Income and wealth inequality reach record highs in Canada

Steven Fields

A key finding contained in the latest household income report from Statistics Canada is that the income gap between high-earning and low-earning households has reached record levels. Related to this is the extraordinary pace at which wealth inequality is growing in Canada. In short, the rich are getting richer, middle-income people are getting poorer, and the already poor remain poor. 

A homeless encampment in Kitchener, Ontario, in front of the former Krug Furniture factory

In its October 2024 report, Statistics Canada defined “income gap” as the gap in the share of disposable income between the top two quintiles (top 40 percent of households) and the bottom two quintiles (bottom 40 percent of households). In the second quarter of 2024, this gap stood at 47 percent, which is the largest ever recorded.

While low-income households experienced above-average growth in wages, this was offset by an increase in interest paid on mortgages and consumer credit. As a result, their share of disposable income remained mostly unchanged. For the bottom quintile, this share stood at a miserly 6.2 percent. While this is a slight increase compared to 2023, it means that a substantial portion of Canadian households remains one pay cheque away from crisis.

The middle-income (third quintile) households fared the worst. Their share of disposable income dropped from 17.4 percent in the second quarter of 2023 to 16.6 percent in 2024.

For high-income households (top quantile), the additional debt burden from higher interest rates was more than offset by higher yields on savings and investment accounts. This group saw its share of disposable income increase from 41.6 percent in 2023 to 42.4 percent today.

An even more striking feature of the report is the rapidly rising wealth gap. The Statistics Canada report blandly states that: “Most wealth is held by relatively few households in Canada.” The gap between the wealthiest and least wealthy grew by 1.1 percent in the first quarter of 2023 compared to the same period the previous year, the highest increase on record.

The wealthiest (i.e., the top 20 percent) Canadians held 67.7 percent of total net worth. The net worth of these households increased by 2.3 percent in the second quarter of 2024 compared to a year earlier, bringing the average worth of a household in this group to $3.4 million.

In contrast, the net worth of the least wealthy households decreased by 1.4 percent in the second quarter of 2024 compared with the year earlier. These households (i.e., the bottom 40 percent) accounted for only 2.8 percent of Canada’s total net worth.

The report notes that younger households (defined as those under 35 years of age) were the only group to continuously decrease their mortgage debt. There are different explanations for this but, for young low-income workers, the likely reason is that they are being gradually priced out of the housing market altogether by a combination of high housing prices and interest rates. A poll from Scotiabank revealed that 29 percent of respondents in this age group now live at home with their parents or family—a nine-point increase from three years ago.

Canada’s real gross domestic product (GDP) increased only 0.5 percent in the second quarter of 2024 after rising 0.4 percent in the first quarter. In other words, the widening wealth gap comes at the expense of the less affluent portion of society.

The impact of growing inequality can be observed in various aspects of daily life. The number of homeless people is rising, and tent encampments are an increasingly common sight in Canadian cities. Nearly 23 percent of the population reported some type of food insecurity in 2022. Low-income Canadians are often forced to rely on food banks due to prohibitive costs of housing and basic necessities. Food Banks Canada issued a report noting that in March 2024, more than two million people visited food banks—a new record. With such high demand, the food bank system itself is pushed to the brink. Low-income workers are often precariously employed in the so-called gig economy, often working multiple jobs to pay for rent and food.

After the release of the Statistics Canada report, Canadian politicians pledged to address the problem. Chrystia Freeland, Minister of Finance in the Trudeau Liberal government until her dramatic resignation Monday, mustered a typical pro forma statement: “We are working very, very hard to lean against this tendency in the global economy towards more inequality. We’re leaning against it with very specific policies designed to support middle class Canadians and people working hard to join the middle class.”

This is a pack of lies. The rapid growth in income inequality and the concentration of wealth in a few hands at the top of society is the product of four decades of ruthless austerity for public spending and attacks on worker rights, combined with massive subsidies and tax breaks for corporate Canada, implemented at every level by all of the establishment parties.

The nine years of Liberal Party rule under Justin Trudeau, backed to the hilt by the trade unions and New Democrats, has accelerated this process. At the beginning of the pandemic, the Trudeau government handed over $650 billion with no strings attached to the banking and corporate elite. Over recent years, the government used a combination of high interest rates and rampant inflation to impose real-wage costs on the working class, while the rich and wealthy profited handsomely.

This record, and the systematic efforts of the Liberals’ union and NDP allies to suppress the class struggle by sabotaging strikes, has enabled the far-right demagogue Pierre Poilievre to pose as a friend of working people. The leader of the official opposition Conservative Party of Canada, who appears poised to take over as Prime Minister when the next election is called, tried to preposterously pose as the defender of working-class Canadians following the release of the StatsCan report. He told reporters at a press conference: “Today, Stats Canada reported that the gap between rich and poor is at its highest level in recorded history, after NDP-Liberal money printing inflated the assets of the super-rich while inflating the cost of living for everyone else.”

The reality is that the Trudeau government picked up in its policies from where its Tory predecessor under Stephen Harper left off. All of the major parties, including those of the Quebec establishment, have imposed ruthless attacks on the living standards of the working class since the 1980s. In the 1990s, the Liberal government of Prime Minister Jean Chretien presided over the largest social spending cuts in Canadian history despite budgetary surpluses. By 1998-1999, under Finance Minister Paul Martin, Ottawa’s spending on social programs dropped to 12 percent of GDP, the lowest level in nearly half a century.

In the early 2000s, the Liberals embraced a new campaign spearheaded by big business which centered on corporate and personal income tax cuts. These cuts were sold to the populace as a boost to middle-income Canadians. But, together with the reduction in capital gains taxes, the effect was to skew wealth distribution in favour of the most privileged.

During the financial crisis of 2008, Canada’s largest banks received bailouts from the Harper Conservatives to the tune of tens of billions of dollars. The massive state aid was offered with no strings attached. During the two-year bailout period, the banks remained highly profitable, generously rewarding shareholders and leading executives.

More recently, during the heights of the COVID-19 pandemic crisis, Canada’s Liberal government funneled hundreds of billions of dollars to the largest banks and major corporations. While the wealth of the country’s richest was protected, most working-class Canadians had to settle for below-inflation pay raises, further impoverishing large sections of the population. The trade union bureaucracies played an important role in helping the government and businesses ram through capped salary increases.

While the unpopular Liberal government of Justin Trudeau is touting new token measures to combat the cost-of-living crisis, including a two-month GST holiday on selected items, such tinkering around the edges will not fix the living cost crisis or the widening wealth gap. Furthermore, Canada’s international economic standing is deteriorating. The global crisis of capitalism is increasing the pressure on all world governments to squeeze the working class to make their economies more competitive to transnational finance capital and subordinate all of society’s resources to the waging of world war. Developed economies are turning to protectionism and economic nationalism, a situation reminiscent of the period that preceded World War II.

Arrest of top Brazilian general exposes military’s role in January 8 coup

Guilherme Ferreira

Gen. Walter Braga Netto (ret.) was arrested last Saturday, December 14, for alleged obstruction of justice in the investigation of the January 8, 2023 coup attempt in Brazil. The arrest of a four-star general is unprecedented in a country where even the bloody crimes of the US-backed military dictatorship (1964-1985) have gone unpunished. It has further exposed the critical role played by the military in the coup plot.

Gen. Walter Braga Netto [Photo: Fernando Frazão/Agência Brasil]

Braga Netto was one of the military officials closest to fascistic ex-president Jair Bolsonaro. Under Bolsonaro’s administration (2019-2022), he served as the military’s chief of staff and Defense Minister. In Brazil’s October 2022 election, Bolsonaro chose him as his vice-presidential running mate.

His arrest came three weeks after the Brazilian Federal Police (PF) indicted Bolsonaro, General Braga Netto and 35 other members of the Bolsonaro government, 25 of them military officers, for the crimes of violent abolition of the democratic rule of law, coup d’état and criminal organization to “maintain ... Bolsonaro in power, preventing the inauguration of the legitimately elected government” of Luiz Inácio Lula da Silva (Workers Party - PT).

According to the PF report on the coup attempt, General Braga Netto was a “central figure in the acts aimed at subverting the democratic regime in Brazil.” He is the person most cited, with 98 references to him in the report.

One of the most sinister elements of the coup plot was the “Green and Yellow Dagger” operation, which called for the assassination of Lula and Vice President Geraldo Alckmin, as well as the “arrest/execution” of Supreme Court (STF) Minister Alexandre de Moraes, who has been the rapporteur in numerous investigations against Bolsonaro since 2019, including in connection with the attempted coup. Minister Moraes was also president of the Superior Electoral Court (TSE) between 2022 and 2024, making him the central target of attacks by Bolsonaro and his political entourage in their baseless allegations of fraud in Brazil’s electronic voting system and the consequent results of the 2022 election.

The coup plot called for Braga Netto to become the coordinator of an “Institutional Crisis Management Office” to “advise the then President of the Republic JAIR BOLSONARO in the management of the facts arising from the institutional rupture,” according to the PF report. This office was to be primarily occupied by military personnel, serving as the pillar of a dictatorship.

Moraes’ “arrest/execution” was scheduled to take place on December 15, 2022. It was aborted because, according to the PF report, “the then [Army] commander, General FREIRE GOMES, and the Army High Command rejected the use of ground forces to provide the necessary support for then-president JAIR BOLSONARO to promote an institutional break.”

General Braga Netto’s arrest for obstruction of justice was based on testimony given by Lt. Col. Mauro Cid to Minister Moraes and the Federal Police on November 21 and December 5. Cid, who signed a plea bargain agreement after being arrested for falsifying Bolsonaro’s COVID-19 vaccination card, was the ex-president’s aide-de-camp. He was also indicted in connection with the coup attempt.

In mid-November, Cid’s plea bargain agreement was placed in question after the PF managed to recover messages and documents deleted from his electronic devices that showed he had omitted information about General Braga Netto’s role in the coup plot.

In his subsequent testimony, which let the PF maintain his plea bargain agreement, Cid gave new details about the “Green and Yellow Plan” and confirmed that Braga Netto contacted his father, Gen. Mauro César Lourena Cid, asking for details of his son’s plea bargain.

Cid confirmed that there was a meeting at Braga Netto’s house on November 12, 2022, shortly after Bolsonaro’s electoral defeat, which approved the “Green and Yellow Dagger” plan. Cid testified, according to the Federal Police, that “General Braga Netto delivered the money that had been requested to carry out the operation [Green and Yellow Dagger]. The money was delivered in a wine bag. General Braga Netto said at the time that the money had been obtained from agribusiness people.”

In fact, Brazilian agribusiness was one of the powerful sectors of the Brazilian bourgeoisie that most supported the Bolsonaro government. After Bolsonaro’s electoral defeat, it financed the protests by truck drivers who blocked roads across Brazil and the protest encampments in front of military headquarters demanding the intervention of the armed forces against alleged electoral fraud.

The Federal Police report pointed out that Gen. Mario Fernandes (ret.), “then Executive Secretary of the General Secretariat of the Presidency of the Republic, was the link between the then government of President JAIR BOLSONARO and the coup protesters, who were camped out in front of military installations calling for an institutional break.” General Fernandes is also the alleged author of the “Green and Yellow Dagger” plan and took part in the meeting at Braga Netto’s house on November 12, 2022.

Since Cid’s testimony, three more military officers were indicted on December 11 by the Federal Police in connection with the coup attempt. Among them was Lt. Col. Aparecido Andrade Portela (ret), who helped raise money from agribusiness for the January 8 coup. He is a close friend of Bolsonaro’s and was a deputy to Senator Tereza Cristina, who was Bolsonaro’s minister of agriculture and previously one of the most prominent representatives of agribusiness in the Brazilian Congress.

Braga Netto’s arrest prompted the Lula administration’s defense minister, José Múcio, to repeat the fraudulent narrative that the January 8 coup plot was the work of rogue military personnel, while the Armed Forces as an institution supposedly saved Brazilian democracy. On December 17, he said that although the military was “embarrassed” by Braga Netto’s arrest, it “was no surprise to anyone.”

However, General Braga Netto is no mere rogue officer. On the contrary, he personifies the military’s growing prominence in the country’s political life, a process that began at the end of the PT governments that ruled the country from 2003 to 2016, and which was fueled by the last decade’s growing economic and social crisis.

Having been blooded in the criminal United Nations “peace-keeping operation” in Haiti, under the PT government of President Dilma Rousseff (2011-2016), the Armed Forces began to suppress domestic social unrest through Law and Order Guarantee (GLO) operations, which allow the military to take charge of public security.

The government of Michel Temer (2016-2018), Rousseff’s successor, intensified this use of the military, particularly in the 2017 general strike against his labor and pension reforms and in the 2018 truckers’ strike. Meanwhile, he increasingly turned to the generals to fill key positions in his government, including in an unprecedented way in the Ministry of Defense.

It was during Temer’s administration that General Braga Netto began to stand out politically. As Eastern Military Commander (2016-2019), he headed the GLO operation in Rio de Janeiro during the 2016 Olympics, and, in February 2018 he was appointed federal intervenor in Rio’s public security. The appointments of Gen. Joaquim Silva e Luna as Minister of Defense, also in February 2018, and Braga Netto as head of public security in Rio were unprecedented milestones in the erosion of the civilian control over the military established after the fall of the military dictatorship in Brazil.

The Bolsonaro government intensified this process, filling its cabinet with military personnel, including the tapping of Gen. Hamilton Mourão for vice-president. The presence and importance of the military in the Bolsonaro government increased as the economic and social crisis driven by the COVID-19 pandemic intensified. The most notorious of these appointments was that of General Braga Netto as chief of staff in early 2020, when he took charge of the Bolsonaro government’s criminal response to the COVID-19 pandemic.

In April 2021, Braga Netto took over as Bolsonaro’s defense minister amid both the deadly second wave of the pandemic and the most serious military crisis since the end of the dictatorship after Bolsonaro fired the entire military command to align the Armed Forces behind his coup plans. In July 2021, Braga Netto, accompanied by the three heads of the Armed Forces, threatened the Brazilian Congress, saying that there would be no elections in 2022 if there were no “printed and auditable” ballots—a longstanding demand of Bolsonaro in his campaign to discredit electronic voting in Brazil.

Shortly before leaving the Army High Command and the Defense Ministry to run for vice president alongside Bolsonaro, Braga Netto ordered the publication of an order of the day to be read to the troops commemorating the military coup of March 31, 1964, as a “historical milestone in the political evolution of Brazil” against “the anti-democratic ideals of the communist uprising.”

10th COVID wave now surging in the US, amid total silence in the corporate media

Bill Shaw

The latest wastewater surveillance data show that the COVID-19 pandemic has entered its tenth wave in the United States. Last week’s spike in wastewater was the highest percentage increase in transmission in almost three years, though these figures could be revised downwards and the full severity of the wave will only become clear in the coming weeks. One reason for the rapid jump appears to be a later start for the “winter surge” than is typical, and thus the virus could be quickly rising to a level that has now become typical for this time of year.

The Pandemic Mitigation Collaborative (PMC) model estimates that 1.6 percent of Americans are presently infected and capable of transmitting the virus to others. That is 1 in 64 people and represents nearly 750,000 new COVID-19 cases per day. That means that on a flight of 100 people, there is an 80 percent chance that at least one person is infectious; on a flight of 300 people that rises to a 99 percent chance.

[Photo by Dr. Michael Hoerger, PMC]

This level of transmission exceeds the levels for 73 percent of the duration of the pandemic to date. Given the known incidence of Long COVID, the current levels of transmission are generating an estimated 200,000 new cases of Long COVID per week.

Not a word about this latest COVID-19 wave has been uttered by the Biden administration or any major outlet in the corporate media. The entire political establishment is in agreement on the need to enforce the pro-corporate policy of “forever COVID,” in which the working class and broad layers of society as a whole are condemned to unending waves of mass infection, death and debilitation with Long COVID.

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The PMC model projects that the current winter surge could peak between New Year’s Day and January 7. Because COVID-19 transmission followed a completely different pattern in 2024 than any other year of the pandemic, it is more difficult to forecast transmission during the current surge. This year’s summer surge was unusually late and sustained, while also declining abnormally rapidly, and the lull between the summer and winter surges was atypically long.

The latest data on test positivity and emergency department visits from the Centers for Disease Control and Prevention (CDC) show both these indicators on the increase. Hospitalizations and deaths are typically lagging indicators, and although they have not yet increased, they are likely to rise as well in the coming week or two.

The new XEC variant continues to increase as a percentage of COVID-19 infections, now estimated at 44 percent, compared to 33 percent a week ago. It is now the most common variant, having surpassed the KP3.1.1 variant per the most recent data.

Given the total absence of governmental support for the renovation of infrastructure to ensure that indoor air is purified in public spaces, the only defenses against COVID-19 continue to be vaccines and non-pharmaceutical measures, such as social distancing and masking. Vaccination additionally protects against the most adverse outcomes of COVID-19, including death and hospitalization, while providing moderate protection against Long COVID.

Unfortunately, misinformation coupled with the potential expense of paying for a costly vaccine have resulted in extremely low vaccination rates for COVID-19. Per the latest CDC data, only 21.0 percent of American adults reported that they have received the latest vaccine released at the beginning of the Fall. Coverage of children is even worse at 10.6 percent, or approximately half the rate of adults.

Dr. Alexander Sloboda, medical director of immunizations for the Chicago Department of Public Health, said:

There’s still a lot of misinformation, disinformation, particularly around the COVID vaccine, so just trying to overcome the misinformation, disinformation that’s out there with correct information is what we’re trying to do. Obviously, it’s a kind of an uphill battle.

In another development this week related to the science of COVID-19 treatment, a study from 2020 that purported to show that hydroxychloroquine was an effective treatment was finally retracted. According to the journal’s retraction notice, the paper was pulled because of ethical transgressions and major flaws in methodology.

Even though numerous scientists immediately spotted and exposed the flaws of the study, it took four years of campaigning before the journal editors finally relented and retracted the paper this month. In fact, a lead author on the study, Didier Raoult, at one point threatened legal action against the whistleblowers who challenged the study. One of the journal editors was a co-author of the study, likely a factor in the long time period between the paper being discredited and it being retracted.

The scientific discourse over the study included subsequent identification of additional serious methodological flaws in 2023. Recently, three of the study’s authors wrote a letter to the journal requesting a retraction, acknowledging that no confidence could be placed in the “results” and stating explicitly that they no longer wished to be associated with the paper.

Notably, Raoult has so far had 28 papers retracted, including this one. Raoult leads the French Hospital Institute of Marseille Mediterranean Infection (IHU). Overall, 32 papers authored by IHU members, including Raoult, have been retracted. Investigations are underway on at least 100 more papers by this group, mostly due to concerns that the studies violated ethical standards.

The discredited hydroxychloroquine study spawned massive misinformation promoting the drug as a treatment for COVID-19. The most infamous episodes involved then-President Donald Trump, who in a period of two months in 2020 made 11 tweets about unproven therapies for COVID-19 and mentioned them 65 times in White House briefings. Trump repeatedly referenced this now-retracted study, even after it had been discredited. During that time, purchases of hydroxychloroquine on Amazon surged by 200 percent.

With Trump returning to the presidency and having nominated a slate of anti-science quacks to every public health-related leadership position in the federal government—overseen by the notorious purveyor of anti-vaccine disinformation Robert F. Kennedy, Jr.—the working class must heighten its vigilance against medical misinformation and follow the advice of principled scientists. Any one of Trump’s nominees is damaging, but collectively it will be catastrophic when their pseudo-science becomes official policy.

Romania’s Constitutional Court annuls presidential elections

Andrei Tudora

Romania’s Constitutional Court decided on December 6 to annul the presidential elections, two days before the second round was scheduled to take place. The flagrant trampling upon the result of the vote was intended to block an expected win by Calin Georgescu, a neo-fascist candidate who had expressed skepticism of the war against Russia.

Calin Georgescu, center, an independent candidate for president who won the first round of presidential elections, makes his way, surrounded by media, to a closed voting station after Romania's Constitutional Court annulled the first round of presidential elections, in Mogosoaia, Romania, Sunday, Dec. 8, 2024. [AP Photo/Vadim Ghirda]

The Constitutional Court had already intervened in October, when it barred the participation in the election of another neo-fascist candidate, Diana Sosoaca. In Sosoaca’s case, the Court claimed that her “public discourse” threatened “the removal of essential guarantees of the state's fundamental values and choices, namely EU and NATO membership.”

The latest Court decision was based on the outgoing president’s declassification of secret service reports purporting to show a Russian “cyber-attack,” ostensibly responsible for Georgescu’s first round win. The reports did not provide any evidence, instead describing the candidate’s social media campaign, claiming it found a modus operandi “consistent with a state actor.” Lacking concrete arguments, the intelligence agencies instead focus on Russia’s supposed intents, which are proven by reciting previous unsubstantiated accusations and even the discussion of the topic of Romanian elections on Russian talk-shows.

Evidence or not, the reporting that followed in international and Romanian media declared the country the victim of a Russian “hybrid attack.”

The election campaign for the run-off was subsequently dominated by an atmosphere of official hysteria. It followed parliamentary elections, held on December 1st, that saw a third of the seats go to far-right parties, with traditional ruling parties—the Social Democratic Party (PSD) and National Liberal Party (PNL)—collapse to historic lows. All the main political parties, as well as editorials, podcasts, actors and universities rallied behind an official pro-EU and pro-NATO campaign, and the country’s “euro-Atlantic Road.”

This campaign was directed not against Georgescu, who was at pains to repeat that he was, in fact, a supporter of both the EU and NATO. It was first of all designed to browbeat widespread working-class opposition to the decades long policies pursued under the aegis of the two organizations.

There was a particularly surreal quality to endless pageants to the economic benefits of the European Union, as vast layers of the population throughout Europe are driven to poverty by price hikes and austerity measures.

In Eastern Europe, the restoration of capitalism by the Stalinist bureaucracy and the subsequent “European road” have produced an unmitigated catastrophe over the past 35 years. All forms of backwardness, anti-communism and national exceptionalism became official state dogmas, as vast swaths of the population were pauperized. Privatizations, mass unemployment and exodus of workers have been accompanied by the degradation of social and cultural life.

Bourgeois democracy, proclaimed by the former bureaucrats in the 1990’s, remained a dead letter. Accession to NATO was marked by the torture of prisoners in CIA torture centers and Romania’s participation in imperialist wars abroad, such as Iraq and Afghanistan.

With the decision of the traditional ruling parties to scrap the election result, while the main electoral alternative to these parties is a fascist, it is evident that bourgeois democracy, or the pretense of it, is rotting on its feet.

Eurostat figures for 2023 give a glimpse of the social wasteland left in the wake of EU integration. 32 percent of the population and 39 percent of children are classified as at risk of poverty and social exclusion. Sixty percent of people cannot afford a 1-week vacation and 23 percent cannot afford a meal with meat every other day.

Eurostat figures show 16 percent of youth are early leavers form education or training, while the Romanian Education Ministry admits to almost a third of youth were missing from the education system in the 2022-2023 school year. The number of youths that are neither in education nor in training is the highest in the EU, at 19.3 percent. According to National Statistics Institute, Romania has a 22 percent youth unemployment rate.

After the unprecedented gesture by the Constitutional Court, the main political parties are preparing for a large national unity government formed by the “pro-European parties,” a government that is set to carry out a ruthless policy of austerity and preparations for war with Russia.

President Iohannis, who will remain in office until at least the spring of next year, succinctly expressed the concerns of the Romanian ruling class: “I am saying this for the economy, for the investors, the financial markets, I am saying this for the EU. Romania remains a secure and solid ally, and I believe it is very important that we all know that Romania is not in any difficulty.”

The crisis in Romania reflects developments internationally, a broad realignment of bourgeois politics in line with the level of the international crisis. The new Government will be one of war against Russia and class war at home.

The EU has vowed to take measures against the “Chinese platform” Tik Tok, while both EU and US officials rushed to support the machinations of the Romanian establishment against the supposed Russia’s “hybrid war.”

Rather than the hallmarks of a “Russian operation,” the rise of Georgescu appears as the work of a section of the Romanian establishment that emulates the far-right movements cultivated by Trump supporters around the world. The fascist AUR party, to which Georgescu’s name is associated, attempted as far back as December 2021 a copy-cat attack on the Romanian Parliament building modeled on US President Donald Trump’s failed coup of January 6, 2021, on the US Capitol.

On December 8, Romanian police arrested 20 men headed for the capital, Bucharest, in possession of various weapons and explosives. The individuals were part of a paramilitary group headed by Horatiu Potra, a former mercenary and owner of a private military company. Potra, a far right activist and local politician with ties to mainstream parties, was featured prominently during the campaign as Georgescu’s bodyguard.

Sources close to the investigation told Romanian media that Potra’s men had prepared a list of journalists and politicians to be intimidated or attacked if Georgescu won the presidency. Other far right networks with ties to Georgescu have come to prominence in recent weeks, and Roma rights activists and public personalities received death threats. One of financial backers of the campaign, a crypto-currency mogul from the city of Brasov, directly compared his role to that played by oligarch Elon Musk in Trump’s campaign.

Georgescu also received support on social media from Musk and from Trump’s son, who ranted on X/Twitter about a “Soros/Marxist attempt at rigging the outcome & denying the will of the people.”

The networks linking Georgescu to international financial and fascist circles show that the antidemocratic decision to cancel his first-round victory will not stop the rise of far-right forces in Romania. While it seems likely that Georgescu will not be allowed to stand again, his networks will be reabsorbed into the fascist milieu that controls a third of the country’s parliament and that is now effectively the only opposition force in the legislature.

Mass casualties feared from Vanuatu earthquake

Mike Head

At least 14 people have died and hundreds more have been injured after a magnitude 7.3 earthquake struck off Vanuatu on Tuesday. The shockwaves caused widespread damage across the South Pacific island country, about 2,600 kilometres northeast of Sydney, Australia.

According to eye-witness accounts of flattened buildings and overwhelmed hospital services, mass casualties are expected among Vanuatu’s population of around 334,000. There have also been many aftershocks, including one of magnitude 6.1 early this morning.

Rescuers work to free survivors trapped in collapsed building, Port Vila, Vanuatu, December 18, 2024 [Photo: Michael Thompson]

Social media videos showed rescue efforts through the night trying to reach some people yelling under the rubble, including in a three-storey structure that collapsed onto its lower floors.

The central hospital in Port Vila, the capital, has been damaged, with tents set up outside for the influx of patients.

National broadcaster VBTC’s images showed badly injured people being carried in people’s arms or driven in flat-bed trucks to the hospital, where others lay in stretchers outside or sat on plastic chairs, their arms and heads wrapped in bandages.

Finau Leveni, the deputy head of delegation for the Red Cross in Fiji, said today that more than 200 people had been injured and this number was expected to increase.

The initial quake, which struck beneath the ocean about 30 kilometres west of Port Vila, triggered a tsunami warning. That led to hundreds of people in the city of 50,000 fleeing low-lying areas. The warning was later cancelled.

A seven-day state of emergency has been declared by Vanuatu’s caretaker Prime Minister Charlot Salwai. It includes a curfew from 6 p.m. to 6 a.m., and proclaims that only essential services should operate.

A former British and French joint colony, made up of roughly 80 islands that stretch 1,300 kilometres, Vanuatu is in the Pacific “Ring of Fire,” where tectonic plates collide. It experiences frequent seismic and volcanic activity.

The US Geological Survey said: “The area where the Australia and Pacific plates meet is among the world’s most seismically active. In the century leading up to the December 17, 2024 earthquake, there were 24 earthquakes of magnitude 7 or larger within 250 kilometres of this event.”

Residents said this was the most serious earthquake they had experienced. Local journalist Dan McGarry told the Australian Broadcasting Corporation (ABC) that some buildings were “pancaked” by the “high-frequency shake” that lasted for about 30 seconds.

“It was a violent earthquake, more violent than any that I’ve seen in the last 21 years that I’ve been living in Vanuatu,” he said.

McGarry said a mass casualty triage centre was being established outside the hospital’s emergency ward. “There were several people there, three that I could see who were seriously injured, lying on gurneys, a great many others… walking around with minor injuries,” he said.

“There are buildings collapsed in the centre of town, so I’m quite certain that the casualty figure is going to rise.” He said there were “extensive landslides” on the road joining the Port Vila wharf to the city, and there were early reports that the runway at the city’s airport had been damaged.

Clement Chipokolo, World Vision’s country director for Vanuatu, told the ABC that he expected the death toll to rise due to the “quite significant damage.” He reported: “We observed as we drove around a number of buildings that were flattened completely. So we imagine that there are still some people that are under those buildings.”

Chipokolo said damage to critical infrastructure such as electricity and phone lines was hampering the recovery efforts. “Lights are completely out… We don’t have water across the city, and most of our communications systems are down.”

“We anticipate that the number of deaths will continue to go up, given the number of people that are being treated as casualties.” He said Vila Central Hospital was already under strain before the quake and now “they definitely are not coping.”

Video footage posted to social media shows damage to the building hosting the US, French, UK and New Zealand diplomatic missions, with a section of the building cleaving off and flattening the first floor.

The US Embassy’s Facebook page said all staff were safe, but the building was closed until further notice. The office opened in July as part of an aggressive push by the Biden administration to expand the US presence in the South Pacific to combat China’s influence in the region.

The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) estimated 116,000 people had been affected by the earthquake. Basic aid, including clean drinking water, is urgently needed.

Vanuatu is still recovering from the impact of damaging earthquakes and cyclones that affected 80 percent of the population in 2023.

The response of the region’s imperialist powers to the latest disaster has been limited, however. Australia will send two air force transport planes carrying a medical team and a search and rescue team to Vanuatu today, Australian Defence Minister Richard Marles said.

Australian Foreign Minister Penny Wong stated: “We are closely monitoring the situation and stand ready to provide further assistance to the people of Vanuatu as the extent of damage becomes clear… Australia and Vanuatu share a deep and enduring partnership. We are family and we will always be there in times of need.”

A New Zealand military surveillance plane was due to fly above Vanuatu today to assess the damage. New Zealand Foreign Minister Winston Peters said his country hoped to send aid and equipment later today when the airport was cleared for use.

“With communications still badly affected as a result of the earthquake, it is going to take some time to work through with Vanuatu what assistance it needs in the days ahead,” Peters said.

French and US officials also promised to mobilise aid.

For all the language of “family,” France and the UK colonised the strategic archipelago in the 1880s and retained shared control over it, naming it the New Hebrides, until 1980. In collaboration with the US and France, Australia and New Zealand have maintained neo-colonial control over the region, keeping Pacific nations in a state of impoverishment.

Vanuatu and other Pacific states have increasingly found themselves at the centre of intensifying geo-strategic rivalry, primarily the result of the increasingly aggressive US confrontation against China.

Last year, Vanuatu was embroiled in a political crisis that led to Salwai becoming prime minister after the signing of a neo-colonial security agreement with Australia in December 2022 that allowed for a dominant Australian military presence. The agreement had been signed during a regional tour by Wong to advance the US drive to line up Pacific states behind Washington and against Beijing.

US, UK hail murder of Russian lieutenant-general in charge of nuclear defense

Andre Damon

On Tuesday, Igor Anatolyevich Kirillov, a lieutenant general in charge of Russia’s nuclear and biological defense forces, was killed in a bombing outside his apartment in Moscow.

Workers load a body of Lt. General Igor Kirillov, the head of Russia's Nuclear, Biological, and Chemical Defence Forces into a bus after he and his assistant Ilya Polikarpov were killed by an explosive device planted close to a residential apartment's block in Moscow, Russia, Tuesday, Dec. 17, 2024. (AP Photo) [AP Photo]

Russian investigators said Kirillov was killed after “an explosive device planted in a scooter parked near the entrance of a residential building was activated on the morning of December 17 on Ryazansky Avenue in Moscow.”

The Ukrainian security sources promptly informed every major US and British newspaper that they had carried out the bombing as a deliberate assassination.

The murder was carried out just hours after Ukraine’s secret service filed a “notice of suspicion” against Kirillov, alleging, without substantiation, that troops under his command used biological weapons. Kirillov was “responsible for the mass use of banned chemical weapons by the Russians against the defense forces on the eastern and southern fronts of Ukraine,” the notice read.

“Kirillov was a war criminal and a completely legitimate target, as he gave orders to use banned chemical weapons against the Ukrainian military,” a Ukrainian intelligence official told the Financial Times Tuesday. “Such an inglorious end awaits all who kill Ukrainians. Retribution for war crimes is inevitable.”

In October, the UK sanctioned Kirillov, calling him a “significant mouthpiece for Kremlin disinformation.”

The bombing is the latest in a series of assassinations of high-ranking Russian military and political figures carried out by Ukrainian forces. Kirillov is the highest-ranking Russian military figure to have been assassinated.

While claiming not to have been informed, US and UK officials praised the killing.

A spokesperson for UK Prime Minister Keir Starmer said: “It’s clear we won’t be mourning the death of someone who orchestrated an illegal invasion and inflicted immense suffering and loss on the Ukrainian people.”

Kirillov “was a general who was involved in a number of atrocities,” said US State Department spokesperson Matthew Miller. “He was involved in the use of chemical weapons against Ukrainian military.”

If the Ukrainian and American governments have not publicly and officially taken credit for the murder, it is because assassination and terrorist bombings are both war crimes.

The Geneva Conventions declare that “it is prohibited to kill, injure or capture an adversary by perfidy.” The use of a terrorist bombing, using a civilian object, is clearly such a crime.

The US and UK media glorified this act of terrorism and murder, with the Telegraph calling it “ingenious,” while the Wall Street Journal called it “audacious.” The New York Times reported on a video of the murder sent to it by the Ukrainian secret service in breathless terms. Predictably, not a single major news publication condemned it.

The US media has repeatedly glorified terrorist actions and assassinations by Ukrainian forces. Just days before Russian far-right media figure Daria Dugina was murdered in August 2022, the New York Times ran a laudatory profile of Ukrainian assassination squads operating inside Russia, under the headline, “Behind Enemy Lines, Ukrainians Tell Russians ‘You Are Never Safe.’”

The Wall Street Journal wrote Tuesday that “Ukraine has at times recruited people inside Russia who have shown a willingness to aid the Ukrainian cause, and given them detailed instructions on how to orchestrate attacks. Tuesday’s attack had the hallmarks of a higher-level operation.”

The murder of a Russian lieutenant general is part of a pattern by the United States and its proxy forces, including Israel and Ukraine, of using terrorist bombings in pursuit of its military aims.

On September 17 and 18, 2024, thousands of pagers rigged by Israeli forces exploded in Lebanon, killing 42 people and injuring thousands. Later that month, Israeli forces murdered Hezbollah leader Hassan Nasrallah using 20 bunker-buster bombs.

Last week, Ukrainian forces claimed that they killed Mikhail Shatsky, a leading Russian missile scientist, in Moscow. This followed the murder of Capt. Valery Trankovsky, commander of the 41st brigade of Russia’s Black Sea Fleet, who was killed in a car bombing in November.

Even with this bloody legacy behind them, the murder of a general in command of a branch of the Russian armed forces marks a major escalation.

While Kirillov did not appear to be in the chain of command for Russian nuclear weapons as head of Russia’s Troops of Radiological, Chemical and Biological Defense, he would have played a significant role in Russian nuclear war planning.

In murdering such a figure, the United States, through its Ukrainian proxy force, is making clear that there is no length it will not go to in seeking to subjugate Russia. It has, once again, demonstrated its willingness to cross all of the “red lines” declared by the Putin government and by the Biden administration for its own involvement in the war.

Last month, the US and UK authorized the use of NATO-provided long-range weapons for strikes deep inside Russia, followed just days later by the use of these weapons in strikes on Russian military targets.

The Biden administration is doing everything in its power to create “facts on the ground” that guarantee the continued escalation of the war after it leaves office.

For its part, the Trump transition team has made a point of embracing the Biden administration’s escalation of the war. “For our adversaries out there that think this is a time of opportunity, that they can play one administration off the other, they’re wrong,” said Mike Waltz, Trump’s nominee for national security adviser, last month. “We are hand in glove,” Waltz added. “We are one team with the United States in this transition.”

The deep rift in the global economy and its significance

Nick Beams

There is an extraordinary dichotomy in the world economy for which there is no parallel except for the “roaring twenties” of a century ago when a US boom led to the stock market crash of 1929 and the onset of the Great Depression.

As the rest of the world—all the major economies—struggle to record even a positive growth rate, let alone consistent expansion, the US is in the midst of a financial boom as money pours into its stock market and financial system from the rest of the world.

This phenomenon, which has markedly increased since the onset of the pandemic, has been accelerated by the financial hype surrounding the development of artificial intelligence (AI), reflected in the rise of the AI firm Nvidia from an also-ran among tech stocks to the second biggest US firm by market capitalization.

President-elect Donald Trump, with Lynn Martin, President NYSE, center, Melania Trump, right and trader Peter Giacchi, left, walks the floor of the New York Stock Exchange, December 12, 2024. [AP Photo/Alex Brandon]

And it has been intensified with the election of Trump to the US presidency, his placing of financial oligarchs in control of key areas of his administration, his commitment to cuts in corporate taxes, and the virtual scrapping of what remains of financial regulations.

It would take more space than we have available here to detail all the indications of the gathering slump in the global economy. Suffice it to point to some outstanding expressions of this process.

In Germany, the world’s third-largest economy and once the powerhouse of Europe, a wave of sackings is underway across manufacturing industry, the backbone of its economy. This is not a conjunctural downturn, from which a “recovery” can be expected in the course of the business cycle, but the disintegration of its very foundations.

Headlines in the financial press pose the question “Is the German business model broken?” The answer increasingly being given is yes.

In November, the Financial Times (FT) cited comments by Deutsche Bank’s chief economist Robin Winkler that the fall in industrial production was “the most pronounced downturn” in Germany’s post-war history.

Last September, Siegfried Russwurm, the president of the Federation of German Industry, warned: “Germany’s business model in grave danger—not some time in the future, but here and now.” He said that by the year 2030, one-fifth of Germany’s industrial production could disappear, and that “deindustrialization is a real risk.”

The mass sackings in steel and the auto industry—the threatened closure of three VW plants—have attracted international attention. But the crisis does not stop there. Chemical production, in which Germany has been a world leader since the last decades of the 19th century, is now down 18 percent on its 2018 levels.

A report by Germany’s Bundesbank issued last week slashed its forecast for growth in 2025 from 1 percent to near zero and warned that a US tariff war could push it into recession.

The central bank said that under current assumptions, Germany would grow by only 0.1 percent next year, but if Trump followed through on his threats to impose a 10 percent tariff on European goods and 60 percent on Chinese exports to the US, German GDP could fall by 0.6 percentage points.

Significantly, Bundesbank president Joachim Nagel, who insisted in September that “Germany is not in decline,” noted in his remarks on the latest report: “The German economy is struggling not just with persistent cyclical headwinds but also with structural problems.”

The latest data coming out of China, the world’s second-largest economy, and the major source of global economic growth since the global financial crisis of 2008–09, show it is struggling to reach its official growth target of “around 5 percent” this year—the lowest in more than three decades—and growth could fall even lower next year.

Alarm bells are ringing in Beijing and growing louder. Figures released earlier this week showed consumption spending grew by only 3 percent in the year to November, below predictions of a 4.6 percent rise and the increase the previous month of 4.8 percent.

At its annual Central Economic Work Conference last week, the Chinese Communist Party leadership called for “vigorous” efforts to boost consumption, and its report listed the issue as the top priority, significantly ahead of the call to develop “new productive forces” which has been the central pillar of the economic program advanced by President Xi Jinping.

Earlier this month, the government called for a shift in the stance of monetary policy from “prudent” to “moderately loose”—the first time such language has been used since the 2008 crisis—in a bid to try to boost the economy.

Japan has been well out of the picture as a center of global growth for decades and has struggled against persistent deflationary pressures, with its growth rate coming in only at between 1 percent and 2 percent at best. Its decline was expressed earlier this year when it lost its position as the world’s third-largest economy to Germany and was demoted to fourth place.

One could also cite the case of the UK or middling economies such as Australia where, but for government spending, the economy would be going backward, and per capita GDP has declined for seven quarters in a row.

By contrast, the US economy appears to be roaring ahead as money pours into its financial markets. While the prevailing sentiment is that the US will continue to power ahead, warnings are being sounded.

Regular FT commentator Ruchir Sharma, the chair of Rockefeller International, in a recent piece entitled “The mother of all bubbles,” detailed the extraordinary inflow of money into Wall Street and noted the rise of “American exceptionalism” in financial circles.

Global investors, he wrote, “are committing more capital to a single country than ever before in modern history” with the result that the US “accounts for nearly 70 percent of the leading global stock market index, up from 30 percent in the 1980s.” The divorce of the financial sector from the underlying real economy is highlighted by the fact that the US share of the global economy is 27 percent.

The drawing power of the US in global debt and private markets is stronger than ever. So far in 2024, “foreigners have poured capital into US debt at an annualized rate of $1 trillion, nearly double the flows into the eurozone” with the US attracting 70 percent of the flows into the $13 trillion market for private investments.

Sharma said talking about tech or AI bubbles obscured the broader picture. “Thoroughly dominating the mind space of global investors, America is over-owned [meaning that everyone who wants to hold a stock has already done so], overvalued, and overhyped to a degree never seen before.”

In a follow-up column, he noted he had received some pushback in response to his initial assessment, with virtually every Wall Street analyst insisting US stock would continue to rise. But clearly drawing on historical experience, he noted that “all this enthusiasm only tends to confirm that the bubble is at a very advanced stage.”

The flaw in the US economy, he noted, was its “sharply increasing addiction to debt” and that it now took nearly $2 of additional debt to generate an additional $1 of GDP, a 50 percent increase in the past five years.

“If any other country were spending this way, investors would be fleeing, but for now, they think America can get away with anything, as the world’s leading economy and issuer of the reserve currency.”

Another factor fueling the American bubble is the belief, at least in some sections of the financial markets, that the Trump tariff war, especially against China, is going to have beneficial effects.

Long-time China analyst Stephen Roach, the former head of Morgan Stanley Asia, outlined some of the underlying realities of the US-China economic relationship. He began by pointing to Beijing’s response to the latest US measures with the ban on exports of critical minerals. These were a “reminder that retaliation is the high-octane fuel of conflict escalation.”

He said there was a mistaken view in US policy circles that the relationship with China was one way, leaving out the other half of the equation.

“The US is also heavily reliant on low-cost Chinese goods to make ends meet for income-constrained consumers; the US needs Chinese surplus saving to help fill its void of domestic saving; and US producers rely on China as America’s third-largest export market. This co-dependency means the US depends on China just as China depends on America.”

He pointed to the ultimate Chinese financial weapon—its holdings of US Treasury bonds, government debt, amounting to more than $1 trillion, comprising $772 by the People’s Republic and $233 billion emanating from Hong Kong.

If China began withdrawing its holdings or even failed to turn up at auctions of Treasury debt, “this would be devastating for America’s deficit-prone economy and would unleash havoc in the US bond market, with wrenching collateral damage in world financial markets.”

The prevailing view among “cavalier Americans” is that China would not “dare flirt with this nuclear option” because the damage would be too great. But while such a scenario may seem far-fetched, because it would produce a financial meltdown, it would be “reckless to dismiss the ‘tail risk’ consequences of a trapped adversary.”

As we noted at the outset, the only parallel with the present situation is the “roaring twenties.” There is a perception that the Wall Street crash, which sparked the Great Depression, simply emerged out of the blue.

In fact, there were growing signs of what was to come before the events of October 1929. By 1927–28, there were clear indications of a developing slump, especially in Germany, which led to a series of political crises.

The financial catastrophe which followed—depression, mass unemployment, fascism, dictatorship, and eventually world war—posed the objective necessity for world socialist revolution as the only answer to the barbarism unleashed by the crisis of capitalism.