 C globally is the line that must not be crossed — with current temperatures at an average of nearly 1 C warming. 

The report takes a surprisingly class perspective by pointing out that the one percent richest people on the planet are responsible for emissions equal to that of the poorest 50 percent of the world’s population. This group would need to reduce its carbon footprint 30 fold just to meet the Paris Agreement commitments. 

Hottest year on record

2020 will likely be the hottest year on record following the record breaking hot decade of the 2010s. With unprecedented monsoon rains, wildfires, hurricanes and tropical cyclones, we are witnessing the unraveling of life on Earth as we know it. And let’s not forget the pandemic, which is the result of the changing climate and human encroachment on wildlands, with official reports of nearly 70 million globally contracting the virus and more than a million dead. 

Arctic ice loss has accelerated so much that scientists are predicting that a new Arctic climate is emerging — moving from one of snow and ice to one of open water and rain. Similarly, scientists are alarmed by the rapid deterioration of the Antarctica ice sheet. Ice loss triggers a positive feedback loop as open water and land absorb more heat, unlike ice and snow that reflect the sun’s rays — meaning ice loss creates more warming, which accelerates more ice loss, and so on. 

A 2015 consumption-based greenhouse gas emissions study of the San Francisco Bay Area — home of Big Tech and the highest concentration of billionaires on the planet — confirms the UN assertion and shows that the areas where the super rich live have by far the highest share of emissions. The study looked at the life-cycle GHG emissions of all products used and consumed within the Bay Area — from production, shipping, use and disposal of those products. This is key in order to assign the appropriate responsibility for emissions, and in turn the crisis that humanity is facing. Instead of pointing the finger at the poorer countries where U.S. corporations have outsourced production to, or poor communities within wealthier nations, tying the emissions back to the source of the highest consumption rates shows a more accurate picture of who truly holds more responsibility for the problem.

Individual behavior change not the solution

The corporate media frames solutions as one of individual behavior change, which really takes the blame off the producers and puts it onto individual lifestyle choices — in essence a mass marketing campaign for “green” products and electric vehicles. This gives the illusion that if we all just fly less, recycle more, and go vegan, the crisis will be averted. While having more environmentally-conscious practices is good, the majority of the population that is just struggling to survive often doesn’t have access to “green” options. This scapegoating of the individual diverts attention away from the true culprit, the capitalist system itself — just 100 companies responsible for 71 percent of emissions since 1988.

What you personally do, doesn’t solve the unsustainability of the production model of capitalism. For instance, the UN report goes on to point out that the dip we have seen in global emissions during the pandemic will not have a positive effect in the long run. The solution goes way beyond driving less for a few months. We need an uprooting of the capitalist production model that is based on the whims of the market rather than sustainable planning. 

The very nature of capitalism that allows billionaires to exist by hoarding the wealth created by the exploited working class, is the source of the problem. A system that requires endless growth and ever increasing profits can never be sustainable. 

The “one percent” are the ruling class of the world — the ones who truly call the shots — controlling corporations and to a large degree, government policy. These capitalists are always looking for ways to profit off of any situation. Whether an investment is good for humanity and the environment is irrelevant. Making the highest profits possible is the only concern. For instance, Wall Street recently began trading water futures making a basic need for human survival into a cynical betting game. This is a perfect example of “disaster capitalism” and reveals the complete disregard for the survival of our species and a complete disinterest in truly addressing the climate crisis. 

We cannot solve this crisis within the trajectory of global imperialism

There are a few relatively simple actions that could be taken that if implemented on a comprehensive scale could lower global temperatures, increase the water table in drought-plagued areas, and increase biodiversity and ecosystem resilience to the changes underway. Restoring forests, wetlands, and grasslands, along with a shift to regenerative agriculture and an end to fossil fuel use, could stem the unraveling of our climate in just decades. Humanity has the tools to save ourselves, but the “one percent” and the system of capitalism that their police, military, courts and prisons protect, is literally driving us off the cliff. 

One glaring omission that the UN climate reports and summits never address is the issue of imperialism. How can we lower global emissions when the imperialists — who are the biggest per capita polluters — consistently block any binding commitments at the climate summits, despite pressure from the Global South? How can we globally work together for our survival when the U.S. and their European allies constantly undermine and reduce to rubble any nation that doesn’t bow to their demands?

For instance, Libya, prior to its destruction in 2011 by the US and NATO, had the highest standard of living on the African continent. Libya had nearly completed the “Great Man-Made River,” the world’s largest irrigation system that was greening the desert, and were creating a Pan-African banking system and currency to bring the continent out of indebtedness to the imperialist-controlled IMF and World Bank. That could have meant true independence for African nations and development based on sustainability. But, the imperialists wreaked total destruction upon Libya, cheered on the lynching of its leader, and bombed the irrigation system, creating a failed state that today has open slave markets trading Black Africans.

We cannot solve the global climate crisis within the current trajectory of world imperialism. We must uproot the system of capitalism and move to a socialist system built on cooperation and sharing of resources. The wealth of the “one percent” must be seized to fund an ecological and social revolution and put the power into the hands of the majority to determine what is needed for the benefit of both people and planet. 

We need to organize ourselves across borders, get educated on the issues, and build a mass militant people’s movement to realize this goal. The time to act is now, to seize control of the car — of the production system — before the capitalists drive us off the cliff. We have the power to stem the climate crisis and take an evolutionary leap forward to a socialist society that meets all of our needs for an equitable and abundant future. 

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The economic crisis and coronavirus

In fighting capitalist exploitation and the war danger, workers will ultimately seek a way out through socialist revolution.

Ella Rule

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As is abundantly obvious, the coronavirus pandemic is wreaking untold damage on the world economy, and on the national economies of every country on the planet.

What the coronavirus has done is to act as the catalyst for the re-emergence with even greater force of the 2008 capitalist crisis of overproduction. The world was already teetering on the brink of economic collapse, and the coronavirus has given it the kick that has sent it spiralling into the abyss.

As Eric Toussaint pointed out in a recent article aptly entitled No, the coronavirus is not responsible for the fall of stock prices:

“Over the past two years, there has been a very significant slowdown in productive sectors. In several major economies such as Germany, Japan (last quarter 2019), France (last quarter 2019) and Italy, industrial production has declined or slowed down sharply (China and the United States).

“Some industrial sectors that had recovered after the 2007-09 crisis, such as the automobile industry, entered into a very strong crisis during the years 2018-19 with a very significant drop in sales and production.

“Production in Germany, the world’s largest car manufacturer, fell by 14 percent between October 2018 and October 2019. Automobile production in the United States and China also fell in 2019, as it did in India. Automobile production will fall sharply in France in 2020.

“The output of another flagship of the German economy, the machinery and equipment producing sector, fell by 4.4 percent in October 2019 alone. This is also the case for the production of machine tools and other industrial equipment.

“International trade has stagnated. Over a longer period of time, the rate of profit has declined or stagnated in material production, and productivity gains have also declined.” (Monthly Review, 4 March 2020)

The reason for this economic slowdown is the crisis of overproduction. There is no point in producing goods that cannot be sold, because goods have already been overproduced to such an extent that the markets are glutted.

“The enormous expansive force of modern industry, compared with which that of gases is mere child’s play, appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance.

“Such resistance is offered by consumption, by sales, by the markets for the products of modern industry. But the capacity for extension, extensive and intensive, of the markets is primarily governed by quite different laws that work much less energetically.

“The extension of the markets cannot keep pace with the extension of production. The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production, the collisions become periodic …

“As a matter of fact, since 1825, when the first general crisis broke out, the whole industrial and commercial world, production and exchange among all civilised peoples and their more or less barbaric hangers-on, are thrown out of joint about once every ten years.

“Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution.

“The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filters off, more or less depreciated in value, until production and exchange gradually begin to move again.

“Little by little the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit and speculation, which finally, after breakneck leaps, ends where it began – in the ditch of a crisis. And so over and over again.” (F Engels, Anti-Dühring, 1877, part 3, chapter 2)

In modern times, the crisis of overproduction expresses itself as a financial crisis, and we have seen over the last two years various bourgeois governments desperately trying to control the economic situation by managing interest levels on government debt.

The canary in the mine of the world economy took the form as far back as last summer of the yield inversion on US treasuries. The US treasury issues two-year bonds (ie, it borrows at interest on the basis that the loan is locked in for two years) as well as ten-year bonds. The interest rate offered on ten-year bonds is normally higher than is paid for short-term loans because it is expected that over time inflation will eat into the value of the holding and higher rates of interest are offered in order to make up for this.

What does it mean when interest rates for short-term bonds become higher than for long-term ones? It indicates that there is an unprecedented rush to acquire long-term bonds because they are seen as a relatively safe form of investment in turbulent times, so it is possible for the government to borrow long-term despite offering relatively low rates of interest.

This only happens when the investors of the world are running so scared that they think their money will be safer in long-term government bonds, despite inflationary depreciation, than it will be anywhere else. This is why:

“When ten-year money is cheaper than two-year money, history is clear: in the US, on every occasion it has prefigured a recession … in the UK a recession has followed on most occasions. Yesterday the two-year yield dropped below the ten-year yield for the first time since 2007 in the US and for the first time since 2008 in the UK.

“It came on the same day that official data showed that Germany, the world’s fourth-largest economy, had shrunk, and as industrial output in China, the world’s second-largest economy, fell to its lowest rate in 17 years. A reasonable analysis is that the global economy is stuttering, or worse.” (Ominous economic conditions may be harbingers of another global recession by Philip Aldrick, The Times, 15 August 2019)

But why were investors running so scared that they caused the yield curve to invert? It was because those who make it their business to study what is happening in the world market very closely could see that there was trouble ahead.

The income that arises from investments comes, in the final analysis, from the profits that are generated by production. If the investor has purchased shares in a company engaged in production, then the return on the shares is directly a share of the profits that company makes. If the investor instead relies on lending money to receive interest, that interest too comes from the surplus value generated in the course of production, but is treated by the producer as a cost of production that reduces his profit, rather than as part of that profit.

Where there is a crisis of overproduction, as a result of which such a glut of products arises that they cannot be sold, then this will result in there being no profit and maybe not even any ability to realise the surplus value created by the exploitation of labour-power. In these circumstances, enterprises are not only unable to pay returns to their investors but may well be forced into insolvency, threatening the investor not only with loss of income but also loss of capital.

It is entirely understandable why investors will run for cover in such situations. And the investors had not failed to notice the economic downturns in Germany and China mentioned by Philip Aldrick above, which were but a small part of the bad news.

A very comprehensive indicator of the downturn in world economic activity was that freight volumes had slumped in Asia and Europe: “The 17.3 percent fall in Singapore’s exports last month [June 2019] was stunning. Shipments are now falling within the US as well.

“The Cass Freight Index dropped to minus 5.3 percent in June. Cass said the breadth of the data indicates ‘the beginning of an economic contraction’.” (Donald Trump’s ballooning fiscal deficit is taking its toll – the government is running out of money by Ambrose Evans-Pritchard, The Telegraph Economic Intelligence, 23 July 2019)

Even more directly: “We learned late last week that corporate profits have been sliding for much longer than supposed. The latest data revision by the US Bureau of Economic Analysis is a bombshell.

“Earnings were revised down 8.3 percent ($188bn) for last year, and 4.4 percent for the year before. We now know that they peaked in 2014 and never recovered. The last leg of America’s equity boom has been built on a statistical mirage.

“Profits are falling again. Blended earnings for the S&P 500 in the second quarter are running at -1.9 percent (year-on-year). Smaller companies in the Russell 2000 have been hit much harder.” (A tantrum awaits if the Fed opts for no more than a ‘one-and-done’ rate cut by Ambrose Evans-Pritchard, The Telegraph Economic Intelligence, 2019)

Of course, once stock prices fall they do attract speculative buyers, which causes a rebound leading to stock exchange gains. This does not, however, reflect the underlying economic activity but is purely based on the ‘irrational exuberance’ of buyers who have nowhere profitable to place their investments and thus inflate a bubble, the fate of which is sooner or later inevitably to burst.

“Bubbles burst when the gap between realised value and promised value becomes too great, and some speculators understand that promises of profitable liquidation cannot be honoured for all. In other words, when financial gains can never be realised for lack of sufficient capital gains in production.” (La baudruche du capital fictif, lecture du capital fictif de Cédric Durand by Jean-Marie Harribey, Les Possibles, No 6, Spring 2015)

The coronavirus pandemic, then, has merely accelerated and aggravated a crisis that was happening already.

As a result of the lockdowns the pandemic has necessitated, overproduction, which had already gone beyond the bounds of what could be managed by bourgeois governments through their economic manipulations, has simply burgeoned into a monstrous giant, causing millions of businesses all over the world to come crashing down and generating millions of unemployed.

In poorer countries, these unemployed people, the vast majority of them extremely poor to start with, have been left to starve. Even in a rich country like Britain:

“Just three weeks into the lockdown, the Food Foundation said that 1.5 million Britons reported not eating for a whole day because they had no money or access to food. Some 3 million people in total were in households where someone had been forced to skip some meals. More than 1 million people reported losing all their income because of the pandemic.” (UK hunger crisis: 1.5m people go whole day without food by Felicity Lawrence, The Guardian, 11 April 2020).

Damage to the world economy

Insofar as could be ascertained, the situation of Britain’s economy is as follows:

“The broad results, taking aggregated sectors of the economy, are that the percentage of output lost during the lockdown will be 14 percent in agriculture, 60 percent in mining and quarrying, 69 percent in manufacturing, 10 percent in electricity and gas supply, zero in water and sewerage, 50 percent in construction, 58 percent in wholesale and retail, 39 percent in transport, 79 percent in accommodation and food services, 7 percent in information and communication, 18 percent in finance and insurance, 20 percent in real estate, 10 percent in professional and scientific activities, 46 percent in education and 81 percent in arts, entertainment and education.

“Adding all these up, and weighting by sector, produces the result that the economy is suffering a 31 percent loss of output, and is thus operating at 69 percent of normal levels.” (Despatches from an economy at two-thirds of normal by David Smith, Sunday Times, 5 April 2020)

As far as the rest of the world is concerned, “Data firm IHS Markit said on Tuesday that its flash US Composite Output Index, which tracks the manufacturing and services sectors, dropped to a reading of 40.5 this month. That was an all-time low and followed a reading of 49.6 in February.

“Last month’s decline in the index, which is seen as a good measure of economic health, was the largest in the series’ history. A reading below 50 indicates contraction in business activity. The survey underscored the rapidly deteriorating economy, highlighted last week by a government report showing the biggest rise since 2012 in the number of Americans filing claims for unemployment benefits during the week ended 14 March.

“Economists are predicting claims will accelerate to a record 1.5 million or more when data for last week is published on Thursday [26 March].

“The message was equally grim from the 19 countries that use the euro. IHS Markit’s flash composite PMI for the eurozone plummeted to a record low of 31.4 in March.

“That was by far the biggest one-month fall since the survey began in mid-1998, and below all forecasts in a Reuters poll that gave a median prediction of 38.8.

“In France, services activity fell to a record low, and manufacturing saw its steepest drop since the global financial crisis more than a decade ago.

“A PMI for the services sector in Germany, Europe’s largest economy, showed a record contraction in activity, while sister surveys showed Britain’s economy shrinking at a record pace.

“IHS Markit said the March figures suggested that the eurozone economy was shrinking at a quarterly rate of around 2 percent, and the escalation of measures to contain the virus could steepen the downturn.” (Coronavirus pandemic battering global economy by Leigh Thomas and Lucia Mutikani, Reuters, 24 March 2020)

For the working class, this means: “Unemployment in Britain and the US could surpass the levels reached during the 1930s Great Depression within months as the coronavirus crisis crushes the global economy, a former Bank of England official has warned.

“In a stark forecast as job losses mount around the world, David Blanchflower, professor of economics at Dartmouth College in the US and a member of the bank’s interest rate-setting monetary policy committee during the 2008 financial crisis, said unemployment was rising at the fastest rate in living memory.

“Writing in the Guardian, the economist said UK unemployment could rapidly rise to more than 6 million people, around 21 percent of the entire workforce, based on analysis of US job market figures that suggest unemployment across the Atlantic could reach 52.8 million, around 32 percent of the workforce.” (Unemployment in US and UK ‘may be worse than in Great Depression’ by Richard Partington, The Guardian, 3 April 2020)

And: “Given the large fall in output, unemployment is expected to rise sharply even though many countries have adopted job retention programmes to keep employees attached to their places of work. As a result, incomes per person are expected to fall in nine in 10 of the IMF’s 189 member countries.

“In the US, unemployment is expected to rise from 3.7 percent in 2019 to 10.4 percent this year and only dip to 9.1 percent in 2021. There is likely to be a smaller rise in the eurozone from 7.6 percent last year to 10.4 percent this year and 8.9 percent in 2021” (World economy set for heaviest blow since Great Depression by Chris Giles, Financial Times, 14 April 2020)

The situation in poor countries that cannot afford to support the unemployed very much, if at all, is of course far worse:

“African economies are already facing an impending global economic downturn, plummeting oil and commodity prices and an imploding tourism sector …

“Under what the AU researchers deemed their realistic scenario, Africa’s economy will shrink 0.8 percent, while the pessimistic scenario said there would be a 1.1 percent dip …

“The impact on employment will be dramatic.

“‘Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues,’ the analysis said …

“African governments could lose up to 20 to 30 percent of their fiscal revenue, estimated at $500bn in 2019, it found.

“Exports and imports are meanwhile projected to drop at least 35 percent from 2019 levels, incurring a loss in the value of trade of around $270bn. This at a time when the fight against the virus’s spread will lead to an increase in public spending of at least $130bn.

“Africa’s oil producers, which have seen the value of their crude exports plunge in past weeks, will be among the worst hit.

“Sub-Saharan Africa’s biggest oil producers Nigeria and Angola alone could lose $65bn in income. African oil exporters are expected to see their budget deficits double this year while their economies shrink 3 percent on average …

“African tourist destinations will also suffer.

“Africa has in recent years been among the fastest growing regions in the world for tourism. But with borders now closed to prevent the disease’s spread and entire airlines grounded, the sector has been almost entirely shut down.

“Countries where tourism constitutes a large part of GDP will see their economies contract by an average of 3.3 percent this year. However, Africa’s major tourism spots Seychelles, Cape Verde, Mauritius and Gambia will shrink at least 7 percent.” (Some 20 million jobs in Africa at risk from coronavirus impact, study shows, France 24, 5 April 2020)

In Africa, as in India, where the poor were suffering food insecurity even before the coronavirus lockdowns, the problems of obtaining food when having no wages while prices are rising will clearly intensify, and are bound to cause more deaths than does the virus.

It is because of the capitalist system that the pandemic is so devastating

It might be thought that a virus is no respecter of economic systems and that it would attack capitalism and socialism alike – but that is not so. The ongoing destructive contradiction in capitalist societies is that while production is social, appropriation is private, and it is precisely this contradiction that is leaving society without strong defences against pandemic.

It must be pointed out that the eventual outbreak of a pandemic had been foreseen for years.

“The Times can reveal that the Cabinet Office first identified that a pandemic would lead to a ‘pinch point’ in the availability of PPE for doctors more than a decade ago.

“Simulations of flu-like pandemics were carried out by trusts in 2007-08 to help them plan for the possibility of new outbreaks across the country. Health service resilience chiefs were instructed by the Cabinet Office to factor access issues with protective kit in to their planning assumptions.

“Russell King, a resilience manager in the NHS at the time, said: ‘The Cabinet Office had identified the availability and distribution of PPE as a pinch point in a pandemic … It was already part of the national assumption.’

“The fact that PPE availability issues were previously predicted is likely to raise questions over why more robust contingency plans were not put in place.” (Shortage of masks for NHS staff foreseen over a decade ago by Kat Lay and Lucy Fisher, The Times, 31 March 2020)

A damning report in the Sunday Times, whose thrust was to ask why Boris Johnson was generally absent at meetings early on in the crisis when important decisions needed to be made, also revealed the gross negligence on the part of British governments when the lack of preparedness for a pandemic was again made abundantly clear just four years ago:

“The last rehearsal for a pandemic was a 2016 exercise codenamed Cygnus, which predicted the health service would collapse and highlighted a long list of shortcomings – including, presciently, a lack of PPE and intensive care ventilators.

“An equally lengthy list of recommendations to address the deficiencies was never implemented …

“In the year leading up to the coronavirus outbreak key government committee meetings on pandemic planning were repeatedly ‘bumped’ off the diary to make way for discussions about more pressing issues such as the beds crisis in the NHS. Training for NHS staff with protective equipment and respirators was also neglected …

“Members of the government advisory group on pandemics are said to have felt powerless. ‘They would joke between themselves: “Ha-ha, let’s hope we don’t get a pandemic,” because there wasn’t a single area of practice that was being nurtured in order for us to meet basic requirements for a pandemic, never mind do it well,’ said a source.”

The question why nothing was done can only raise a hollow laugh. Everybody knows that the NHS has been grossly underfunded for decades, partly owing to Britain’s capitalist governments being reluctant to pay very much for it, and partly owing to the fact that the privatisation measures introduced piecemeal over the last 30 years have exposed the service to profiteering private companies, while the ‘internal markets’ introduced between various departments of the service by successive governments led to a proliferation of well-paid administrators, leaving less and less of the NHS’s income available for the provision of medical services.

Moreover, it was perfectly foreseeable that in the event of a pandemic there would be a terrible shortage of beds, including intensive care beds, yet the NHS was being forced to close ward after ward in the interests of economy – to such an extent that it was having trouble in coping with the annual influx of flu patients, and was obviously in no position to deal with a pandemic.

The failure to fund public services properly was of course aggravated by the austerity measures adopted by bourgeois governments all over the world to help capitalism recover from the 2008 financial crash. This saw huge government borrowing to save the banks from collapse followed by the same governments seeking to recover the cost by decimating public services and welfare provision.

The contradiction between social production and private appropriation

Naturally, if Britain had been a socialist country in which all major means of production were state-owned, and all major production and distribution of products was planned, along with planned decisions regarding what part of production should be held back for expansion and what part to cover serious emergencies, it would never have suffered a crisis of overproduction, which is purely a capitalist phenomenon, and would therefore never had to suffer the years of austerity – just as the Soviet Union in the 1930s was untouched by the economic crisis that was ravaging the economies of all capitalist countries but was instead able to expand its economy exponentially year after year.

If an exercise like Cygnus had highlighted shortcomings that needed to be addressed, addressed they would have been.

Moreover, to the extent that a pandemic would necessitate extra resources that had not been planned for, and require measures to make good the loss of production generated by any necessary lockdown, the government would not need to borrow from the moneybags but would simply make available what was necessary from its own resources.

In a capitalist economy, all the surplus production over and above what people consume belongs to private owners, the capitalists, whose only interest is to use that wealth to make more money, by expanded production if possible or if not by lending at interest or through speculation.

In a socialist society, that surplus stays in the hands of the proletarian state, which holds it exclusively for the benefit of the population – in other words, there is both social production and social appropriation and no toxic contradiction between the two.

As Josef Stalin explained:

“The basis, the cause, of economic crises of overproduction lies in the capitalist system of economy itself. The basis of the crisis lies in the contradiction between the social character of production and the capitalist form of appropriation of the results of production.

“An expression of this fundamental contradiction of capitalism is the contradiction between the colossal growth of capitalism’s potentialities of production, calculated to yield the maximum of capitalist profit, and the relative reduction of the effective demand of the vast masses of the working people, whose standard of living the capitalists always try to keep at the minimum level.

“To be successful in competition and to squeeze out the utmost profit, the capitalists are compelled to develop their technical equipment, to introduce rationalisation, to intensify the exploitation of the workers and to increase the production potentialities of their enterprises to the utmost limits. So as not to lag behind one another, all the capitalists are compelled, in one way or another, to take this path of furiously developing production potentialities.

“The home market and the foreign market, however, and the purchasing power of the vast masses of workers’ and peasants who, in the last analysis, constitute the bulk of the purchasers, remain on a low level. Hence overproduction crises.

“Hence the well-known results, recurring more or less periodically, as a consequence of which goods remain unsold, production is reduced, unemployment grows and wages are cut, and all this still further intensifies the contradiction between the level of production and the level of effective demand.

“Overproduction crises are a manifestation of this contradiction in turbulent and destructive forms.

“If capitalism could adapt production not to the obtaining of the utmost profit but to the systematic improvement of the material conditions of the masses of the people, and if it could turn profits not to the satisfaction of the whims of the parasitic classes, not to perfecting the methods of exploitation, not to the export of capital, but to the systematic improvement of the material conditions of the workers and peasants, then there would be no crises.

“But then capitalism would not be capitalism. To abolish crises it is necessary to abolish capitalism.” (Report to the 16th party congress, 1930)

Borrowing

As it is, the capitalist ‘solution’ to crisis – this crisis as much as any other – is to borrow from the moneybags and pay them back, with interest, at the expense of the working-class masses.

Since the government already has massive debts, and lacks the resources that the government of a socialist country would have at its disposal, it can only finance the extra resources needed to surmount the pandemic by borrowing.

It needs to borrow in order to ensure that furloughed workers deprived of wages will not starve. It needs to borrow to provide money to at least some businesses so that they will still exist to restart the economy once the crisis is over. It needs to borrow to acquire the equipment necessary to combat the virus – ventilators, PPE, testing kits.

And the sums involved have been enormous:

“The chancellor Rishi Sunak has announced a £350bn package of loans and grants to help Britain cope with the lockdown of large parts of the economy, as he warned the country was facing a threat to its prosperity unmatched in peacetime.

“Less than a week after pledging £12bn in his budget to soften the impact of the Covid-19 pandemic, the chancellor admitted that the measures were insufficient to tackle the savage blow to growth and stressed he would do ‘whatever it takes’ to see the UK through the crisis …

“The chancellor said the government would provide £330bn of loan guarantees – with more available if needed – to help businesses pay their bills during the crisis and top up the £12bn budget stimulus with a further £20bn of spending.

“Sunak said that every business in the hard-hit retail, leisure and hospitality sector would have a year-long holiday from paying business rates, with smaller companies also eligible for a cash grant of up to £25,000.

“On a day on which one analyst predicted the economy would shrink by 15 percent in the second quarter of 2020, the chancellor also announced cash grants of £10,000 for the UK’s 700,000 smallest companies, and a three-month moratorium on mortgage payments for homeowners in difficulty as a result of the coronavirus.” (‘Whatever it takes’: chancellor announces £350bn aid for UK businesses by Heather Stewart, The Guardian, 17 March 2020)

Following the announcement of the rescue package for business, the chancellor went even further, announcing relief for workers too:

“The government is to pay the wages of millions of workers across Britain to keep them in jobs as the economic fallout from the coronavirus outbreak escalates.

“In an unprecedented step for the British government, the chancellor, Rishi Sunak, said the state would pay grants covering up to 80 percent of the salary of workers if companies kept them on their payroll, rather than lay them off as the economy crashes. The extraordinary payments will be worth up to a maximum of £2,500 per month, just above the median income …

“The chancellor also announced measures to strengthen the benefits safety net for people out of work, increasing the value of universal credit and tax credits by £1,000 a year to help more than 4 million vulnerable households across the country, in a package worth £7bn.

“He also earmarked £1bn of extra support for renters, ramping up housing benefit and universal credit so the local housing allowance will cover at least 30 percent of market rents in a local area.” (UK government to pay 80 percent of wages for those not working in coronavirus crisis by Richard Partington, The Guardian, 20 March 2020)

A capitalist solution

Borrowing and printing money are the only ‘solutions’ available to a capitalist – ie, a market – economy in a situation of crisis – as we have seen in connection with both world wars as well as during the economic crises of the 1930s and of 2008.

The present crisis presents no exception:

The loans being contracted by capitalist governments to help them ride the tide of this crisis are breathtaking:

“The increase in borrowing by governments around the world as a result of the coronavirus pandemic will be ‘massive’, the IMF said on Wednesday [15 April], forecasting that population lockdowns and economic contractions would push budget deficits to well above peak levels during the financial crisis.

“Globally, net public debt will rise from 69.4 percent of national income last year to 85.3 percent in 2020, the IMF said, raising concerns about the willingness of the private sector to finance governments with chequered records in servicing their borrowings.

“In its first attempt to quantify the scale of the damage caused to public finances by coronavirus, the fund provisionally forecast that global public deficits will climb by 6.2 percentage points this year to reach 9.9 percent of national income, topping levels seen in 2008-9 …

“In low-income developing countries, the average interest bill on government debt stood at 20 percent of tax revenues in 2019. The IMF expects this to rise to more than 30 percent of revenues this year, highlighting the financial squeeze many governments are facing.” (Governments face ‘massive’ rise in public debt, IMF warns by Chris Giles, Financial Times, 15 April 2020)

Specifically, “Britain’s national debt will jump from 85.4 percent of GDP to 95.8 percent by 2021 as borrowing quadruples to 8.3 percent of GDP this year to pay for the emergency.” (Tax rises and spending cuts must be on post-pandemic agenda, says IMF by Philip Aldrick, Financial Times, 15 April 2020)

“The fund forecast that deficits will rise sharply across the world. In the US, the public sector deficit will surge from 5.8 percent of national income in 2019 to 15.4 percent this year with net public debt rising from 84 percent of national income to 107 percent, it projected” (Chris Giles, op cit)

We have seen the crushing effects of the debt burdens generated by those crises, most recently by the years of austerity that followed the financial crisis of 2008, which disproportionately disadvantaged the poorest in society.

However, if the running up of debt represents a bleak future for the working class of relatively wealthy countries, for poorer countries the bleakness is now. It is hard for them to find lenders willing to risk lending to entities that show no prospect of being ever able to repay the debt. Largely because a huge proportion of their income is already earmarked to cover the servicing of existing debts:

“Several middle-income countries currently spend 20 percent or more of their revenues on debt service, which crowds out much-needed health, education, and infrastructure expenditures,” pointed out the Brookings Institute in a highly informative article (Africa needs debt relief to fight Covid-19 by Ngozi Okonjo-Iweala et al, 9 April 2020)

It was reported last year that in Nigeria, debt servicing was consuming over half its revenue, “leaving little to build badly needed infrastructure and grow the economy”. (Anthony Osae-Brown and Tope Alake, Bloomberg, 28 August 2019).

** At a time when in the US and Europe banks were paying little or nothing on deposits, Nigeria and other oppressed countries were required to pay 10 percent interest on their debts, representing a massive flow of wealth from these countries to the centres of imperialism, leaving them unable to provide, among other things, anything like adequate medical services even before the pandemic struck.

It follows that these countries are going to be far less able to contain the spread of the virus since their existing facilities are abysmal and they will be unable to borrow in the way the governments of imperialist countries are being forced to do to protect their people and their enterprises.

Yet so long as the virus is rampaging unchecked over Africa it remains a threat to the rest of the world. As a result, even some bourgeois media have recognised that debt relief to poor countries will be an essential measure for combatting the virus: in calling for debt relief for Africa, the Brookings Institute (op.cit.) has recognised that “The global health system is only as strong as its weakest link: Success in combating the pandemic in any country will be short-lived until every country succeeds”. For what it’s worth, the Brookings Institute (op.cit.) has called for a two-year standstill on all African external debt repayments, both internal and external. It remains to be seen whether even this paltry concession will be made.

Socialist revolution is the only way out!

For any country that had had its socialist revolution and established a socialist planned economy, the pandemic would of course still have caused severe disruption. It would become difficult or impossible to fulfil the plan, and therefore difficult or impossible to deliver to the population the goods and benefits that the plan had envisaged them receiving, and difficult or impossible until the pandemic died down to expand the economy in order to be able to deliver greater benefits to the working population in the future. It would be a serious setback. What there would not be, however, is the expectation of years of deprivation after the crisis was over.

What would not be lost is gallons of milk or tons of farm produce that is destroyed rather than be distributed because this can only be done at a loss. Incredible but true is the fact that in rich capitalist Britain:

“Dairy farmers across the UK are having to dump tens of thousands of gallons of milk due to a massive slump in demand caused by the coronavirus pandemic.

“With restaurants and coffee shops closed the demand from the food service industry has plummeted by as much as 50 per cent.

“Dairy distributors have failed to turn up to collect supplies as their processing plants are full and they have reached their storage capacity.

“Industry experts believe as many as 300 farmers have had to dispose of milk as the produce can no longer be stored” (Chaos in the dairy industry by Paul Thompson, Daily Mail, 7 April 2020).

This is happening just as hundreds of thousands of British people are going hungry.

Meanwhile, it has been estimated that in the United States too some 40 percent of food produced is never eaten – and not because of any shortage of people who need to eat more and better but because there is no profit to be made (see Food Matters: Food Waste).

In a planned economy such absurdity and on such a vast scale could not happen in the absence of deliberate criminal sabotage (that would be promptly dealt with). But such absurdity is an unavoidable and permanent feature of the capitalist system, which only worsens as capitalism continues to degenerate.

In a planned economy, those workers who are no longer required for work in their regular place of work because of lockdown can readily be deployed to perform the extra tasks imposed on society because of the crisis – eg, from delivering supplies to the elderly, to tending to the sick, to planning and delivering the means of carrying on useful and satisfying activities for those marooned in their homes. Their human ingenuity is in no way hampered by any need to ‘turn a profit’.

Enterprises that have to be closed for the duration of the pandemic will all be able to reopen as soon as it is safe to do so, without any having succumbed to bankruptcy as a result of unpaid debts, since there will never be rent to be paid to landlords, and their raw materials are allocated under the state plan so no debt arises in respect of them.

Wages are taken care of by the state, which owns all the output of every enterprise and distributes it according to the state plan.

In socialist economies that are not market driven, there is no bar whatever for people getting back to work once the crisis is over, and they do so with great enthusiasm to rebuild the system that in normal times enables them to work successfully for the common good and improved living standards year after year.

The bourgeois media are apt sourly to proclaim that their success in rebuilding their economy is due to a lack of ‘democracy’, which allegedly enables socialist governments to achieve results simply by issuing orders that are instantly obeyed.

For the vast majority of people all over the world, however, there is nothing ‘democratic’ about starving because they are trapped in a dying economic system. There is nothing ‘democratic’ about being caught up in the wars that the capitalist system periodically and inevitably engenders.

There is nothing ‘democratic’ about having one’s health and wellbeing endangered by austerity drives or by capitalist ravages of the environment.

Socialism is genuinely democratic, in that it subjects nobody to the vagaries of market forces but mobilises everybody to participate in the decisions that affect the community as a whole through the Soviet system of participative democracy, which gives every citizen a genuine share of political power, not just a vote every five years for who is to represent the interests of capital in parliament.

Danger of war

It is important to remember that much as the coronavirus epidemic is in the forefront, the determining economic factor is in the background – ie, the growing economic crisis. And as Stalin said in connection with the economic crisis of the 1930s:

“There can be no doubt whatever that owing to the developing crisis, the struggle for markets, for raw materials and for the export of capital will grow more intense month by month and day by day. Means of struggle: tariff policy, cheap goods, cheap credits, regrouping of forces and new military-political alliances, growth of armaments and preparation for new imperialist wars, and finally – war.” (Report to the 16th party congress, August 1930)

And nine years later, war there was. In our day, the sabre-rattling against Russia and China is constantly getting louder, threatening another world war to add to the various local wars going on in various disparate countries, behind each of which stand imperialist interests.

Stalin went on to mention that there was one branch of industry that was not curtailed by the crisis, and that was the armaments industry, which was “growing continuously, notwithstanding the crisis.

“The bourgeois states are furiously arming and rearming. What for? Not for friendly chats, of course, but for war. And the imperialists need war, for it is the only means by which to redivide the world, to redivide markets, sources of raw materials and spheres for the investment of capital.”

Who can fail to have noticed that once again the crisis is leading the world in the same direction?

The way ahead

In the circumstances, we must insist, in the interests of humanity, on debt relief for households, for productive businesses and for governments – especially the governments of oppressed countries.

There is already far too much starvation and misery in a world capable of producing enough to meet everybody’s needs for it to be any way acceptable to allow its proliferation.

But we must never forget that the basic reason for this scourge is that humanity has not moved on to the next stage of its development – the socialist stage, when class divisions cease to exist, where exploitation of one person by another and one country by another is no longer tolerated, and humanity everywhere is able at all times to cooperate for mutual benefit.

Humanity is still suffering torments because it has not let go of the past; it has not embraced its future and is still in thrall to the interests of the powerful minority classes that continue to benefit from the obsolete exploitative economic system that is capitalism.

An important outcome that is much to be desired from this crisis, however, is that the masses everywhere will be left with the realisation they have no choice but to reach out for the only real solution to the major problems today facing humanity (hunger, war and ecological destruction), and follow the people of the former Soviet Union along the path of the October Revolution.

In the words of Stalin, the world economic crisis “means, lastly, that the proletariat, in fighting capitalist exploitation and the war danger, will seek a way out through revolution”.

Posted in Health, WorldComments Off on The economic crisis and coronavirus

«Global Cybersecurity and Russia’s International Initiatives on Combating Cybercrime»

by Sergey Lavrov

VOLTAIRE NETWORK 

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The coronavirus pandemic, which has changed the lives of billions of people within a matter of several weeks, has become a real test for humankind. It is impossible to say with any degree of certainty when the pandemic will end. It would be logical in this situation to digitalise many aspects of everyday life, including state governance, business activities and education. The sphere of international ties has responded to this trend as well. It therefore makes perfect sense that ensuring reliable international information security (IIS) has moved to the top of the global agenda.

The situation in this sphere is far from ideal. Moreover, the international community is facing a real cyber pandemic, which can be seen not just in the invasion of the privacy of ordinary people throughout the world. We are deeply concerned about acts of cyber terrorism, that is, the increased number of hacking attacks on healthcare, fiscal and education establishments and international organisations recorded during the pandemic. Cyberattacks, which have been identified by the World Economic Forum (WEF) as one of top five global risks, are threatening the successful operation and very existence of entire industries. The figures are self-explanatory. According to the WEF, in 2019 alone the cost to the economy of cyberattacks was $2.5 trillion and the figure could reach $8 trillion by 2022.

Information and communication technology (ICT) is being widely used to interfere in the internal affairs of sovereign states. Some countries are openly discussing their alleged right to deliver preemptive cyber strikes on their potential adversaries, including their critical infrastructure.

The absence of a universal international code of conduct in the cyber sphere is jeopardising the sustainable socioeconomic, scientific and technical development of absolutely all states without exception. Humankind risks being drawn into a dangerous large-scale cyber confrontation, which could not be limited to any local area due to the cross-border nature of modern communications and the interdependence of national economies.

It is high time the international community drew the necessary conclusions about the use of ICT for regulating state cyber activities in a civilised manner, without hindering progress or infringing on fundamental human rights and freedoms.

Russia’s guidelines for supporting IIS take into account all aspects of this problem. We distinguish three groups of threats: military-political, terrorist and criminal ones.

It bears repeating that more than 20 years ago, in 1998, speaking at the United Nations, Russia was the first to warn the world about the risks posed by cyberspace, then in its early development, and to propose specific solutions for countering those risks. Our stance remains unchanged today and is as follows:

– All states without exception must be involved in resolving and discussing this global problem. It is also important to consider the opinions of other stakeholders (businesses, civil society and the scientific community);

– It is only possible to find a universal solution through talks under the auspices of the United Nations;

– The main objective of these negotiating efforts is to prevent conflict in the information space and to ensure that information and communications technologies are used solely for peaceful purposes. In this context, it becomes increasingly important to promptly reach agreement on rules of responsible conduct for countries to secure, in the digital environment, the principles of respect for sovereignty, non-interference in domestic affairs, non-use of force or threat of force, the right to individual and collective self-defence, respect for the primary human rights and freedoms, and equal rights for all states to participate in internet governance.

Unfortunately, a number of countries oppose this inclusive course with a different logic that substitutes fighting for equal and indivisible cybersecurity with a barely disguised intention to impose its own rules. In this way, they wish to preserve their technological advantages and continue taking unilateral coercive measures when it comes to ICT, and to ultimately arrogate the right to assign responsible parties in cyber incidents. Eventually, all this could turn the global information space into a new battleground.

For example, some are strongly against developing international legal instruments that would prevent the use of information technologies for strictly military and political purposes and would clarify which cyberattacks could be qualified as an armed assault and, therefore, be subject to Article 51 of the UN Charter on countries’ right to self-defence. They do not support the idea of strengthening the role of this world organisation in regulating political issues related to the use of information and communication technologies, including the establishment of international cyber arbitration or another permanent body dealing with international information security under its aegis. They deny the importance of involving the UN Security Council in analysing and settling international incidents and conflicts related to the use of ICT. They dispute the right of countries to sovereignty in ensuring national information security and over the information and communication infrastructure located on their territory.

With this in mind, it is particularly telling that Russia’s principled approaches are the ones being most widely supported in the world. The 73rd session of the UN General Assembly in 2018 adopted our resolution by an overwhelming majority of votes. The resolution not only outlined an initial list of rules of conduct for countries in the information space but also created an effective negotiation mechanism under the auspices of the UN in the form of an ad hoc working group with an open composition to find practical solutions to the international information security issue.

Acting on a parallel track, Russia initiated the drafting of a comprehensive international convention to counter the use of information and communication technology for criminal purposes within the UN framework. In this context, a draft resolution Countering the Use of Information and Communication Technologies for Criminal Purposes was submitted to the 74th session of the UN General Assembly. In all, 47 states co-sponsored the document. Approved by most Asian, African and Latin American countries, the resolution called for the establishment of an ad hoc intergovernmental expert committee with an open composition to draft the above-mentioned convention, with due consideration for existing international documents, as well as national and regional efforts to fight cybercrime.

The international community’s receptivity to the Russian initiative shows that the conclusion of such an agreement is a demand of the times, an awareness of a new reality linked with the rapidly increasing role of the information and communication technology and the challenges arising in this connection.

Russia will continue working to expand bilateral and multilateral cooperation on the entire range of topical matters of international information security, including in the interests of countering threats that arise during the large-scale use of the information and communication technology for military and political purposes. Our priorities include efforts to help draft and approve international acts regulating the use of the principles and norms of international humanitarian law in this area, the creation of favourable conditions for establishing an international law regime for the non-proliferation of information weapons, the drafting and implementation of multilateral programmes helping overcome information inequality between industrial and developing countries.

We are urging our partners to borrow the best aspects of the relevant experience for uniting the international community against the coronavirus pandemic and to creatively use this know-how in the cybersphere. It is important not to shelve pressing matters, not to engage in a political tug-of-war, but to focus on practical work and to pool efforts.

We are convinced that the 75th anniversary session of the UN General Assembly, opening in September, is called on to become a good opportunity for creating the foundations of an effective system of international information security. We hope that its participants will contribute to this work while developing solutions aimed at ensuring a stable post-COVID future for humankind.Sergey Lavrov

Posted in Russia, WorldComments Off on «Global Cybersecurity and Russia’s International Initiatives on Combating Cybercrime»

Saluting WWII Heroes on the 70th anniversary of V-Day (Pt. 1)

Donald Gallegos

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The “Fighting Girlfriend”

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Mariya Oktyabrskaya

In April of 1943, 38-year-old Ukrainian Mariya Oktyabrskaya (originally from a peasant family in the Crimean Peninsula) learned that her husband had been killed on the eastern front two years before. The devastating news angered her to a point where to vent her rage she sold all her possessions and used the money to buy a T-34 medium tank for the Red Army on the condition that she’d be the driver.

After five months of training, Oktyabrskaya and her tank, the “Fighting Girlfriend,” joined the 26th Guards Tank Brigade near Smolensk, Russia. On October 21, 1943, Oktyabrskaya and her tank took part on an assault on the German lines. Any impression that the “Fighting Girlfriend” was merely a propaganda ploy or a stunt were swept away when she smashed Nazi machine gun nests and artillery pieces to smithereens.

On several occasions when Oktyabrskaya’s tank was damaged she would jump out and make repairs to get her crew back in the fight. Oktyabrskaya’s luck ran out in the village of Shvedy near Vitebsk while, when crushing German trenches and machineguns, her tank was hit by an anti-tank shell. After repairing the tank’s tracks a shell exploded near Oktyabrskaya and she was hit in the head with shrapnel. She remained in
a coma for two months before dying on March 15, 1944.

Mariya Oktyabrskaya was posthumously awarded the title Hero of the Soviet Union.

Mikhail Devyatayev
Mikhail Devyatayev

Escaping from the Nazis in a Nazi bomber

When 27-year-old Mordovian Senior Lieutenant Mikhail Devyatayev (from the Romanian speaking minority in the Western USSR) bailed out of his burning aircraft, he hit the plane’s stabilizer, knocking himself unconscious. Landing in German held territory, he was soon captured. After being held first at the Łódź concentration camp in Poland, then later the Sachsenhausen concentration camp in Germany, Devyatayev knew being an ace pilot put his life in danger, so he managed to trade identities with a dead Soviet infantryman.

With his new identity Devyatayev was transferred to a camp in Usedom, an island in the Baltic Sea, working as part of a forced labor crew for the German missile program, repairing runways and clearing unexploded bombs by hand. It was there that he along with other Soviet nationals became convinced that it would be better to die trying a daring escape than die as prisoners.

So, on February 8, 1945, Devyatayev and nine other Soviet POWs went to work on the runway where one member of the group killed the guard with a crowbar and stripped him of his uniform. Devyatayev, the only pilot among them, lead them to the hangar where they stole the camp commandant’s Heinkel Bomber.

Flying east, the escapees evaded German fighters and landed in Soviet territory. The escapees provided crucial information about the German missile program, including the V-2 rocket, the first man-made object to cross the boundary of space. However, Soviet law enforcement thought it was impossible that prisoners could have taken over an airplane and escaped without cooperation from the Germans. Believing the escapees to be spies, Devyatayev and the others spent the remainder of the war in penal military units or prison.

Later when the head of the Soviet Space Program, Sergey Korolyov, personally argued that the Soviet space program owed its efforts to the information provided by Mikhail Devyatayev and the other escapees, Devyatayev’s name was finally cleared.

On August 15, 1957, Devyatayev, the youngest of 13 children born to a Mordovoan peasant family, became a Hero of the Soviet Union and an honored citizen of the Mordovian Autonomous Socialist Soviet Republic. Within months, the USSR launched the first ever artificial satellite into Earth orbit. Devyatayev died in 2002 at the age of 85.

Lethal Soviet “Night Witches”

On October 8, 1941, Joseph Stalin ordered the creation of three all-women’s aviation regiments. One in particular, the 588th Night Bomber Regiment, became more famously known by their World War II Gernman nickname, Nachthexen, or Nightwitches (pictured above). From June 1942 to May 1945 the 588th flew nonstop missions. One woman, Nadezhda Popova, flew 18 missions in one night.

In a war where the latest technology was applied to the weapons of war, the 588th were given Polikarpov Po-2 biplanes to fly, usually used for training or crop-dusting. The light Po-2s were held together with wood, wire, and fabric, carried no guns or parachutes, and only had a cruising speed of 68mph and maximum speed of 98mph. Often when the plane went in for an attack the pilot would bring the engine to an idle or shut it off completely to silently glide in to drop six bombs at a time. The bombardier would then have to climb out to crank-start the engine in midair.

For their bravery on the Taman peninsula, during the battle of the Caucuses, the 588th Night Bomber Regiment was renamed the 46th Taman Guards Night Bomber Regiment. Together, they flew 24,000 sorties and dropped over 23,000 tons of bombs on the invaders. At its height, the 588th/46th Taman Guards numbered forty pilots, thirty were shot down. None were captured. Twenty three were awarded the title Hero of the Soviet Union.

Posted in Europe, Politics, WorldComments Off on Saluting WWII Heroes on the 70th anniversary of V-Day (Pt. 1)

Was COVID-19 a Cover for an Anticipated or Planned Financial Crisis?

The internationalization of increased unemployment and poverty brought about in the name of combating the corona crisis is having the effect of further widening the polarization between rich and poor on a global scale.

By Anthony Hall

Latin America

A major sign of financial distress in the US economy kicked in in mid-September of 2019 when there was a breakdown in the normal operation of the Repo Market. This repurchase market in the United States is important in maintaining liquidity in the financial system.

Those directing entities like large banks, Wall Street traders and hedge funds frequently seek large amounts of cash on a short-term basis. They obtain this cash from, for instance, money market funds by putting up securities, often Treasury Bills, as collateral. Most often the financial instruments go back, say the following night, to their original owners with interest payments attached for the use of the cash.

Screenshot: Bankrate.com

In mid-September 2019 the trust broke down between participants in the Repo Market. The Federal Reserve Bank of New York then entered the picture making trillions of dollars available to keep the system for short-term moving of assets going. This intervention repeated the operation that came in response to the first signs of trouble as Wall Street moved towards the stock market crash of 2008.

One of the major problems on the eve of the bailout of 2008-09, like the problem in the autumn of 2019, had to do with the overwhelming of the real economy by massive speculative activity.

The problem then, like a big part of the problem now, involves the disproportionate size of the derivative bets. The making of these bets have become a dangerous addiction that continues to this day to menace the viability of the financial system headquartered on Wall Street.

By March of 2020 it was reported that the Federal Reserve Bank of New York had turned on its money spigot to create $9 trillion in new money with the goal of keeping the failing Repo Market operational.

The precise destinations of that money together with the terms of its disbursement, however, remain a secret. As Pam Martens and Russ Martens write,

Since the Fed turned on its latest money spigot to Wall Street [in September of 2019], it has refused to provide the public with the dollar amounts going to any specific banks. This has denied the public the ability to know which financial institutions are in trouble. The Fed, exactly as it did in 2008, has drawn a dark curtain around troubled banks and the public’s right to know, while aiding and abetting a financial coverup of just how bad things are on Wall Street.

Looking back at the prior bailout from their temporal vantage point in January of 2020, the authors noted

 “During the 2007 to 2010 financial collapse on Wall Street – the worst financial crisis since the Great Depression, the Fed funnelled a total of $29 trillion in cumulative loans to Wall Street banks, their trading houses and their foreign derivative counterparties.”

The authors compared the rate of the transfer of funds from the New York Federal Reserve Bank to the Wall Street banking establishment in the 2008 crash and in the early stages of the 2020 financial debacle. The authors observed, “at this rate, [the Fed] is going to top the rate of money it threw at the 2008 crisis in no time at all.”

The view that all was well with the economy until the impact of the health crisis began to be felt in early 2020 leads away from the fact that money markets began to falter dangerously in the autumn of 2019. The problems with the Repo Market were part of a litany of indicators pointing to turbulence ahead in troubled economic waters.

For instance, the resignation in 2019 of about 1,500 prominent corporate CEOs can be seen as a suggestion that news was circulating prior to 2020 about the imminence of serious financial problems ahead. Insiders’ awareness of menacing developments threatening the workings of the global economy were probably a factor in the decision of a large number of senior executives to exit the upper echelons of the business world. (See this)

Not only did a record number of CEOs resign, but many of them sold off the bulk of their shares in the companies they were leaving. (See this)

Pam Marten and Russ Marten who follow Wall Street’s machinations on a daily basis have advanced the case that the Federal Reserve is engaged in fraud by trying to make it seem that “the banking industry came into 2020 in a healthy condition;” that it is only because of “the COVID-19 pandemic” that the financial system is” unravelling,”

The authors argue that this misrepresentation was deployed because the deceivers are apparently “desperate” to prevent Congress from conducting an investigation for the second time in twelve years on why the Fed, “had to engage in trillions of dollars of Wall Street bailouts.” In spite of the Fed’s fear of facing a Congressional investigation after the November 2020 vote, such a timely investigation of the US financial sector would well serve the public interest.

The authors present a number of signs demonstrating that “the Fed knew, or should have known…. that there was a big banking crisis brewing in August of last year. [2019]” The signs of the financial crisis in the making included negative yields on government bonds around the world as well as big drops in the Dow Jones average. The plunge in the price of stocks was led by US banks, but especially Citigroup and JP Morgan Chase.

Another significant indicator that something was deeply wrong in financial markets was a telling inversion in the value of Treasury notes with the two-year rate yielding more than the ten-year rate.

Yet another sign of serious trouble ahead involved repeated contractions in the size of the German economy. Moreover, in September of 2019 news broke that officials of JP Morgan Chase faced criminal charges for RICO-style racketeering. This scandal added to the evidence of converging problems plaguing core economic institutions as more disruptive mayhem gathered on the horizons. (See this)Lockdowns, Coronavirus, and Banks: “Following the Money”. Devastating Economic and Social Impacts

Accordingly,there is ample cause to ask if there are major underlying reasons for the financial crash of 2020 other than the misnamed pandemic and the lockdowns done in its name of “flattening” its spikes of infection. At the same time, there is ample cause to recognize that the lockdowns have been a very significant factor in the depth of the economic debacle that is making 2020 a year like no other.

Some go further. They argue that the financial crash of 2020 was not only anticipated but planned and pushed forward with clear understanding of its instrumental role in the Great Reset sought by self-appointed protagonists of creative destruction. The advocates of this interpretation place significant weight on the importance of the lockdowns as an effective means of obliterating in a single act a host of old economic relationships. For instance Peter Koenig examines the “farce and diabolical agenda of a universal lockdown.” Koenig writes,

“The pandemic was needed as a pretext to halt and collapse the world economy and the underlying social fabric.”

Inflating the Numbers and Traumatizing the Public to Energize the Epidemic of Fear

There have been many pandemics in global history whose effects on human health have been much more pervasive and devastating than the current one said to be generated by a new coronavirus. In spite, however, of its comparatively mild flu-like effects on human health, at least at this point in the summer of 2020, there has never been a contagion whose spread has generated so much global publicity and hype. As in the aftermath of 9/11, this hype extends to audacious levels of media-generated panic. As with the psy op of 9/11, the media-induced panic has been expertly finessed by practitioners skilled in leveraging the currency of fear to realize a host of radical political objectives.

According to Robert E. Wright in an essay published by the American Institute for Economic Research, “closing down the U.S. economy in response to COVID-19 was probably the worst public policy in at least one-hundred years.” As Wright sees it, the decision to lock down the economy was made in ignorant disregard of the deep and devastating impact that such an action would spur.“Economic lockdowns were the fantasies of government officials so out of touch with economic and physical reality that they thought the costs would be fairly low.”

The consequences, Wright predicts, will extend across many domains including the violence done to the rule of law. The lockdowns, he writes, “turned the Constitution into a frail and worthless fabric.” Writing in late April, Wright touched on the comparisons to be made between the economic lockdowns and slavery. He write, “Slaves definitely had it worse than Americans under lockdown do, but already Americans are beginning to protest their confinement and to subtly subvert authorities, just as chattel slaves did.” (See this)

The people held captive in confined lockdown settings have had the time and often the inclination to imbibe much of the 24/7 media coverage of the misnamed pandemic. Taken together, all this media sensationalism has come to constitute one of the most concerted psychological operations ever.

The implications have been enormous for the mental health of multitudes of people. This massive alteration of attitudes and behaviours is the outcome of media experiments performed on human subjects without their informed consent. The media’s success in bringing about herd subservience to propagandistic messaging represents a huge incentive for more of the same to come. It turns out that the subject matter of public health offers virtually limitless potential for power-seeking interests and agents to meddle with the privacies, civil liberties and human rights of those they seek to manipulate, control and exploit.

The social, economic and health impacts of the dislocations flowing from the lockdowns are proving to be especially devastating on the poorest, the most deprived and the most vulnerable members of society. This impact will continue to be marked in many ways, including in increased rates of suicide, domestic violence, mental illness, addictions, homelessness, and incarceration far larger than those caused directly by COVID-19. As rates of deprivation through poverty escalate, so too will crime rates soar.

The over-the-top alarmism of the big media cabals has been well financed by the advertising revenue of the pharmaceutical industry. With some few exceptions, major media outlets pushed the public to accept the lockdowns as well as the attending losses in jobs and business activity. In seeking to push the agenda of their sponsors, the big media cartels have been especially unmindful of their journalistic responsibilities. Their tendency has been to avoid or censor forums where even expert practitioners of public health can publicly question and discuss government dictates about vital issues of public policy. (See this)

Whether in Germany or the United States or many other countries, front line workers in this health care crisis have nevertheless gathered together with the goal of trying to correct the one-sided prejudices of of discriminatory media coverage. One of the major themes in the presentations by medical practitioners is to confront the chorus of media misrepresentations on the remedial effects of hydroxychloroquine and zinc.

On July 27 a group of doctors gathered on the grounds of the US Supreme Court to try to address the biases of the media and the blind spots of government. (See this)

Another aspect in the collateral damage engendered by COVID-19 alarmism is marked in the fatalities arising from the wholesale postponement of many necessary interventions including surgery. How many have died or will die because of the hold put on medical interventions to remedy cancer, heart conditions and many other potentially lethal ailments? (See this)

Did the unprecedented lockdowns come about as part of a preconceived plan to inflate the severity of an anticipated financial meltdown? What is to be made of the suspicious intervention of administrators to produce severely padded numbers of reported deaths in almost every jurisdiction? This kind of manipulation of statistics raised the possibility that we are witnessing a purposeful and systemic inflation of the severity of this health care crisis. (See this)

Questions about the number of cases arise because of the means of testing for the presence of a supposedly new coronavirus. The PCR system that is presently being widely used does not test for the virus but tests for the existence of antibodies produced in response to many health challenges including the common cold. This problem creates a good deal of uncertainty of what a positive test really means. (See this and this)

The problems with calculating case numbers extend to widespread reportsthat have described people who were not tested for COVID-19 but who nevertheless received notices from officials counting them as COVID-19 positive. Broadcaster Armstrong Williams addressed the phenomenon on his network of MSM media outlets in late July.

From the mass of responses he received, Williams estimated that those not tested but counted as a positive probably extends probably to hundreds of thousands of individuals. What would drive the effort to exaggerate the size of the afflicted population? (See this at 1:03-1:15)

This same pattern of inflation of case numbers was reinforced by the Tricare branch of the US Defense Department’s Military Health System. This branch sent out notices to 600,000 individuals who had not been tested. The notices nevertheless informed the recipients that they had tested positive for COVID 19. (See this)

Is the inflation of COVID-19 death rates and cases numbers an expression of the zeal to justify the massive lockdowns? Were the lockdowns in China conceived as part of a scheme to help create the conditions for the public’s acceptance of a plan to remake the world’s political economy? What is to be made of the fact that those most identified with the World Economic Forum (WEF) have led the way in putting a positive spin on the reset arising from the very health crisis the WEF helped introduce and publicize in Oct. of 2019?

As Usual, the Poor Gets Poorer

The original Chinese lockdowns in the winter of 2020 caused the breakdowns of import-export supply chains extending across the planet. Lockdowns in the movement of raw materials, parts, finished products, expertise, money and more shut down domestic businesses in China as well as transnational commerce in many countries outside China. The supply chain disruptions were especially severe for businesses that have dispensed with the practice of keeping on hand large inventories of parts and raw material, depending instead on just-in-time deliveries.

As the supply chains broke down domestically and internationally, many enterprises lacked the revenue to pay their expenses. Bankruptcies began to proliferate at rates that will probably continue to beastronomical for some time. All kinds of loans and liabilities were not paid out in full or at all. Many homes are being re-mortgaged or cast into real estate markets as happened during the prelude and course of the bailouts of 2007-2010.

The brunt of the financial onslaught hit small businesses especially hard. Collectively small businesses have been a big creator of jobs. They have picked up some of the slack from the rush of big businesses to downsize their number of full-time employees. Moreover, small businesses and start-ups are often the site of exceptionally agile innovations across broad spectrums of economic activity. The hard financial slam on the small business sector, therefore, is packing a heavy punch on the economic conditions of everyone.

The devastating impact of the economic meltdown on workers and small businesses in Europe and North America extends in especially lethal ways to the massive population of poor people living all over the world. Many of these poor people reside in countries where much of the paid work is irregular and informal.

At the end of April the International Labor Organization (ILO), an entity created along with the League of Nations at the end of the First World War, estimated that there would be 1.6 billion victims of the meltdown in the worldwide “informal economy.” In the first month of the crisis these workers based largely in Africa and Latin America lost 60% of their subsistence level incomes. (See this)

As ILO Director-General, Guy Ryder, has asserted,

This pandemic has laid bare in the cruellest way, the extraordinary precariousness and injustices of our world of work. It is the decimation of livelihoods in the informal economy – where six out of ten workers make a living – which has ignited the warnings from our colleagues in the World Food Programme, of the coming pandemic of hunger. It is the gaping holes in the social protection systems of even the richest countries, which have left millions in situations of deprivation. It is the failure to guarantee workplace safety that condemns nearly 3 million to die each year because of the work they do. And it is the unchecked dynamic of growing inequality which means that if, in medical terms, the virus does not discriminate between its victims in its social and economic impact, it discriminates brutally against the poorest and the powerless. (See this)

Guy Ryder remembered the optimistic rhetoric in officialdom’s responses to the economic crash of 2007-2009. He compares the expectations currently being aroused by the vaccination fixation with the many optimistic sentiments previously suggesting the imminence of remedies for grotesque levels of global inequality. Ryder reflected,

We’ve heard it before. The mantra which provided the mood music of the crash of 2008-2009 was that once the vaccine to the virus of financial excess had been developed and applied, the global economy would be safer, fairer, more sustainable. But that didn’t happen. The old normal was restored with a vengeance and those on the lower echelons of labour markets found themselves even further behind.

The internationalization of increased unemployment and poverty brought about in the name of combating the corona crisis is having the effect of further widening the polarization between rich and poor on a global scale. Ryder’s metaphor about the false promises concerning a “vaccine” to correct “financial excess” can well be seen as a precautionary comment on the flowery rhetoric currently adorning the calls for a global reset.

Posted in Health, Politics, WorldComments Off on Was COVID-19 a Cover for an Anticipated or Planned Financial Crisis?

The US helped create the UN precisely to block antics like Mike Pompeo’s obsession with Iran

by: Assal Rad

In late November of 1943, FDR, Churchill, and Stalin met in Iran, which the allied powers had occupied during World War II, in what came to be known as the Tehran Conference — a strategy meeting to combat Nazi Germany and consider a post-war settlement. Another significant outcome of the meeting were conversations addressing the demise of the League of Nations, which had failed to prevent a second world war, and the need for an international body to be established with the mission to nurture world peace.

One of the central reasons for the League’s failure was that the United States refused to participate, fearing it would be constrained by international obligations. However, after the devastation of World War II, the need for such a body was self-evident and so the United Nations was born from its rubble. In a world facing a rise in authoritarianism, pandemic, the dangers of nuclear proliferation, and the existential threat of climate change, the significance of the U.N. and its origins are more relevant than ever.

Most recently, the United Nations and the international community held the United States accountable — despite its position as the unipolar power of the world — by rejecting the absurd U.S. claims that it is a “participant” in the Iran nuclear deal (which it withdrew from in May 2018) and could therefore initiate a “snapback” mechanism to reimpose U.N. sanctions on Iran.

Rather than submitting to the arrogant posturing of the Trump administration, the international body held firm to its mission of fostering peace. In their joint statement following Secretary of State Mike Pompeo’s attempt at “snapback” of all U.N. sanctions on Iran, the E3, Britain, France, and Germany, made their position clear yet again, “France, Germany and the United Kingdom note that the US ceased to be a participant to the JCPOA following their withdrawal from the deal on May 8, 2018…We cannot therefore support this action which is incompatible with our current efforts to support the JCPOA.”

The 2015 nuclear agreement with Iran was a breakthrough for nuclear non-proliferation and a model for global diplomacy. While peaceful relations with allies and friends is admirable, the real work of diplomacy is its effectiveness with presumed adversaries. In the Iran deal, the second breakthrough was détente between the U.S. and Iran, after both sides had engaged in belligerent rhetoric against the other for decades.  

As the U.S. under the Trump administration — and at the behest of an outspoken Iran hawk, Mike Pompeo — has tried everything to sabotage years of negotiating efforts by the Obama administration and brought us to the brink of war with Iran, world powers, Iranians, and the American populace continue to support diplomacy and a peaceful resolution. While President Trump has maintained the language of his campaign platform and appears to want a deal with Iran in his own name, instead of a war, it has become increasingly plain that Secretary of State Pompeo wants no such deal.

In the just under two weeks since the U.S. attempt to extend the arms embargo on Iran through a U.N. Security Council resolution failed miserably, an obsessed Pompeo has tweeted more than 20 times about Iran, taking up approximately a third of all his activity. After the vote, Pompeo lambasted the international body stating, “The Security Council’s failure to act decisively in defense of international peace and security is inexcusable.” While the irony of such a statement — in light of the Trump administration’s destruction of a deal that advanced peace and prevented Iran from obtaining a nuclear weapon — is striking, the dogmatic tone should not be overlooked. During his short tenure as Secretary of State, Pompeo has led the U.S. to increased isolation in the international community, slowly eroded the State Department, undermined diplomacy in favor of hostility, been investigated for misconduct, and his discourse has grown gradually more divisive both domestically and globally.

If the United Nations is to succeed where the League of Nations failed, it must stand up against precisely this kind of rhetoric, and the aggressive unilateral actions of a member state led by an administration that has damaged its own democratic institutions and seems determined to destroy an international body if it does not bend to its will. We can never know if a properly functioning League of Nations could have prevented WWII, what we do know however, is that we cannot allow another failure of that magnitude. With the global challenges we face, the need for an international body that provides collective security and prevents war through disarmament and diplomacy is crucial. The U.N. fulfilled its duty by rejecting Pompeo’s reckless schemes, it must continue to show strength, deny warmongers their desired legitimacy, and encourage the peace it was founded to protect.

Posted in USA, Iran, Politics, UNComments Off on The US helped create the UN precisely to block antics like Mike Pompeo’s obsession with Iran

UN Says New Polio Outbreak in Sudan Caused by Oral Vaccine

By Maria Cheng

These are excerpts of a an AP Report

The World Health Organization says a new polio outbreak in Sudan is linked to an ongoing vaccine-sparked epidemic in Chad — a week after the U.N. health agency declared the African continent free of the wild polio virus.

In a statement this week, WHO said two children in Sudan — one from South Darfur state and the other from Gedarif state, close to the border with Ethiopia and Eritrea — were paralyzed in March and April. Both had been recently vaccinated against polio. WHO said initial outbreak investigations show the cases are linked to an ongoing vaccine-derived outbreak in Chad that was first detected last year and is now spreading in Chad and Cameroon.

“There is local circulation in Sudan and continued sharing of transmission with Chad,” the U.N. agency said, adding that genetic sequencing confirmed numerous introductions of the virus into Sudan from Chad.

On Monday, WHO warned that the risk of further spread of the vaccine-derived polio across central Africa and the Horn of Africa was “high,” noting the large-scale population movements in the region.

More than a dozen African countries are currently battling outbreaks of polio caused by the virus, including Angola, Congo, Nigeria and Zambia.

To read complete article, click here

Posted in Health, Sudan, UNComments Off on UN Says New Polio Outbreak in Sudan Caused by Oral Vaccine

Chomsky and Pollin: To Heal From COVID-19, We Must Imagine a Different World

Noam Chomsky and Robert Pollin tackle the questions of what lessons we can learn from this pandemic and how society may organize moving forward.
Noam Chomsky and Robert Pollin tackle the questions of what lessons we can learn from this pandemic and how society may organize moving forward.

BYC.J. PolychroniouTruthoutPUBLISHEDApril 10, 2020SHAREShare via FacebookShare via TwitterShare via Email

Despair and Disparity: The Uneven Burdens of COVID-19

The coronavirus disease (COVID-19) caught the world unprepared, and the economic, social and political consequences of the pandemic are expected to be dramatic, in spite of recent pledges by leaders of the Group of 20 (G20) major economies to inject $5 trillion into the global economy in order to spur economic recovery.

But what lessons can we learn from this pandemic? Will the coronavirus crisis lead to a new way of organizing society — one that conceives of a social and political order where profits are not above people?

In this exclusive interview with Truthout, public intellectual Noam Chomsky and economist Robert Pollin tackle these questions.

C. J. Polychroniou: Noam, what are some of the deeper lessons we can draw from the global health crisis caused by coronavirus?

Noam Chomsky: Pandemics have been predicted by scientists for a long time, particularly since the 2003 SARS pandemic, which was caused by a coronavirus similar to COVID-19. They also predict that there will be further and probably worse pandemics. If we hope to prevent the next ones, we should therefore ask how this happened, and change what went wrong. The lessons arise at many levels, from the roots of the catastrophe to issues specific to particular countries. I’ll focus on the U.S., though that’s misleading since it is at the bottom of the barrel in competence of response to the crisis.

The basic factors are clear enough. The damage was rooted in a colossal market failure, exacerbated by the capitalism of the neoliberal era. There are particularities in the U.S., ranging from its disastrous health system and weak social justice ranking — near the bottom of the OECD — to the wrecking ball that has taken over the federal government.

The virus responsible for SARS was quickly identified. Vaccines were developed, but were not carried through the testing phase. Drug companies showed little interest: They respond to market signals, and there’s little profit in devoting resources to staving off some anticipated catastrophe. The general failure is illustrated dramatically by the most severe immediate problem: lack of ventilators, a lethal failure, forcing doctors and nurses to make the agonizing decision of who to kill.

The Obama administration had recognized the potential problem. It ordered high-quality low-cost ventilators from a small company that was then bought by a large corporation, Covidien, which shelved the project, apparently because the products might compete with its own high-cost ventilators. It then informed the government that it wanted to cancel the contract because it was not profitable enough.

So far, normal capitalist logic. But at that point the neoliberal pathology delivered another hammer blow. The government could have stepped in, but that’s barred by the reigning doctrine pronounced by Ronald Reagan: Government is the problem, not the solution. So nothing could be done.

We should pause for a moment to consider the meaning of the formula. In practice, it means that government is not the solution when the welfare of the population is at stake, but it very definitely is the solution for the problems of private wealth and corporate power. The record is ample under Reagan and since, and there should be no need to review it. The mantra “Government bad” is similar to the vaunted “free market” — easily skewed to accommodate exorbitant claims of capital.

Neoliberal doctrines entered for the private sector too. The business model requires “efficiency,” meaning maximal profit, consequences be damned. For the privatized health system, it means no spare capacity: just enough to get by in normal circumstances, and even then, bare bones, with severe cost to patients but a good balance sheet (and rich rewards for management). When something unexpected happens, tough luck.

These standard business principles have plenty of effects throughout the economy. The most severe of these concern the climate crisis, which overshadows the current virus crisis in its import. Fossil fuel corporations are in business to maximize profits, not to allow human society to survive, a matter of indifference. They are constantly seeking new oil fields to exploit. They do not waste resources on sustainable energy and dismantle profitable sustainable energy projects because they can make more money by accelerating mass destruction.

The White House, in the hands of an extraordinary collection of gangsters, pours fuel on the fire by its dedication to maximizing fossil fuel use and dismantling regulations that hinder the race to the abyss in which they proudly take the lead.

The reaction of the Davos crowd — the “masters of the universe” as they are called — is instructive. They dislike Trump’s vulgarity, which contaminates the image of civilized humanism they seek to project. But they applaud him vigorously when he rants away as keynote speaker, recognizing that he has a clear understanding of how to fill the right pockets.

These are the times we live in, and unless there is a radical change of direction, what we are seeing now is a bare foretaste of what is to come.

Returning to the pandemic, there was ample evidence that it was coming. Trump responded in his characteristic manner. Throughout his term, budgets for health-related components of government were slashed. With exquisite timing, “Two months before the novel coronavirus is thought to have begun its deadly advance in Wuhan, China, the Trump administration ended a $200 million pandemic early-warning program aimed at training scientists in China and other countries to detect and respond to such a threat” — a precursor to Trump’s fanning “Yellow Peril” flames to deflect attention from his catastrophic performance.These are the times we live in, and unless there is a radical change of direction, what we are seeing now is a bare foretaste of what is to come.

The defunding process continued, astonishingly, after the pandemic had struck with full force. On February 10, the White House released its new budget, with further reductions for the beleaguered health care system (indeed anything that might benefit the population) but “the budget promotes a fossil fuel ‘energy boom’ in the United States, including an increase in the production of natural gas and crude oil.”

Perhaps there are words that can capture the systematic malevolence. I can’t find them.

The American people are also a target of Trumpian values. Despite repeated pleas from Congress and the medical profession, Trump did not invoke the Defense Production Act to order companies to produce badly needed equipment, claiming that it is a “break the glass” last resort and that to invoke the Defense Production Act for the pandemic would be to turn the country into Venezuela. But in fact, The New York Times points out that the Defense Production Act “has been invoked hundreds of thousands of times in the Trump years” for the military. Somehow the country survived this assault on the “free enterprise system.”

It was not enough to refuse to take measures to procure the required medical equipment. The White House also made sure that stocks would be depleted. A study of government trade data by Congresswoman Katie Porter found that the value of U.S. ventilator exports rose 22.7 percent from January to February and that in February 2020, “the value of U.S. mask exports to China was 1094 [percent] higher than the 2019 monthly average.”

The study continues:

As recently as March 2, the Trump Administration was encouraging American businesses to increase exports of medical supplies, especially to China. Yet, during this period, the U.S. government was well aware of the harms of COVID-19, including a likely need for additional respirators and masks.

Writing in The American Prospect, David Dayen comments: “So manufacturers and middlemen made money in the first two months of the year shipping medical supplies out of the country, and now they’re making more money in the next two months shipping them back in. The trade imbalance took precedence over self-sufficiency and resiliency.”The defunding process continued, astonishingly, after the pandemic had struck with full force.

There was no doubt about the coming dangers. In October, a high-level study revealed the nature of the pandemic threats. On December 31, China informed the World Health organization of an outbreak of pneumonia-like symptoms. A week later, it reported that scientists had identified the source as a coronavirus and sequenced the genome, again providing the information to the general public. For several weeks, China did not reveal the scale of the crisis, claiming later that the delay had been caused by failure of local bureaucrats to inform the central authorities, a claim confirmed by U.S. analysts.

What was happening in China was well-known. In particular, to U.S. intelligence, which through January and February was beating on the doors of the White House trying to reach the President. To no avail. He was either playing golf or praising himself on TV for having done more than anyone in the world to stem the threat.

Intelligence was not alone in trying to get the White House to wake up. As The New York Times reports, “A top White House adviser [Peter Navarro] starkly warned Trump administration officials in late January that the coronavirus crisis could cost the United States trillions of dollars and put millions of Americans at risk of illness or death … imperiling the lives of millions of Americans [as shown by] the information coming from China.”

To no avail. Months were lost while the Dear Leader flipped up and back from one tale to another — ominously, with the adoring Republican voting base lustily cheering every step.

When the facts finally became undeniable, Trump assured the world that he was the first person to have discovered the pandemic and his firm hand had everything under control. Throughout, the performance was loyally parroted by the sycophants with whom he has surrounded himself, and by his echo chamber at Fox News — which also seems to serve as his source for information and ideas, in an interesting dialogue.

None of this was inevitable. It was not only U.S. intelligence that understood the early information that China provided. Countries on China’s periphery reacted at once, very effectively in Taiwan, also in South Korea, Hong Kong and Singapore. New Zealand instituted a lockdown at once, and seems to have virtually eliminated the epidemic.

Most of Europe dithered, but better organized societies reacted. Germany has the world’s lowest reported death rate, benefiting from spare capacity in reserve. The same seems to be true of Norway and some others. The European Union revealed its level of civilization by the refusal of the better-off countries to help others. But fortunately, they could count on Cuba to come to their rescue, providing doctors, while China provided medical equipment.

Throughout, there are many lessons to learn, crucially, about the suicidal features of unconstrained capitalism and the extra damage caused by the neoliberal plague. The crisis shines a bright light on the perils of transferring decision-making to unaccountable private institutions dedicated solely to greed, their solemn duty, so Milton Friedman and other luminaries have explained, invoking the laws of sound economics.

For the U.S. there are special lessons. As already noted, the U.S. ranks near the bottom of the Organisation for Economic Co-operation and Development in social justice measures. Its privatized for-profit health care system, pursuing business models of efficiency, is a disaster, with twice the per-capita costs of comparable countries and some of the worst outcomes. There is no reason to live with that. Surely the time has come to rise to the level of other countries and institute a humane and efficient universal health care system.The crisis shines a bright light on the perils of transferring decision-making to unaccountable private institutions dedicated solely to greed

There are other simple steps that can be taken at once. Corporations are again rushing to the nanny state for bailouts. If granted, strict conditions should be imposed: no bonuses and pay for executives for the duration of the crisis; permanent ban on stock buybacks and resort to tax havens, modes of robbery of the public that run to tens of trillions of dollars, not small change. Is that feasible? Clearly so. That was the law, and was enforced, until Reagan opened the spigot. They should also be required to have worker representation in management and to adhere to a living wage, among conditions that quickly come to mind

There are many further short-range steps that are quite feasible and could expand. But beyond that, the crisis offers an opportunity to rethink and reshape our world. The masters are dedicating themselves to the task, and if they are not countered and overwhelmed by engaged popular forces, we will be entering a much uglier world — one that may not long survive.

The masters are uneasy. As the peasants are picking up their pitchforks, the tune in corporate headquarters is changing. High-level executives have joined to show that they are such nice guys that the well-being and security of all is assured if left in their caring hands. It’s time for corporate culture and practice to become more caring, they proclaim, concerned not just with returns to shareholders (mostly very wealthy), but with stakeholders — workers and community. It was a leading theme of the last Davos conference in January.

They aren’t reminding us that we’ve heard this song before. In the 1950s the phrase was “the soulful corporation.” How soulful, it did not take long to discover.

C. J. Polychroniou: Bob, can you help us understand the economic shock of coronavirus? How severe will the socioeconomic impact be, and who is likely to be most affected?

Robert Pollin: The breakneck speed of the economic collapse resulting from COVID-19 is without historic precedent.

Over the week of April 4, 6.6 million people filed initial claims to receive unemployment insurance. This is after 6.9 million people filed the previous week, and 3.3 filed the week before that. Prior to these three weeks, the highest number of people filing claims was in October 1982, during the severe Ronald Reagan double-dip recession. At that time, the record number of claims added up to 650,000. This disparity between 1982 and today is eye-popping, even after one takes account of the relative size of the U.S. labor force today versus in 1982. Thus, in 1982, the 650,000 unemployment insurance claims amounted to 0.6 percent of the U.S. labor force. The 6.6 million people who filed claims in the first week of April and 6.9 million the week before both equaled fully 4 percent of the U.S. labor force. So as a percentage of the labor force, these weekly filings for unemployment claims were 7 times higher than the previous record from 1982. Adding up the past three weeks of unemployment insurance claims gets us to 16.8 million people newly unemployed people, amounting to over 10 percent of the U.S. labor force. The expectation is that this figure is going to keep rising for many more weeks to come, potentially pushing unemployment in the range of 20 percent, a figure unseen since the depths of the 1930s Great Depression.The breakneck speed of the economic collapse resulting from COVID-19 is without historic precedent.

The situation for unemployed people in the U.S. is worse still because a large share of them had health insurance coverage through their employers. That insurance is now gone. The stimulus bill that Trump signed into law on March 27 provides no funds for treating people who are infected. The Peterson-Kaiser Family Foundation estimated that treatment could cost up to $20,000, and that even people with health insurance coverage through their employer could end up with $1,300 in out-of-pocket bills. Thus, fully in the spirit of our corporate-dominated and egregiously unfair U.S. health care system, COVID-19 will hit millions of people with major medical bills at exactly when they are most vulnerable. If Medicare for All were operating in the U.S. today, everyone would be covered in full as a matter of course.

In addition to the situation for people losing their jobs, we also need to recognize conditions for people working in front-line essential occupations. These people are putting themselves at high risk by showing up at work. A report by Hye Jin Rho, Hayley Brown and Shawn Fremstad of the Center for Economic and Policy Research shows that more than 30 million U.S. workers (nearly 20 percent of the entire U.S. workforce) are employed in six broad industries that are now on the front lines of the response. These workers include grocery store clerks, nurses, cleaners, warehouse workers and bus drivers, among others. Fully 65 percent of these workers are women. A disproportionate share of them are also low-paid and lack health insurance. These essential workers are putting themselves at high risks of infection, and if they do become infected, they will face the prospect of a severe financial crisis on top of their health crisis.More than 30 million U.S. workers (nearly 20 percent of the entire U.S. workforce) are employed in six broad industries that are now on the front lines of the response.

The coronavirus is also hitting low-income African American communities in the U.S. most brutally. Thus, in Illinois, African Americans account for more than half of all deaths from COVID-19, even while they account for only 14 percent of the state’s population. In Louisiana, 70 percent of those who have died thus far are African American, while the African American share of the population is 32 percent. Comparable patterns are emerging in other states. These figures reflect the simple fact that lower-income African Americans do not have the same means to protect themselves through social distancing and staying home from their jobs.

As severe as conditions are now for people in the U.S. and other advanced economies, they are going to seem mild once the virus begins to spread, as it almost certainly will, with catastrophic impacts, in the low-income countries of Africa, Asia, Latin America and the Caribbean. To begin with, the strategies of social distancing and self-isolation that have been relatively effective in high-income countries in slowing down the infection rate will be mostly impossible to implement in the poor neighborhoods of, say, Delhi, Nairobi or Lima, since people in these communities are mostly living in very tight quarters. They also largely have to rely on crowded public transportation to get anyplace, including to their jobs, since they cannot afford to stay home from work. This problem is compounded by the conditions of work in these jobs. In most low-income countries, about 70 percent of all employment is informal, meaning workers do not receive benefits, including paid sick leave, provided by their employers. As the Indian economists C.P. Chandrasekhar and Jayati Ghosh write, these workers and their families “are clearly the most vulnerable to any economic downturn. When such a downturn comes in the wake of an unprecedented public health calamity, the concerns are obviously multiplied.”In Illinois, African Americans account for more than half of all deaths from COVID-19, even while they account for only 14 percent of the state’s population.

In addition, most low-income countries have extremely limited public health budgets to begin with. They have also been hard-hit by the collapse of tourism as well as sharp declines in their export revenues and remittances. Thus, in recent weeks, 85 countries have already approached the International Monetary Fund for short-term emergency assistance, roughly double the number that made such requests in the aftermath of the 2008 financial crisis. The situation is likely to get worse very quickly.

C. J. Polychroniou: Noam, will coronavirus kill globalization?

Noam Chomsky: Globalization in some form goes back to the earliest recorded history — in fact, beyond. And it will continue. The question is: in what form? Suppose, for example, that a question arises as to whether to transfer some enterprise from Indiana to northern Mexico. Who decides? Bankers in New York or Chicago? Or perhaps the workforce and the community, perhaps even in coordination with Mexican counterparts. There are all sorts of associations among people — and conflicts of interest among them — that do not coincide with colors on maps. The sordid spectacle of states competing when cooperation is needed to combat a global crisis highlights the need to dismantle profit-based globalization and to construct true internationalism, if we hope to avoid extinction. The crisis is offering many opportunities to liberate ourselves from ideological chains, to envision a very different world, and to move on to create it.

The coronavirus is likely to change the highly fragile international economy that has been constructed in recent years, profit-driven and dismissive of externalized costs such as the huge destruction of the environment caused by transactions within complex supply chains, not to speak of the destruction of lives and communities. It’s likely that all of this will be reshaped, but again we should ask, and answer, the question of whose will be the guiding hands.As severe as conditions are now for people in the U.S. and other advanced economies, they are going to seem mild once the virus begins to spread in the low-income countries.

There are some steps towards internationalism in the service of people, not concentrated power. Yanis Varoufakis and Bernie Sanders issued a call for a progressive international to counter the international of reactionary states being forged by the Trump White House.

Similar efforts can take many forms. Unions are still called “internationals,” reminiscent of dreams that do not have to be idle. And sometimes are not. Longshoremen have refused to unload cargo in acts of international solidarity. There have been many impressive examples of international solidarity at state and popular levels. At the state level, nothing compares with Cuban internationalism — from Cuba’s extraordinary role in the liberation of southern Africa, described in depth by Piero Gleijeses, to the work of its doctors in Pakistan after the devastating 2005 earthquake, to overcoming the failures of the European Union today.

At the level of people, I know of nothing to compare with the flow of Americans to Central America in the 1980s to help victims of Reagan’s terrorist wars and the state terrorism that he supported, from all walks of life, some of the most dedicated and effective from church groups in rural America. There has been nothing like that in the prior history of imperialism, to my knowledge.The crisis is offering many opportunities to liberate ourselves from ideological chains, to envision a very different world, and to move on to create it.

Without proceeding, there are many kinds of global interaction and integration. Some of them are highly meritorious and should be actively pursued.

C. J. Polychroniou: Governments around the world are responding to the coronavirus economic fallout with massive stimulus measures. In the U.S., the Trump administration is prepared to spend $2 trillion of stimulus money approved by Congress. Bob, is this enough? And will it test the limits of how much more debt the U.S. can bear?

Robert Pollin: The stimulus program that Trump signed into law in March is the largest such measure in U.S. history. At $2 trillion, it amounts to roughly 10 percent of U.S. gross domestic product (GDP), which the government aims to distribute quickly in the coming months. By contrast, the 2009 Obama fiscal stimulus was budgeted at $800 billion over two years, or about 3 percent of GDP per year over the two years.

Despite its unprecedented magnitude, it is easy to see that the current stimulus program is too small, and will therefore deliver too little, in most of the ways that matter. This is while recognizing that, adding everything up, the stimulus provides massive giveaways to big U.S. corporations and Wall Street — i.e. the same people who benefited the most only 11 years ago from the Obama stimulus and corresponding Wall Street bailout. I noted above the fact that the stimulus provides no health care support for people infected by COVID-19. It also offers minimal additional support for both hospitals fighting the virus on the front lines as well as for state and local governments. State and local governments are going to experience sharp falls in their tax revenues — from income taxes, sales taxes and property taxes — as the recession takes hold. During the 2007-09 Great Recession, state and local tax revenues fell by 13 percent. We can expect a drop now of at least equal severity. Absent a large-scale injection of funds from the federal government — i.e. an injection of roughly three times what has been allocated thus far through the stimulus — state and local governments will be forced to undertake large-scale budget cuts and layoffs, including for school teachers, health care workers and police officers who, in combination, represent the bulk of their payroll spending.The stimulus provides no health care support for people infected by COVID-19.

Even the Trump administration appears to recognize that the stimulus bill is far too small. That is why both Trump and the congressional Democrats are already talking about another stimulus bill that could amount to another $2 trillion. The U.S. does have the capacity to maintain borrowing these enormous sums. Among other considerations, as was true during the 2007-09 Great Recession, U.S. government bonds will be recognized as the safest assets available on the global financial market. This will place a premium on U.S. bonds relative to every other credit instrument on the global market. The Federal Reserve also has the capacity, as needed, to buy up and effectively retire U.S. government bonds if the debt burden becomes excessive. No other country, or entity of any sort, enjoys anything like this privileged financial status.

Working from this position of extreme privilege, the Fed has now committed to providing basically unlimited and unconditional support for U.S. corporations and Wall Street firms. Indeed, between March 18 and 31 alone, the Fed purchased $1.14 trillion in Treasury and corporate bonds, at a rate of over $1 million per second. The Financial Times reports projections that the Fed’s asset holdings could reach $12 trillion by June — i.e. 60 percent of U.S. GDP — with further increases to follow. By comparison, just prior to the 2007 -2009 financial crisis, the Fed’s bond holdings were at $1 trillion. They then spiked to $2 trillion during the crisis — a figure equal to only about 1/5 where the Fed’s interventions are heading over the next couple of months.

The U.S. and global economy do need a gigantic bailout now to prevent suffering by innocent people resulting from both the pandemic and economic collapse. But the bailout needs to be focused, in the immediate, on delivering to everyone the health care provisions that they need and to keeping people financially whole.

Taking a broader structural perspective, we also need to stop squandering the enormous financial privileges enjoyed by the U.S. on propping up the neoliberal edifice that has denominated economic life in the U.S. and the world for the past 40 years. The fact that the U.S. government has the financial wherewithal to bail out giant corporations and Wall Street twice within the past 11 years means that it also has the capacity to take control over some of the most dysfunctional and anti-social private enterprises. We could start by replacing the private health insurance industry with Medicare for All. The federal government could also take a controlling interest in the fossil fuel industry that must be put out of business, in any case, over the next 30 years. Other targets for at least partial nationalizations should include the airlines that face desperate straits now, but that squandered 96 percent of their cash on buybacks over the past decade. The Wall Street operators that helped engineer such financial practices need to face both strong regulations and competition from large-scale public development banks capable of financing, for example, the Green New Deal.Neoliberal indoctrination has pampered big business and Wall Street into believing that corporate socialism will always be theirs for the asking.

In short, the U.S. economy that will emerge out of the present crisis cannot be permitted to return to the neoliberal status quo. It was clear during the Great Recession that some of the biggest U.S. corporations and Wall Street firms could not survive without government life supports. Now, only 11 years later, we are about to rerun the same movie, only this time on a jumbotron screen. Forty years’ worth of neoliberal indoctrination has pampered big business and Wall Street into believing that corporate socialism will always be theirs for the asking — that they can hoard profits for themselves at will while foisting their risks, as needed, onto everybody else. At this moment especially, if businesses want to insist that they exist only to maximize profits for their owners, then the federal government needs to sever their lifelines. Progressives should keep fighting hard for these principles.

C. J. Polychroniou: Noam, coronavirus seems to be producing an uplift in solidarity among common people in many parts of the world, and perhaps even the realization that we are all global citizens. Obviously, coronavirus itself won’t defeat neoliberalism and the resulting atomization of social life that we have been witnessing since its advent, but do you expect a shift in economic and political thinking? Perhaps the return of the social state?

Noam Chomsky: Those possibilities should remind us of the powerful wave of radical democracy that that swept over much of the world under the impact of the Great Depression and the anti-fascist war — and of the steps taken by the masters to contain or crush such hopes. A history that yields many lessons for today.

The pandemic should shock people to an appreciation of genuine internationalism, to recognition of the need to cure ailing societies of the neoliberal plague, then on to more radical reconstruction directed to the roots of contemporary disorder.

Americans in particular should awaken to the cruelty of the weak social justice system. Not a simple matter. It is, for example, quite odd to see that even at the left end of mainstream opinion, programs such as those advocated by Bernie Sanders are considered “too radical” for Americans. His two major programs call for universal health care and free higher education, normal in developed societies and poorer ones as well.

The pandemic should awaken us to the realization that in a just world, social fetters should be replaced by social bonds, ideals that trace back to the Enlightenment and classical liberalism. Ideals that we see realized in many ways. The remarkable courage and selflessness of health workers is an inspiring tribute to the resources of the human spirit. In many places, communities of mutual aid are being formed to provide food for the needy and help and support for the elderly and disabled.

There is indeed “an uplift in solidarity among common people in many parts of the world, and perhaps even the realization that we are all global citizens.” The challenges are clear. They can be met. At this grim moment of human history, they must be met, or history will come to an inglorious end.

This interview has been edited for clarity and length.

Posted in USA, Health, Politics, WorldComments Off on Chomsky and Pollin: To Heal From COVID-19, We Must Imagine a Different World

Russia’s Proposal on UNSC Summit With Iran Remains on Table After Trump’s Refusal

Unsc Logo Wallpaper posted by Ryan Cunningham

The proposal by Russian President Vladimir Putin to hold an online conference of leaders of the UNSC states, Germany, and Iran to discuss the Persian Gulf and Iran remains on the table after US President Donald Trump’s refusal to support it, Russian Deputy Foreign Minister Sergey Ryabkov affirmed on Sunday.

“Of course, yes”, Ryabkov said when asked whether the initiative is still on the table after Trump’s statement.

Trump said on Saturday that he would unlikely support Putin’s initiative to hold the online summit on Iran adding that he would wait until [after] the election.

On Friday, Putin suggested holding a remote videoconference around tensions in the Persian Gulf with the participation of the leaders of the UN Security Council members, Germany and Iran.

He urged Washington to assess the advantages of the implementation of this initiative in order to avoid further escalation of the situation in the Persian Gulf.

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Posted in USA, Iran, Russia, UNComments Off on Russia’s Proposal on UNSC Summit With Iran Remains on Table After Trump’s Refusal

UN experts denounce ‘Israeli’ apartheid and call for sanctions

ByPalestinian BDS National Committee (BNC) /

A statement by tens of UN experts on Israel’s planned annexation amplified Palestinian civil society’s call

Resist apartheid sign 6.16.2020.png

The Palestinian BDS National Committee (BNC), the largest coalition in Palestinian society, commends tens of UN experts for their courage in speaking truths that States and international organizations representing them, including the UN and EU, have sought to evade and suppress.

The UN experts said in a statement issued in Geneva today that the annexation of occupied Palestinian territory currently planned by Israel’s right-wing government “would be the crystallisation of an already unjust reality: two peoples living in the same space, ruled by the same state, but with profoundly unequal rights. This is a vision of a 21st century apartheid.”

Their statement called for “accountability and an end to impunity [as] an immediate priority for the international community.”

Welcoming the UN experts’ statement, Mahmoud Nawajaa, General Coordinator of the BNC, said:

For decades, international inaction and complicity have enabled Israel to violate the laws of belligerent occupation, advance its colonization of the occupied Palestinian territory and impose an apartheid regime that is enshrined in Israel’s domestic law.

Faced with Israel’s illegal annexation, its regime of apartheid and its denial of our inalienable right to self-determination, it is high time for all States and international organizations to comply with their legal obligations by adopting effective countermeasures, including sanctions.

As a matter of priority, the overwhelming majority of Palestinian civil society is calling for:

  • Banning arms trade and military-security cooperation with Israel.
  • Suspending free-trade agreements with Israel.
  • Prohibiting all trade with the illegal Israeli settlements and ensuring that companies refrain from/terminate business with Israel’s illegal settlement enterprise. 
  • Ensuring that individuals and corporate actors responsible for war crimes/crimes against humanity in the context of Israel’s regime of illegal occupation and apartheid are brought to justice.

Posted in Palestine Affairs, ZIO-NAZI, Campaigns, Human Rights, UNComments Off on UN experts denounce ‘Israeli’ apartheid and call for sanctions

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