Rising gold price a sign of emerging financial crisis

Nick Beams

The publication by the Financial Times (FT) of a comment by one of its leading editorial writers on the soaring price of gold is an indication that this issue is starting to raise concerns in financial circles about what it signifies for the stability of the global monetary system based on the US dollar.

Gold bars [AP Photo/Seth Wenig]

The article by Rana Foroohar on Monday, entitled “Gold is back—and it has a message for us” began: “It’s easy to mock gold bugs, but their moment may finally have come.”

She pointed to several immediate factors for the rise, which has seen the gold price escalate from around $1,800 last year to close to $2,400. These included higher than expected inflation in the US, anxiety over geopolitics, the US presidential elections and uncertainty over monetary policy.

However, there were longer-term factors at work, including higher for longer inflation which aside from a “technology-driven productivity miracle” looks to be a real prospect.

One of the major factors to which she pointed was the vast shift in the global economic order.

“It is no secret that the Washington consensus—which expected emerging nations to fall in line with free-market trade rules written by the west—and the postwar Pax Americana are over.”

Trade tensions with China are growing and the weaponisation of the dollar after the outbreak of the Ukraine war—when the US and the European powers froze the financial assets of Russia’s central bank—had “quickened moves in many countries, especially China, to sell Treasury bills and buy gold as a hedge against America’s financial might.”

What she termed a “pendulum shift” had led many analysts to predict a “massive run-up in gold.”

Two economic strategists at BNP Paribas Fortis, a major European bank, have predicted that gold could rise from its present level of $2,347 per ounce—already a record high in monetary terms, although not yet when adjusted for inflation—to $4,000 in “the not-too-distant future.”

As one of the analysts put it, “this isn’t just an interest rate thing. People are hedging against a new world.”

That “new world” is characterised above all by war and the division of the world into rival blocs on both the economic and political fronts. There are moves by a number of countries, not only China, to make trade payments in their own currencies and bypass the dollar.

A recent report by Currency Research Association, cited in the article, noted: “China buying gold and selling Treasuries mirrors how Europe’s central banks began to redeem dollars for gold in the late 1960s as the Bretton Woods system began to break apart.”

Bretton Woods system, which was aimed at restoring the international financial system that had been shattered by the Great Depression of the 1930s, established the US dollar as the global currency. It was backed by gold at the rate of $35 per ounce.

But it was marked by a profound contradiction which was identified in the early 1960s. The functioning of the system required an outflow of dollars from the US to the rest of the world to finance trade and investment. At the same time the build-up of dollars outside the US undermined its capacity to redeem them for gold.

This was not a problem initially because of the enormous strength of the US relative to the other major capitalist powers. But as those economies recovered from the devastation of the war and more productive industrial methods were introduced, the competitive supremacy of the US was eroded.

The turning point came when the US balance of trade went negative, leading US President Nixon to remove the gold backing from the dollar on August 15, 1971.

Since then, the world has operated with the dollar as a fiat global currency. Unlike gold, which embodies value, paper dollars have no intrinsic value. They can function as world money, facilitating trade, investment, credit and acting as a store of value to the extent they are backed by the economic power of the US state and its financial system.

That power is now increasingly called into question. It was severely shaken by the global financial crisis of 2008, originating in the orgy of speculation by US banks, which, but for massive intervention by the Federal Reserve, would have led to the collapse of the world financial system.

Since then, it has been delivered further major shocks including in March 2020 at the start of the pandemic. The US Treasury market froze for several days—there were no buyers for US debt, supposedly the safest financial asset in the world—and the Fed had to again intervene to the tune of around $4 trillion.

The role of the US dollar has provided enormous advantages to US imperialism. It has allowed it to run up deficits and debts, much of which has been used to finance military spending and wars, in a way not possible for any other economy.

There are now very clear indications that as a result of this process, a new crisis is brewing which has parallels with what took place in 1971, but at a much higher level.

As Foroohar noted in her comment piece, echoing sentiments expressed at the highest levels of the US financial system, including by Fed chair Jerome Powell, the pile-up of US government debt is “quickly becoming unsustainable.”

“The most recent Congressional Budget Office (CBO) projections put US debt as 99 percent of GDP at the end of this year, and have it on track to reach 172 percent by 2054. If this happens the result would be monetisation [a situation where assets based on debt would essentially become worthless], inflation, financial repression and a period of extreme chaos in monetary policy and markets.”

Such a situation is not 30 years down the track but very much an emerging present-day reality because of the accelerating growth of the debt mountain. When interest rates were near zero, because of the Fed’s quantitative easing program, the problem could be covered over.

Not any more, with the Fed rate at around 5 percent, the highest in 20 years.

According to the CBO, the US budget deficit will rise by almost two-thirds over the next decade, from $1.6 trillion to $2.6 trillion, with three-quarters of that rise coming from the interest bill, making it a larger component than the bloated military budget.

The potential for a financial crisis in the near future was indicated by the director of the CBO, Phillip Swagel, in an interview with the FT last month.

He said the US fiscal situation was on an “unprecedented” trajectory, raising the risk of a Liz Truss-style financial crisis when the short-lived UK prime minister tried to finance tax cuts for corporations and the wealthy in September 2022 by running up debt.

There are decisive social, economic and political—that is class issues—in the present situation.

It appears at times that the financial system operates somewhere way above everyday life, even assuming a kind of illusory character as central banks create money out of nothing with the press of a computer button. However, in the final analysis, it depends on the value which can be extracted from the working class in the real economy.

As the bitter experiences of 2008 revealed, a financial crisis means sweeping attacks on wages, the destruction of jobs and the evisceration of vital social services.

Another crisis, for which all the conditions are being created, will bring an even deeper assault. One of the warning signs is the rising price of gold—the historically-determined ultimate store of value.

EU and Berlin step up attacks on refugees

Marianne Arens

On Monday, German Interior Minister Nancy Faeser (Social Democrats, SPD) visited the city of Plovdiv in southern Bulgaria. There she inspected the barbed wire fence on the border with Turkey, which serves as a model to seal off the European Union to refugees.

The border, which is almost 260 kilometres long and secured by a double fence, is notorious for brutal pushbacks, i.e., illegal deportations by the Bulgarian border police. Yet it is precisely there, at a border crossing called Kapitan Andreevo, that a pilot project of the Common European Asylum System (CEAS) is to be set up. This clearly shows the extreme right-wing attitudes that now prevail in the European Union.

Protest against the CEAS on 10 April in Brussels [Photo by Laura Vaca / pressenza]

With the final adoption of the CEAS on April 10, the European Parliament has effectively suspended the right to asylum and turned the immigration policies of the extreme right into law. The measures adopted provide for Europe’s external borders to be hermetically sealed off. This means that refugees will have to undergo their asylum procedure outside the EU in closed, militarily guarded detention centres.

Completely sealed off, people traumatised by war, forced migration and fleeing danger, including children, will have no access to legal, medical or psychological support in such camps. Instead, they are detained, screened, registered, and selected with the primary aim of deporting as many as possible as quickly as possible—often to the same countries from which they fled, or even to so-called safe third countries. Their number has been increased as part of the reform, which means that even more deportations are possible.

As the WSWS has already shown, CEAS means the “abolition of the right to asylum, the extension of Fortress Europe, mass deportations and the detention even of women and children in deportation facilities similar to concentration camps.”

During the vote on April 10, refugee supporters demonstrated in front of the EU Parliament in Brussels. Some shouted from the visitors gallery in the plenary chamber to the MEPs: “Be human, vote NO!” Others threw paper aeroplanes into the chamber with the coordinates of shipwrecked people and information about refugees who had died while fleeing.

Marine accidents with fatalities occur almost every day in the Mediterranean. On the same day that MEPs approved the CEAS, a life-threatening incident occurred off the North African coast, as reported by the rescue organisation Seebrücke.

The “Mare Jonio” had rushed to the aid of shipwrecked people and tried to rescue them from a sinking boat whose engine had failed. The EU-funded Libyan coastguard then turned up and ordered the rescue ship to move away immediately, which it did not do. The coastguard militias “carried out dangerous manoeuvres around the boat and fired into the air. ... Panic broke out and people jumped into the water.” In the end, the “Mare Jonio” was able to bring a total of 56 people to Pozzallo, Italy.

Every year, thousands of refugees freeze to death, starve or drown at Europe’s borders. According to Statista, almost 30,000 people have drowned while fleeing across the Mediterranean in the last 10 years. This year alone, at least 459 people had already died at sea in the Mediterranean by the end of March.

Migrants and refugees wait for assistance on an overcrowded wooden boat, as aid workers of the Spanish NGO Open Arms approach them in the Mediterranean Sea, international waters, at 122 miles off the Libyan coast [AP Photo/Bruno Thevenin]

Thousands of others die in the dangerous attempt to cross a border like the one in southern Bulgaria. Or they are crammed into overcrowded camps such as Moria (Greece) for an indefinite period. Or they are picked up on the high seas by the Libyan coastguard and forced back into the hell of a detention centre in Libya.

Nancy Faeser favours and promotes the murderous European asylum system in the name of the coalition government of the SPD, the Greens and Liberal Democrats (FDP). For the past six months, she has also been in favour of the massive expansion of surveillance at the EU’s external borders by Frontex, a project being pursued by EU Commission President Ursula von der Leyen (Christian Democrat, CDU) together with Giorgia Meloni, Italy’s fascist prime minister.

In Germany itself, the SPD-led government is also increasingly openly realising the policies of the far-right Alternative for Germany (AfD). On January 18, the Bundestag (parliament) passed the shameful Repatriation Improvement Act with the votes of the coalition parties.

At the beginning of April, it was agreed to introduce a payment card for asylum seekers, which refugee support organisation ProAsyl rightly calls a “discrimination concept” and which serves exclusively as a deterrent and for anti-refugee propaganda. Refugees’ lives are made more difficult by the fact that they no longer have access to cash and can no longer send money to their families abroad. Refugees and immigrants are being increasingly stigmatised.

The militarisation of society as a whole is accompanied by intolerable nationalist agitation and propaganda. In order to divide and weaken the working class, the federal coalition relies on racism and the spectre of “foreign criminality.” In the media, immigrants and asylum seekers are only mentioned in connection with robbery, rape, drugs and terrorism.

Shortly before the CEAS was passed in the EU Parliament, Faeser presented the police crime statistics at the Federal Press Conference on April 9. Together with the president of the Federal Criminal Investigation Agency (BKA), she called for “tough action,” “swift action by the authorities” and a policy of zero tolerance. Faeser claimed, “The connection is correct that increasing immigration has led to more criminal offences.”

That is pure demagoguery. The crime statistics record all cases investigated by the police, even if no final court judgement has yet been made. It is well known that immigrants are prosecuted much more severely. The vast majority of cases are also petty offences, such as shoplifting or fare evasion, which are mainly committed by poorer people. The statistics also include physical confrontations in reception camps, where traumatised refugees fleeing war and hardship are crammed into very confined spaces and condemned to inactivity and a lack of prospects.

By contrast, the statistics exclude financial and tax offences committed by the rich as well as the political crimes of the ruling class. Instead, the figures paint a picture of a class society in which non-Germans at the bottom are not only perpetrators, but very often also victims.

Israel strikes Iran as US and EU impose a new round of sanctions

Andre Damon

Israel carried out an airstrike on Iran Friday morning, a US official told major US news outlets. Iranian state TV reported that three drones were shot down over the Isfahan air base.

The move came just hours after the United States and its European allies on Thursday announced a new round of sanctions targeting Iran, deepening their participation in a spiraling war in the Middle East.

In a statement announcing the sanctions, US President Joe Biden declared, “I’ve directed my team, including the Department of the Treasury, to continue to impose sanctions that further degrade Iran’s military industries.” He continued, “Let it be clear to all those who enable or support Iran’s attacks: The United States is committed to Israel’s security.”

The same day, UK Prime Minister Rishi Sunak announced a new round of sanctions targeting Iran. Biden and Sunak were joined by the European Council, which declared that sanctions would be imposed in order to “isolate Iran.”

The sanctions come after days of declarations by Israeli officials that they intend to carry out an attack on Iran following Tehran’s retaliatory strikes on Israel over the weekend. On Wednesday, Israeli Prime Minister Benjamin Netanyahu declared that Israel will “do everything necessary to defend itself” and that “we will make our own decisions” with regard to attacking Iran.

This statement came one day after UK Foreign Minister David Cameron, following a meeting with Iranian officials, said, “It’s clear the Israelis are making a decision to act.”

Meanwhile, Iranian officials vowed that any strike by Israel would be met with overwhelming force, with Iranian Maj. Gen. Ahmad Haghtalab warning that “the hands are on the trigger” to retaliate against Israel’s nuclear sites.

In an interview with CNN, Iranian Foreign Minister Hossein Amir-Abdollahian declared, “In case the Israeli regime embarks on adventurism again and takes action against the interests of Iran, the next response from us will be immediate and at a maximum level.”

The Middle East is poised on the knife-edge of full-scale war. In an address to the UN Security Council, UN Secretary-General Antonio Guterres warned, “One miscalculation, one miscommunication, one mistake could lead to the unthinkable: a full-scale regional conflict that would be devastating for all involved and the rest of the world.”

In a further endorsement of Israel’s genocide in Gaza and its military escalation against Iran, the United States vetoed a resolution in the UN Security Council to make Palestine a full member-state of the United Nations.

Absurdly, the US carried out this action while proclaiming its support for a so-called “two-state solution.” In a statement, US Ambassador to the UN Robert Wood said, “The United States will continue to oppose unilateral measures that undermine the prospect of a two-state solution. This includes any actions that violate the principles that Secretary Blinken has emphasized for months, that Gaza cannot be a platform for terrorism.”

In a statement in response, the Palestinian presidency rebuked the US action, which it described as “unfair, immoral and unjustified.” The statement read, “This aggressive American veto reveals the contradictions of American policy, which claims, on the one hand, to support the two-state solution, while it prevents the international institution from implementing this solution through its repeated use of the veto in the Security Council against Palestine and its legitimate rights.”

Ziad Abu Amr, special envoy of the Palestinian presidency, asked, “How could this damage the prospects of peace between Palestinians and Israelis? How could this recognition and this membership harm international peace and security?”

The Biden administration is increasingly framing its escalating conflict with Iran as part of a globe-spanning war targeting Russia and China. In an op-ed in the Wall Street Journal, Biden drew an equivalence between the US conflicts with Russia and China, claiming, “Both Ukraine and Israel defended themselves against these attacks, holding the line and protecting their citizens. And both did it with critical help from the U.S.”

He continued, “But while both countries can capably defend their own sovereignty, they depend on American assistance, including weaponry, to do it. And this is a pivotal moment.”

He declared, “Vladimir Putin is ramping up his onslaught with help from his friends. China is providing Russia with microelectronics and other equipment that is critical for defense production. Iran is sending hundreds of drones; North Korea is providing artillery and ballistic missiles.”

He concluded with a threat: “ ‘An attack on one is an attack on all’ means that if Mr. Putin invades a NATO ally, we will come to its aid—as our NATO allies did for us after the Sept. 11 attacks.”

This conception forms the rationale for the US support for the Gaza genocide, which it sees as a critical element of its effort to dominate the Middle East. Amid mass starvation and continuous bombing, the humanitarian situation in Gaza remains disastrous.

In a statement, UN Secretary-General Antonio Guterres said, “In Gaza, six and a half months of Israeli military operations have created a humanitarian hellscape. Tens of thousands of people have been killed. Two million Palestinians have endured death, destruction, and the denial of lifesaving humanitarian aid; they are now staring down on starvation. An Israeli operation in Rafah would compound this humanitarian catastrophe.”

He continued, “The casualty figures are overwhelming and unprecedented in speed and scale during my time as Secretary-General. According to UNICEF, more than 13,900 Palestinian children have reportedly been killed in intense, often indiscriminate attacks.”

Under these conditions, there are indications that the United States is moving toward an open endorsement of Israel’s planned assault on Rafah.

On Thursday, US National Security Advisor Jake Sullivan met with Israeli officials to discuss the Rafah attack. The official readout of the meeting noted: “The two sides agreed on the shared objective to see Hamas defeated in Rafah. U.S. participants expressed concerns with various courses of action in Rafah, and Israeli participants agreed to take these concerns into account.”

In a press briefing Thursday, Pentagon spokesperson Pat Ryder declared, “We understand the need for Israel to go after Hamas and to eliminate or defeat Hamas as a threat.”

Meanwhile, the death toll of the Gaza genocide has reached 33,970, with 76,770 more wounded, according to the latest figures from Gaza’s Health Ministry.

Global pandemic agreement undermined by corporate interests

Bill Shaw

The efforts of the World Health Organization to develop a global approach to preparing for and preventing future pandemics have suffered a setback at the hands of wealthy nations. What began as a weak and insufficient pandemic agreement was subsequently watered down even further in recent negotiations. But this was still not enough to appease global corporations and the nations that do their bidding.

In a desperate move to reach some agreement versus none, the World Health Organization announced on March 28 that its member states agreed to resume negotiations on the pandemic agreement on April 29. A new version of the agreement text—to be further negotiated at that time—is expected by April 18.

Despite launching the process to create the agreement in December 2021, with a target date for adoption at the World Health Assembly in May 2024, negotiations have stalled. As reported by the World Socialist Web Site, efforts intensified two months ago to pressure nations to reach agreement on key points.  The just-approved resumption of negotiations represents the failure of those efforts, as the extension was not previously planned. 

The negotiations are being overseen by the Intergovernmental Negotiating Body (INB). The ninth meeting of the INB (INB9) began on March 18 and ended March 28 without reaching resolution of the remaining issues. Therefore the INB approved a resumption of its ninth meeting, to begin on April 29  and end on May 10. 

Since the World Health Assembly is scheduled to commence on May 27, concluding negotiations successfully by May 10 would essentially be finishing in the final seconds after two-and-a-half years of talks. 

The concern over the inability to reach agreement on schedule was articulated by INB co-chair Roland Driece, who said: 

“Governments said clearly we cannot fail to reach an agreement at the next World Health Assembly to make the world healthier, fairer and safer from pandemics. We are at the finishing line and we are committed to maximizing the remaining negotiations to reach the result the entire world needs.”

The WHO released a “Revised draft of the negotiating text of the WHO Pandemic Agreement” dated March 13, 2024. The prior version was entitled “Proposal for negotiating text of the WHO Pandemic Agreement” and dated October 30, 2023. 

World Health Organization Director-General Dr Tedros Adhanom Ghebreyesus (center) declaring the coronavirus pandemic a Public Health emergency of International Concern in March 2020. [Photo: Fabrice Coffrini]

The changes made from the “Proposal” to the “Revised draft”—which reflect the outcomes of negotiations thus far—are not marked explicitly. A detailed, side-by-side comparison, however, reveals significant changes too numerous to review comprehensively here. 

A summary of some key changes to the binding clauses of the agreement, based on known points of contention among the negotiators, follows.

First, instead of “committing” to improvements in disease surveillance both within and across nations, now parties only “should” do so. 

Second, a clause was struck entirely that required the parties to recognize the impact of “environmental, climatic, social, anthropogenic and economic factors” on the risk of pandemics and commit to taking them into consideration in pandemic preparedness. This is despite the well-known relationship between climate change and a significantly increased risk of pandemics.

Third, a clause committing to follow ethical practices on the international recruitment of healthcare personnel, to avoid draining crucial human resources from resource-poor nations to wealthy nations in the event of a pandemic, was removed. As documented in Nature, such poaching of healthcare workers exacerbated pre-existing workforce shortages in poor nations and consequently further hindered their pandemic response.

Fourth, multiple clauses on international collaboration in the prioritization, direction, and conduct of scientific research for pandemic preparedness were struck. Included in these clauses was one that envisioned a prominent role for the WHO in setting research goals and priorities.

Fifth, a clause was edited that required parties to develop national policies to mandate “provisions in government-funded research and development agreements for the development of pandemic-related products that promote timely and equitable global access to such products during public health emergencies of international concern and pandemics” and to “publish relevant terms of government-funded research and development agreements promoting equitable and timely access to such products during a pandemic emergency.”

Instead, parties now must only publish whatever terms exist in these agreements and in the intellectual-property licensing agreements arising out of the research. Gone is the requirement to include specific clauses in the agreements that promote “timely and equitable global access” to products. These changes are clearly driven by corporations for whom maximizing profit from workers’ intellectual property outweighs protecting the public’s health.

Sixth, instead of being required to “facilitate the transfer of relevant technology, know-how, and licences pooled in relevant mechanisms,” now parties only must “encourage” the global corporations who receive significant public financing to grant royalty-free licenses to other manufacturers in developing countries. And even then, such grants are subject to “any existing licensing restrictions.”

Such “encouragement” has a proven track record of failure. To date during the ongoing COVID-19 pandemic, it resulted in only one highly-restricted waiver approved by the World Trade Organization. The requirements of that waiver posed an insurmountable barrier and thus it proved ineffective. As noted by a report recently issued by the US International Trade Commission, no country made use of it by September 2023. Now, opponents of even that ineffectual waiver cite its designed-for failure as a reason not to extend it, or implement new waivers, in ongoing debates.

Even before INB9 negotiations ended in March, an editorial in The Lancet published March 2 pilloried the agreement, calling it “shameful and unjust.” It said:

The INB might be doing its best, but ultimately it is the politicians of G7 countries who must put aside vested industry interests and finally understand that in a pandemic it is not possible to protect only your own citizens: the health of one depends on the health of all.

A subsequent piece under “Published Correspondence” in The Lancet on March 31, referring to the March 13 “Revised draft”, noted:

“A new phrase has also crept into this draft, subject to national laws, appearing six times. With this provision, parties can opt out of key reporting obligations if they consider the required information to be confidential or private.”

Nevertheless, even this wholesale watering down of the already toothless pandemic agreement is not enough for US-led imperialism. The negotiations starting April 29 will continue to focus on weakening the provisions on intellectual property, the sharing of information and resources, and the requirements for government spending on strengthening healthcare systems and disease surveillance.

The result, as individuals close to the negotiating parties note, will most likely be a bare-bones agreement of “essentials,” with further hashing out of the contentious provisions likely to occur under the first one to two years of meetings of the Conference of Parties created by the agreement. 

The WHO Director-General Dr. Tedros Adhanom Ghebreyesus made emotional appeals to the parties, saying:

“Let the spirit of Geneva—the spirit of cooperation, mutual respect, and shared responsibility—guide your deliberations as you work towards finalizing the agreement by the set deadline in May this year.” 

However, the ruling class has already demonstrated its imperviousness to such appeals by demanding and receiving concessions on behalf of pharmaceutical corporations. Further gutting of the agreement is certain to ensue in the continuation of negotiations later this month and into May.

Future pandemics can be prevented, prepared for, and responded to only on a global, cooperative basis. Pathogens do not respect national borders, and the fractured response to the COVID-19 pandemic under capitalism is responsible for millions of deaths and the failure to end it.

The pandemic agreement is an attempt to increase global coordination towards the levels necessary to prevent, prepare for, and respond to future pandemics. However, capitalism is successfully subordinating the agreement—and by extension the survival of humanity in a future pandemic—to its profit interests, thereby rendering an already insufficient agreement wholly ineffective. 

If an agreement in principle is reached at the resumption of INB9 and subsequently adopted by the World Health Assembly in May, it will be a ghost of its former self and impotent in the face of the growing threat of pandemics induced by imperialist destruction of habitats and acceleration of global climate change.

Boeing whistleblower Sam Salehpour testifies before Congress on safety of the 777 and 787 aircraft

Bryan Dyne

From Left, Boeing Quality Engineer Sam Salehpour; Ed Pierson, Executive Director of The Foundation for Aviation Safety and a Former Boeing Engineer; Joe Jacobsen, Aerospace Engineer and Technical Advisor to the Foundation for Aviation Safety and a former FAA Engineer; and Shawn Pruchnicki, Ph.D, Professional Practice Assistant Professor for Integrated Systems Engineering at The Ohio State University, are sworn in before they testify at a Senate Homeland Security and Governmental Affairs - Subcommittee on Investigations hearing to examine Boeing's broken safety culture on Wednesday, April 17, 2024, in Washington. [AP Photo/Kevin Wolf]

The Senate Homeland Security and Governmental Affairs Subcommittee held a hearing on Wednesday with Boeing quality engineer and whistleblower Sam Salehpour. The topic was ongoing and serious safety and quality issues surrounding the Boeing 777 “Triple Seven” and 787 Dreamliner aircraft.

Salehpour highlighted production issues in connection with 98.7 percent of 787 Dreamliners, where Boeing did not fill tiny gaps, “shims,” between different parts of the fuselage. Repeated pressurization of the aircraft, which occurs on every commercial flight and allows humans to survive inside the plane at altitudes where the air is too thin to breathe, creates weak points that risk the body of the plane simply falling apart mid-flight, killing everyone on board.

Salehpour, who has been an engineer for 40 years, pointed out that while “Boeing’s PR team likes to call [shims] the width of a human hair,” even gaps that small “when you are operating at 35,000 feet … can be a matter of life and death.”

He continued, “In a rush to address bottlenecks in production, Boeing hid problems, pushing pieces together with excessive force to make it appear that the gaps don’t exist.”

This may, he continued, “result in premature fatigue failure. Effectively they are putting out defective airplanes.”

After he raised these concerns internally, Boeing management moved Salehpour to the 777 program. There, he also witnessed numerous safety violations and improper methods of fitting parts together, including “literally jumping on pieces of the airplane to get them to align.”

The subcommittee also heard from several other expert witnesses on the lack of internal quality standards and profit-driven culture within Boeing. The witnesses included Joe Jacobson, a technical adviser to the Foundation for Aviation Safety and former FAA engineer; Ed Pierson, executive director of the Foundation for Aviation Safety and a former Boeing manager; and Shawn Pruchnicki, a professor at Ohio State University and integrated systems engineer.

Jacobson, in particular, is noted for highlighting over many years Boeing’s practice of “trying to maximize profits” at the expense of safety. In his opening statement, he said that in his prior position at the FAA he should have been informed by Boeing about the deadly MCAS system, which was the immediate cause of Boeing 737 Max 8 jetliner crashes in October 2018 and March 2019, which killed a combined total of 346 passengers and crew.

Pierson, another Boeing whistleblower, became well-known in 2019 after he testified that he warned senior company management in the summer of 2018 that “deteriorating factory conditions” at the Renton, Washington Boeing 737 production facility would ultimately create a catastrophic failure, the first of which happened only months later.

To this day, no Boeing executive has been tried for murder or held accountable in any way for these preventable deaths.

The comments from Salehpour and all those who testified highlight both the ongoing dangers of flying on board Boeing aircraft and the fact that, despite all the claims by Boeing to the contrary, there has never been any shift from the aerospace giant’s drive for corporate profits at the expense of human lives.

It is also clear that a critical part of Boeing’s internal culture is direct retaliation against internal complaints. Salehpour testified that “I was told to ‘shut up,’ I was sidelined, I received physical threats.” He continued, “My boss said, ‘I would have killed someone who said what you said in a meeting.’”

Salehpour also presented photos of his car tire, which he said his mechanic told him had a nail jammed into it. While he told the subcommittee he had “no proof” of Boeing’s involvement, he testified the he believed it happened at work.

He was, however, uncowed. He told the committee, “We are the eyes and ears of the public. That’s how I see our job.”

He continued, “After the threats and after all this, it really scares me, but I am at peace. If something happens to me, I am at peace because I feel like by coming forward, I will be saving a lot of lives.”

Salehpour’s testimony raises further questions about the suspicious death of Boeing whistleblower John Barnett. Barnett was slated to give a third day of testimony in a civil suit against Boeing when he was found dead in a hotel parking lot in Charleston, South Carolina on March 9. The suit was brought by Barnett and accused Boeing of forcing him out of the company in 2017 after he raised multiple serious concerns about the safety of the 787 Dreamliner.

While the county coroner declared that the death was a “self-inflicted gunshot wound,” news coverage afterwards revealed that Barnett told a family friend, “If anything happens to me, it’s not suicide.”

More recently, Barnett’s mother Vicky Stokes told CBS News, “I think if this hadn’t gone on so long, I’d still have my son. My sons would still have their brother, and we wouldn’t be sitting here.” She went on to say that she held Boeing responsible for her son’s death.

That none of the senators raised the death of Barnett and the highly suspicious circumstances surrounding it is in line with the near-total blackout by the media of the supposed “suicide” of the whistleblower.

The corporate giant Boeing sits at the heart of American imperialism, both as a major exporter and a supplier of US war materiel, including equipment used by Israel in its genocide against Gaza. There is every reason to believe that the mafia-like actions described by Salehpour are standard practice by Boeing—enabled by the two big business parties, Congress, federal regulators, the corporate media and the courts—to protect its interests and those of US capitalism as a whole.

New Zealand unions collaborate with thousands of job cuts

John Braddock

With New Zealand officially in recession, a swathe of mass sackings is currently sending shockwaves through the entire working class.

So far, more than 3,000 public service jobs have been axed in recent weeks as the National Party-led coalition government—which includes the far-right ACT Party and NZ First—carries out a scorched earth policy, targeting budget cuts of 6.5 or 7.5 percent across most ministries.

New Zealand parliament buildings [Photo by Midnighttonight via Wikimedia Commons / CC BY-SA 3.0]

On April 17, the Ministry of Education (MoE) announced that 565 positions will be scrapped, including nearly 100 regional and frontline roles directly supporting schools. This includes a reduction of 38 roles supporting students with disabilities and learning support needs. It is the biggest single cut to a public service agency so far.

The same day, Oranga Tamariki, the Ministry for Children, confirmed 447 jobs will be cut, 9 percent of its workforce. The agency provides social welfare interventions for some of the country’s most deprived and vulnerable young people.

One Oranga Tamariki staff member described the cuts as “gut-wrenching.” She told Radio NZ: “It’s just purely numbers, which is such a terrible way to look at it because I work alongside some of the most dedicated, hard-working, passionate people I’ve ever met. And seeing the impact that will have on some of them is horrific.”

Other cuts include 445 jobs at the Department of Internal Affairs, 384 at the Ministry of Primary Industries, 50 at Treasury, 134 at the Ministry of Health, 90 at the National Institute of Water and Atmospheric Research (NIWA), 130 at the Department of Conservation, and 286 at the Ministry of Business Innovation and Employment. Dozens of smaller job cuts have been announced in other departments.

The ferocious attack is a deliberate class-war policy. Following the October 2023 election, which saw the incumbent Labour-led government’s vote collapse amid widespread anger over increasing poverty, homelessness and soaring living costs, the National Party-led government was installed to carry forward the next stage of austerity measures.

The government’s attacks include: A real cut to the minimum wage (which has gone up just 2 percent while inflation is twice that); moves to slash welfare benefits; changes making it easier to evict tenants; and plans to reintroduce for-profit charter schools and for private companies to play a bigger role in the healthcare system.

The sweeping austerity program underpins a massive transfer of wealth to the rich with $NZ9 billion in income tax cuts favouring top income earners. The cutbacks will also help to fund an expansion of the police, the prison system, and a major increase in military spending as New Zealand is integrated into US imperialist plans for war against Russia, China and Iran.

There is widespread opposition to the government’s agenda. The coalition was scrabbled together in secret negotiations after National received just 38 percent of the vote, while ACT and NZ First took a paltry 8.6 and 6.1 percent respectively. Any support they had is now plummeting. A recent Curia poll saw a slump for all of them with ACT faring the worst, dropping to 7.2 percent.

Many respondents to a recent Talbot Mills poll variously described Prime Minister Christopher Luxon as “greedy,” “arrogant” and “entitled.”

Another poll of 1,001 people conducted by Ipsos has found that 58 percent believe “society is broken,” and 65 percent agree with the statement: “The economy is rigged to advantage the rich and powerful.”

The assault on jobs is not confined to the public sector. International media conglomerate Warner Bros. Discovery confirmed on April 10 it will shut down Newshub, one of the country’s two major media networks. Nearly 300 journalists, technical personnel and presenters will lose their jobs.

State broadcaster TVNZ has also confirmed that several of its shows and news bulletins will shut down, with the loss of 68 jobs. Meanwhile, NZ Post is proceeding with a plan announced last year to cut 750 jobs and replace mail delivery staff with independent contractors.

The construction sector is in a sharp downturn. Recently, Tony Boyce Builders in Timaru, which once employed 51 people, announced it will shut down, and the boat-building company Subicraft is laying off nearly 60 people. The recent collapse of Buildhub left hundreds of migrant workers destitute.

In the face of all this, the corporatist trade unions have made clear that nothing will be done to defend a single job. Far from mobilising an industrial and political campaign across the working class, they have signaled that they will enforce the cuts, including by corralling workers behind whatever paltry exit provisions may be on offer as they are ushered out the doors.

While the government predicts that as many as 7,500 public sector jobs could go, the Public Service Association (PSA), the county’s largest union with over 90,000 members, has restricted itself to releasing a few toothless media statements bemoaning the “reckless nature” of the cost cutting.

Responding to the MoE announcement, the union’s Assistant Secretary Fleur Fitzsimons simply bemoaned that the government had promised job cuts would not impact frontline services. She described the cuts as “woefully short-sighted,” asking plaintively: “At a time when student achievement is falling, when school attendance is a challenge, where is the plan for education? It doesn’t add up.”

In fact, prior to the 2023 election the union openly supported Labour’s own plan to slash public service budgets by up to 4 percent as “a prudent move to tighten the belt”—as PSA leader Duane Leo put it in a Radio NZ interview last August. Fitzsimons was a Labour candidate in that election.

A particularly rotten feature of the PSA’s postings is the underhanded use of identity politics to pit one section of sacked workers against the other. One post highlights, for instance, that women are “bearing the brunt” of cuts at the Tertiary Education Commission while the PSA’s Māori arm declared that “cultural expertise” will be lost. In fact, the cuts impact on workers regardless of gender, ethnicity, national origin, skills or education.

The E tū union, with nearly 50,000 members across a range of private and public sector industries, has kept media workers isolated while assisting management at Newshub and TVNZ to throw them on the scrap heap.

E tū negotiator Michael Wood, a cabinet minister in the former Labour government, appealed to TVNZ “to work with staff,” i.e., consult with the union bureaucracy, rather than “dictate and predetermine the outcome.” He told Radio NZ that the union accepted that TVNZ was in financial difficulty, which had to be addressed, but merely disagreed with axing programs that were still profitable.

The privileged bureaucrats that run these organisations have known since well before the October election that the assault was looming. If the PSA and E tū were real workers’ organisations, they could have mobilised their tens of thousands of members to freeze government operations. A nationwide strike, bringing in broad sections of the working class, would gain immense sympathy and raise the perspective of bringing down the far-right government.

Such a course of action is anathema to the unions, whose very existence is bound up with protecting and defending the status quo. The bureaucracy insists that any broad industrial action is impossible because it is against the law. But the severe anti-worker provisions in the Employment Relations Act, which restrict strikes to periods of contract renewals, were put in place by the Labour government in 2000, with the full support of the Council of Trade Unions.

UK Tories hound tens of thousands of unpaid carers for benefit repayments

Thomas Scripps

Revelations that the UK’s Department for Work and Pensions (DWP) is pursuing tens of thousands of unpaid carers for thousands of pounds in benefits repayments shines a light on British capitalism’s dirty secret of informal care work.

Unpaid carers who provide at least 35 hours of care a week, usually to disabled, ill or elderly relatives, are eligible for government payments of £81.90 a week as long as they do not earn more than £151 in those seven days from paid employment.

This second condition is the cause of the scandal. If a carer earns just £1 more than the limit, they forfeit the entire £81.90 carer’s allowance that week. Just 26 weeks earning £1 over the limit would therefore mean owing the government £2,182 in benefit repayments. The DWP system frequently fails to warn carers that they are incurring these debts.

Honest mistakes and miscalculations have left some of the poorest people in the country owing huge sums of money. In 2022/3, according to the Guardian, “26,700 carers were asked to repay sums relating to earnings breaches. More than 800 were repaying sums between £5,000 and £20,000, and 36 were repaying more than £20,000”.

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A vindictive campaign is being pursued to claw back a miniscule fraction of the welfare budget. To provide perspective, £9 billion was written off by the government after being spent on unusable personal protective equipment during the pandemic, over £1 billion of which it admits was “at risk” of corporate fraud. More telling still, £35 billion in tax is estimated to be lost to non-payment, avoidance and fraud.

The punishment being meted out is a particularly savage expression of capitalism’s plundering of the energies of society and hatred of sections of the population considered surplus to requirements. It takes place even though the ruling class is already reaping massive rewards by exploiting relatives placed under enormous personal strain by the deliberate collapsing of alternative provision.

According to a 2023 study, the economic value of work done by unpaid carers is a staggering £162 billion a year, close to the £181 billion budget of the National Health Service (NHS). An estimated 7 million people in the UK provide unpaid care—more than one in 10 people and including one in seven employees. Roughly one in 20 are providing more than 20 hours of care a week.

This is labour vital to the functioning of society, upon which all the profits, dividends and exorbitant salaries of the capitalist economy ultimately depend, but for which it pays next to nothing. And it helps facilitate the ongoing gutting of the NHS.

Carers also holding up a job are expected to put in a second shift at home. Those not able to take up paid employment alongside their caring responsibilities are given a pittance, if they are among the fewer than one million grudgingly given any support at all. According to a survey by the Carer’s Trust, barely half (55 percent) of unpaid carers feel they get the support they need to fulfil their role, falling to a third in the most economically deprived groups.

The financial and mental strain is enormous. Nearly half of those providing more than 35 hours of care a week are in poverty. Two-thirds describe themselves as extremely worried about finances, with a quarter actively cutting back on essentials like food and heating.

This has a marked impact on the caregiver’s mental health. Over a quarter often or always feel lonely. Burnout, according to the Association of Directors of Adult Social Services, is the main reason unpaid care arrangements break down, with less than a third of carers telling the Carer’s Trust they can take a break when they need one.

Akshata Murty, multi-hundred millionaire wife of Prime Minister Rishi Sunak, holds a reception in Downing Street for young carers, April 20, 2023. [Photo by Simon Walker / No 10 Downing Street / CC BY-NC-ND 2.0]

Young carers are particularly severely affected. The average waiting time to be identified for support is three years, with some carers waiting 10 years, according to an inquiry by the All-Party Parliamentary Group on Young and Young Adult Carers. Young carers have a higher prevalence of self-harm than their peers, and those who do self-harm are twice as likely to attempt to take their own life.

By 2020, government spending per person on adult social care in the UK was lower in real terms than it had been a decade prior. Meanwhile, between 2015/16 and 2022/23, the average weekly care home fee for working-age adults has increased by 10 percent, the average weekly fee paid for older people has increased by 26 percent, and the average hourly rate for home care has increased by 17 percent—all according to the King’s Fund health and social care charity.

Local authorities are heavily exposed to these costs, with 78.5 percent of their adult social care spending going to outsourced, overwhelmingly private, provision—up from 74 percent in 2015/16. More than eight in 10 care home places in England are now provided by private operators.

These private companies run gross profit margins ranging up to 42 percent, paying their staff abysmally—the vacancy rate in the adult social care sector is over ten percent—and frequently providing substandard care. According to a study published in Lancet Health Longevity last month, of the 816 care home closures enforced by the Care Quality Commission regulator since 2011, 804 were for-profit operators.

According to the King’s Fund, the net result is that while requests for care have increased, the number of people actually receiving formal long-term care is falling—down 55,000 in 2021/22 compared to 2015/16. Over two-and-a-half million people in England aged over 50 are unable to get the care they need, with hundreds of thousands stuck on waiting lists.

These numbers are set to explode. The number of people aged 65-79 in the UK is expected to increase by nearly a third in the next 40 years, and the number aged over 80 to double. A larger proportion than now will be living alone and/or ageing without children. Meanwhile, the working-age population will grow by just 4 percent.

As a result of this ageing and of the woeful state of public health, the number of people living with a major illness is expected to increase from one in six adults in England to one in five by 2040.

The murderous policies pursued in the pandemic demonstrated the ruling class’s attitude to these sections of the population, as far as their age and illness prevents them from producing profits. The super-rich consider it an insult that 600 potential labourers leave employment every day to take on caring responsibilities of those who make no contribution to the oligarchy’s vast wealth. No additional funding is coming their way.

Local authorities picking up the tab are already in unprecedented financial crisis and will be driven deeper into bankruptcy by central government spending plans that will mean a 13 percent funding cut in the years to 2028/9. National adult social care spending fell again in real terms between 2021/22 and 2022/3.

The opposition Labour Party has said nothing about making changes to Carer’s Allowance, only promising a “review”. Leader Sir Keir Starmer mildly opined with regard to carers being pursued for crippling debts that “Something’s gone very wrong here”. As Director of Public Prosecutions, he pushed a “tough stance” on those attempting to “flout” the benefits system, with jail terms of up to 10 years and a minimum threshold of £20,000 for sending cases to Crown Court abolished.