Global markets continue to fall

Nick Beams

Global stock markets have experienced their worst opening week in a new year in two decades as concerns over the Chinese economy, the value of the renminbi and the policies of Chinese financial authorities sent out a series of shock waves. More than $2.3 trillion was wiped off the value of global stocks for the week.

Markets in the US had their worst opening week ever. Shares closed down about 1 percent on Friday, after falls in Japan and Europe, with the German Dax index posting its biggest loss since 2011.

The Dow lost 6.19 percent in value for the week, and the S&P 500 was down by almost 6 percent, with falls across all ten sectors of the index. The high-tech-based Nasdaq composite index fell by more than 7 percent.

The continued decline came despite a stronger-than-expected jobs report in the US, which indicated that an additional 292,000 jobs were created last month. There was also an upturn in the Chinese market, after trading was suspended for two days last week when falls in share prices exceeded 7 percent, triggering circuit-breaker mechanisms.

Following criticisms that these mechanisms were contributing to, rather than alleviating, market instability, financial authorities lifted them on Friday, leading to the uptick in share prices. In another move aimed at stabilising the value of the Chinese currency, the renminbi, the foreign exchange regulator issued guidelines to banks limiting the purchase of US dollars by corporations and individuals.

The renminbi was down 0.8 percent for the week, its biggest decline since the People’s Bank of China made a surprise move last August to reduce its value. In a sign of the extent of capital outflow, China’s foreign currency reserves fell by $108 billion in December.

Summing up the events of the week, the Financial Times commented that if any lesson was to be learned from the past six months it was that any bump in the Chinese economy could not be ignored by the rest of the world. “The question is whether the rest of the world feels a gentle ripple or a tidal wave.”

The article noted that the fall in China’s growth rate from more than 10 percent in 2010 to the estimate of just 6.3 percent for this year could be expected, on the basis of China’s weight in global gross domestic product, to reduce world growth by about 0.75 percentage points.

According to International Monetary Fund chief economist Maurice Obstfeld, however, the effects are much greater than is indicated by a direct consideration the 18 percent of the global economy that China comprises. “The global spillovers from China’s reduced rate of growth … have been much larger than we would have anticipated,” he said.

This is because China is at the head of a series of integrated supply chains that involve the countries of South East Asia, Japan and Korea.

An indication of the impact of falling growth is seen in the decline in Chinese imports. They fell by 15 percent in the first 11 months of last year, with purchases from all its major trading partners, except Vietnam and Canada, in decline.

Furthermore, there are increasing concerns that the real level of Chinese growth is considerably less than official figures, with some estimates putting it closer to 4 percent.

An article in the Wall Street Journal on Friday pointed to the gloom that has descended in one of China’s most important industrial areas.

“Executives at businesses in the manufacturing heartland of south-eastern and eastern China, which churn out everything from electronic gadgets from textiles to furniture, talk of slack orders and late payments,” it reported. “China’s traditional heavy industrial engines of steel, cement and glass remain saddled with excess capacity built up in the boom years.” According to one executive cited in the article “no numbers point to a rosy picture.”

While there is no question that slowing Chinese growth rates, fears of a fall in the renminbi, doubts over reliability of government statistics and the destabilising effects of the seemingly ad hoc decisions of Chinese authorities are having their impact, more is involved than simply the state of the Chinese economy.

Financial Times columnist John Authers noted that “Chinese markets are shaking the world,” but, as in the past, “this says more about the frayed nerves in the rest of the world than it does about China.”

Authers pointed to the “greatest fear prevailing in the west: deflation” which impacts on the ability of companies to maintain, let alone increase, their profits. With central banks desperately trying to escape this situation “anything that threatens to intensify the problem is very serious.”

According to Authers, the “stark reaction to this week’s Chinese events reveals a deep lack of confidence in the health of the western corporate sector.”

He drew a parallel with events in February 2007, when a 9 percent fall in the Shanghai index triggered a major fall on Wall Street which, amid growing concerns about the state of the subprime mortgage market, signified the end of the “Great Moderation” when market volatility had remained relatively low.

Multi-billionaire investor George Soros also drew comparisons between the present situation and the events that led to the global financial crisis. In a speech delivered in Sri Lanka this week, he said there was a “serious challenge which reminds me of the crisis we had in 2008.”

It is not clear where the present course of events will lead. However, the rise in corporate debt in the US, where the trillions of dollar pumped into the financial system by the Federal Reserve have been used to finance a speculative bubble in stocks, as well as in emerging markets, where corporate debt has increased rapidly over the past four years, have created the conditions for another major financial crisis.

US, China tensions sharpen after North Korean nuclear test

Peter Symonds

In the wake of North Korea’s nuclear test this week, China yesterday rejected comments by US Secretary of State John Kerry suggesting that Beijing had failed to rein in its ally, Pyongyang, and should take tougher measures to force North Korea to give up its nuclear weapons.

After speaking to his Chinese counterpart Wang Yi on Thursday, Kerry told the media that China’s “particular approach” to North Korea had “not worked” and warned that “we cannot continue business as usual.” The United States and South Korea are reportedly holding top-level discussions on stationing “strategic weapons”—that is, nuclear bombs and associated delivery systems—on the Korean Peninsula.

Chinese foreign ministry spokeswoman Hua Chunying responded, saying: “China is not the cause and crux of the Korean nuclear issue, nor is it the key to resolving the problem.” She declared “all other parties should keep a cool head, stay on the path toward a peaceful solution, and avoid taking actions that sharpen disputes and raise tensions.”

Hua reiterated China’s call for the denuclearisation of the Korean Peninsula and a return to stalled six-party talks involving the two Koreas, the US, China, Japan and Russia. An international agreement on North Korea’s nuclear programs broke down in 2008 after the Bush administration unilaterally and provocatively demanded a tougher inspection regime. Obama has stymied any resumption of talks by insisting that North Korea accede to US demands in advance.

Hua’s reference to denuclearisation is implicitly directed against the US stationing nuclear weapons in South Korea. Following North Korea’s previous nuclear test in 2013, the Pentagon flew nuclear capable B-2 and B-52 bombers to South Korea during joint military exercises. Standard US military protocol neither confirms nor denies that warships and strategic bombers are carrying nuclear weapons.

A commentary in China’s hawkish, state-run Global Times cited academic Lu Chao, who warned that “the US was overreacting as military deployment would only aggravate tensions in the region and the situation may spiral out of control.” He nevertheless declared that the deployment of military assets was “possible as the US will not dismiss the chance to expand its military presence in the Asia-Pacific region, neither will its ally Japan.”

The US threat to base nuclear weapons on the Korean Peninsula is not aimed primarily at North Korea and its rudimentary nuclear arsenal. Rather Washington is engaged in a military build-up throughout the Indo-Pacific region as part of its “pivot to Asia” directed against China and seeking to ensure continued American hegemony. The stationing of nuclear capable bombers and ships in South Korea, directly adjacent to the Chinese mainland, would represent a major escalation and fuel tensions with Beijing.

China is caught in a bind. It has been pressuring its ally North Korea to wind back its nuclear programs, including by agreeing to new UN sanctions in 2013. At the same time, drastic economic sanctions could precipitate the collapse of the unstable regime in Pyongyang and open up the possibility of a US-aligned state on China’s northern borders. North Korea depends heavily on trade with China, as well as Chinese aid.

The threatened US military build-up in South Korea underscores the reckless and reactionary character of North Korea’s decision to detonate another nuclear weapon. The Stalinist leadership’s response to the deepening social and economic crisis at home is to ramp up its nationalist and militaristic rhetoric, which serves only to divide workers in North Korea from those in South Korea, Japan and internationally.

Pyongyang’s prime motivation is to exploit its nuclear arsenal as a bargaining chip in refashioning relations with imperialism. No peace treaty was ever reached with the US or South Korea in 1953 to end the Korean War and since then the country has been subject to an economic blockade by the US and its allies.

The North Korean regime is desperate to open up the country as a cheap labour platform for foreign investors and is expanding its network of free trade zones throughout the country. However, without an end to the decades-long confrontation with the US and North Korea’s integration into the global capitalist market, foreign investment in the country has remained a tiny trickle.

Reuters reported yesterday that North Korea had sent a message to China declaring that it was seeking a peace treaty with the US, China and South Korea, and warning that it would not stop its nuclear testing until it had one. “North Korea will do it to the end until China and the United States want to sign a peace treaty,” a high-level North Korean source told the news agency.

The source said he had relayed the message to Beijing immediately after the nuclear test, urging China to support the push for a treaty. China had not been informed of the test in advance. Referring to the US demand that North Korea give up its nuclear programs prior to any negotiations, he urged Beijing “not to follow the United States.”

Washington has a long history of reaching deals with the North Korea over its nuclear programs and not keeping its promises. Under the 1994 Agreed Framework reached with the Clinton administration, North Korea froze its nuclear activity and shut down its only reactor at Yongbyon in exchange for supplies of fuel oil and the construction of two light water reactors (LWR). By the time Clinton’s term ended in 2000, virtually no progress had been made on the LWRs.

On taking office, President George Bush ordered a lengthy review of US policy toward North Korea, effectively sabotaged the Agreed Framework and ratcheted up the confrontation with Pyongyang. In 2002, he branded North Korea as part of an “axis of evil,” along with Iran and Iraq. Bush only agreed to China’s proposal for six-party talks under conditions where the US occupation forces in Iraq were hard-pressed, then scuttled the resulting agreement in 2008.

US imperialism has repeatedly used North Korea as a convenient pretext to justify its large military presence in North East Asia and to put pressure on China. President Obama, who has deliberately inflamed flashpoints throughout the Asia-Pacific as part of his “pivot to Asia,” is not about to make any concessions over North Korea and will undoubtedly exploit its nuclear test to accelerate Washington’s war drive against China.

Obama seeks Silicon Valley aid to spy on social media

Thomas Gaist

White House officials met with Silicon Valley executives Friday to discuss the US government’s expanding efforts to monitor and intervene in online social media and other forms of internet communication.

The meeting, held in San Jose, California, featured high-level figures from Silicon Valley, including Apple CEO Tim Cook, and a government delegation led by White House Chief of Staff Denis McDonough, Attorney General Loretta Lynch, Director of National Intelligence James Clapper, NSA Director Michael Rogers and FBI Director James Comey.

According to an official statement issued by the White House, the purpose of the meetings was to “work together to combat terrorism and counter violent extremism online.”

During the tech summit, the White House delegation circulated proposals calling for tech firms to develop tools to “measure radicalization” levels among different populations, and to enable more effective dissemination of government-produced anti-terrorist media, documents acquired and published by The Intercept on Friday show.

Also on Friday, with the closed-door discussions still in progress, the White House announced new programs against “violent extremism” in the United States, including the establishment of a new Countering Violent Extremism task force, to be formed jointly by the Department of Homeland Security and the Department of Justice.

The new CVE task force, based out of DHS facilities, will seek to “integrate and harmonize” the operations of “dozens of federal and local agencies,” according to unnamed US officials cited by the Washington Post. The newly formed DHS-led task force will “coordinate all of the government’s domestic counter-radicalization efforts,” according to the US officials who spoke to the Post.

The State Department will also create a new Global Engagement Center to coordinate US government social media work internationally, a White House statement said.

Friday’s high-profile Silicon Valley summit and the announcement of the new counterterror programs have confirmed that the Obama administration will make use of its final year in power to further entrench and expand the surveillance apparatus.

The Obama administration aims to spend 2016 “overhauling its propaganda war against the Islamic State,” the Washington Post reported Thursday, in an article based on leaks from unnamed, high-level US government sources.

New spy programs launched by the administration will seek to collect and analyze data from social media networks and develop covert operations that allow the government to use the networks for its own counter-radicalization schemes, the US officials said.

The Obama White House has already overseen the development of a raft of police-state measures in the name of fighting “violent extremism,” hosting two major international conferences last year as part of efforts to coordinate surveillance projects among the various imperialist powers.

As early as 2012, the US government began seeking private contractors to conduct surveillance and analysis of social media data on behalf of the agency, through which the bureau could “develop pattern of life matrices” to enable law enforcement agencies to automatically identify likely “radicals.”

Recent months have seen growing clamor by the American state against encryption technology, as FBI Director James Comey has staged numerous public appearances to demand that the US government be given unlimited “back door” access to all encryption systems used by US communications firms.

The US political and media establishments have sought to justify this agenda by lamenting the limitations of previous social media surveillance efforts, endlessly repeating claims—without any factual basis—that the attacks in San Bernardino and elsewhere could have been stopped through preemptive screening of social media profiles for signs of extremism.

A growing stream of reports from elite universities and US government agencies warn—again without any evidence—that the Internet is enabling mass conversions of US residents into violent terrorists. Media reports this week highlighted one recent contribution, ludicrously titled “ISIS in America: From Retweets to Raqqa,” published in December 2015 by George Washington University’s “Program on Extremism.”

In the period since the exposure by NSA contractor Edward Snowden of massive US government spying on the Internet, many Silicon Valley firms have sought to pose as defenders of privacy against government overreach, although they have cooperated extensively with the government’s surveillance operations for years.

The communications firms are mainly concerned to protect the illusion of independence from the government, rather than to actually protect the privacy of their users, as comments by an unnamed Silicon Valley official reported by the Washington Post on Friday made clear. “Being seen as having the US government force our hands makes others around the world lose confidence in us,” an unnamed Silicon Valley official told the newspaper.

Friday’s meeting, with its lineup of virtually every top US official overseeing counterterrorism and surveillance, demonstrates that the US ruling elite is seeking nothing less than to subject the entire world communications system to unlimited scrutiny by US security and intelligence agencies.

Whether or not the leading tech companies will sign on to the specific initiatives being put forward by the White House Friday remains unclear. Nonetheless, as revelations from Snowden have conclusively shown, all the major communications providers have collaborated to varying degrees with the illegal mass spying operations erected by the US government since 9/11.

The events of the past decade-and-a-half have made clear that the entire corporate and political establishment favors an agenda of police-state spying on the American population.

In the immediate aftermath of 9/11, AT&T allowed the CIA and NSA continuous direct access to the company’s servers via special rooms installed inside the corporation’s headquarters.

The NSA has enjoyed virtually unfettered access to the servers of major Internet and telephone providers for years as part of secret deals negotiated in connection with the agency’s PRISM program. Since 2007, the US government has successfully recruited Microsoft, Google, Facebook, YouTube, AOL, Skype and Apple as participants in PRISM, giving the NSA complete access to all live communications hosted on the corporate servers, including email, video and voice calls, chats and file exchanges, along with unlimited access to their data archives.

Terrified by the Snowden exposures, the US government has increasingly turned these methods on its own employees, who are now among the most heavily surveilled groups on the planet. As part of the Pentagon-led “Insider Threat Program,” at least 100,000 US government employees have been targeted by highly intrusive electronic surveillance, a 2015 Congressional report secured in December by a Freedom of Information Act request revealed.

The lottery and social despair in America

Andre Damon

This mania, so generally condemned, has never been properly studied. No one has realized that it is the opium of the poor. Did not the lottery, the mightiest fairy in the world, work up magical hopes? The roll of the roulette wheel that made the gamblers glimpse masses of gold and delights did not last longer than a lightning flash; whereas the lottery spread the magnificent blaze of lightning over five whole days. Where is the social force today that, for forty sous, can make you happy for five days and bestow on you—at least in fancy—all the delights that civilization holds?

Balzac, La Rabouilleuse, 1842

The jackpot in the US Powerball lottery has hit $800 million, since there were no winners in Wednesday’s drawing. In the current round, which began on December 2, over 431 million tickets have been sold, a figure substantially larger than America’s population.

Go into any corner store in America and you will see workers of every age and race waiting in line to buy lottery tickets. With the current round, the lines are longer than ever. Americans spend over $70 billion on lottery tickets each year. In West Virginia, America’s second-poorest state, the average person spent $658.46 on lottery tickets last year.

Powerball players pick six random numbers when they purchase their tickets, with a certain percentage of sales going to the jackpot. If no winning ticket is sold, the jackpot rolls over to the next round.

The totals for the Mega Millions and Powerball national lotteries have been growing every year. This year’s jackpot has eclipsed 2012’s record of $656.5 million, the $390 million payout in 2007 and the $363 million prize in 2000. The jackpots have grown in direct proportion to ticket sales.

State-run gambling programs such as Powerball have been promoted by Democrats and Republicans alike as a solution to state budget shortfalls, even as the politicians slash taxes on corporations and wealthy individuals and gut social programs. From the standpoint of government revenue, lotteries and casinos are nothing more than a back-door regressive tax, soaking up money from the poor in proportion to the growth of social misery.

The boom in lotteries is global. Lottery sales grew 9.9 percent worldwide in 2014, after growing 4.9 percent in 2013.

Psychology Professor Kate Sweeny has noted that lottery sales grow when people feel a lack of control over their lives, particularly over their economic condition. “That feeling of self-control is very important to psychological well-being,” Sweeny says.

There is ample reason for American workers to feel they have no control over their lives. According a recent survey by Bankrate.com, more than half of Americans do not have enough cash to cover an unexpected expense of $500 or more—roughly the price of four name-brand tires.

Some 62 percent of Americans have savings of less than $1,000, and 21 percent do not have any savings at all. Most Americans are one medical emergency or one spell of unemployment from financial ruin.

For all the talk about “economic recovery” by the White House, the real financial state of most American households is far worse than before the 2008 financial crisis and recession. As of 2013, Americans were almost 40 percent poorer than they were in 2007, according to a recent survey by the Pew Research Center. While a large portion of the decline in household wealth is attributable to the collapse of the housing bubble, falling wages and chronic mass unemployment have played major roles.

The yearly income of a typical US household dropped by a massive 12 percent, or $6,400, in the six years between 2007 and 2013, according to the Federal Reserve’s latest survey of consumer finances. A large share of this decline has taken place during the so-called recovery presided over by the Obama administration.

In addition to becoming poorer, America has become much more economically polarized. According to a separate Pew survey, for the first time in more than four decades “middle-income households” no longer constitute the majority of American society. Instead, the majority of households are either low- or high-income. Pew called its findings “a demographic shift that could signal a tipping point” in American society.

“Is the lottery the new American dream?” asked USA Today, commenting on this month’s Powerball jackpot. The observation is truer than the authors intended. For American workers, achieving the “American Dream” of a stable job and one’s own home is becoming increasingly unrealizable.

Following more than 10 million foreclosures during the financial crisis, America’s home ownership rate has hit the lowest level in two decades, and for young households, the rate of home ownership is the lowest it has been since the 1960s.

For the tens of millions of America’s poor, and the more than 100 million on the threshold of poverty, the dream of winning the lottery has replaced the “American Dream” of living a decent life. A lottery ticket is a chance to escape to a fantasy world where money is not a constant, nagging worry, where one is not insulted and bullied at a low-wage job by bosses whose pay is matched only by their incompetence. The lottery is, as Balzac aptly described it, the “opium of the poor.”

Using the same phrase to describe religion, Marx noted that the “illusory happiness of the people” provided by the solace of religion is, in fact, a silent protest and distorted “demand for their real happiness.” It is the intolerable social conditions that compel masses of people to seek consolation in a lottery ticket that will propel them into revolutionary struggles.

Endless Racism In The Iranian Model Of The Nation-State

Ali Badri

The world has lived under the shadow of discrimination for a long time before the liberation movements appeared to realize the demands of equality for the oppressed peoples. What happened during the racist massacres remains a disgraceful stain on the face of humanitarianism. Many of nations have freed themselves from this ghost, but still some of them are living under racist murderers.

The most prominent nations that face racism in all aspects of their lives are non-Persian people in the political geography of Iran. The Islamic Republic is one of the countries that is seeking to impose its own version of nation-state on all the ethnic groups that live within its borders by force. A nation-state is a state whose primary loyalty is to a cultural self-identity, which we call a nation or nationality, and is now the predominant form of state organization. (The Nation State by Anthony C. Pick).

On this basis, Iran established the political system based on the exclusion of other peoples for sake of the people of Fars background after Reza shah took power in Iran with support of England. Reza Shah took over the non-Persian people's states and the founded a nation-state based on the idea of the so-called Aryan race in Iran.

The racism and oppression in Iran must be viewed through the lens of the nation-state and ideas of its theoreticians and founders, and also must be evaluated by looking at how the new Iranian state had been established. The modern state was founded in Iran on the basis of theories by senior Aryan racists ideologues including like Kermani and Kasravi, and all the constants were on the basis of the melting of the other ethnic groups into one “Persian” nation.

Five large ethnic groups live in Iran under the discriminatory policy and denial of all their basic rights of the Persian state, which uses occupation to suppress their rights and voices. Arab (Ahwaz territory), Kurds (Kurdistan territory), Baluch (Baluchistan territory), Turks (Azerbaijan territory), Turkmen (Turkmen Sahra territory) are living under the conditions mentioned above. This article could not cover f all the rights which are restricted or taken away from these peoples. From the right of choosing ethnic names for their children to the right of learning in the mother tongue, Iran did not only deprive these peoples of their rights but also has taken steps to make the populations Fars-centric. The most important racist steps which are taken by Iran to change the demographic ratio in non-Persian regions are as follows:

1. Building settlements in the depth of the non-Persian regions to resettle migrants from the rest of the peoples.
2. Preventing indigenous population from employment in order to force them to emigrate into Persian areas.
3. Sabotaging environment.
4. Drying rivers.
5. Depriving peoples from practice of their religious and nationalist rights.
6. Arrests and executions of political and social activists in the non-Persian areas.
7. Spreading and facilitatingdrug abuse in the non-Persian areas.

The goal of each of these acts is the melting of non-Persian peoples into Aryan/Fars culture in order to build a single Persian nation-state. The worst of the racist attempts are taking place in Iran with the silent acquiescence of the rest of the world. Iran is teaching its children hatred and malice towards non-Persians people and we can see this racism in school curricula and books and government media. Eradication of racism in Iran cannot be done by demands or even statements of condemnation or even changing the government but by drying of roots of the current model of nation-state in Iran.

Pharming

John Avery

A major global public health crisis may soon be produced by the wholesale use of antibiotics in the food of healthy farm animals. The resistance factors produced by shoveling antibiotics into animal food produces resistance factors (plasmids) which can easily be transferred to human pathogens. A related problem is the excessive use of pesticides and artificial fossil-fuel-derived fertilizers in agriculture. Pharming is not a joke. It is a serious threat.

http://ecowatch.com/2014/03/06/misuse-antibiotics-fatal-superbug-crisis/

http://ecowatch.com/2013/12/06/8-scary-facts-about-antibiotic-resistance/

http://ecowatch.com/2015/03/27/obama-fight-superbug-crisis/

http://ecowatch.com/2014/03/12/fda-regulation-antibiotics-factory-farms/

http://www.bbc.com/news/health-35153795

http://www.bbc.com/news/health-21702647

http://www.bbc.com/news/health-34857015

http://sustainableagriculture.net/about-us/

https://pwccc.wordpress.com/programa/

Plasmids

Bacteria belong to a class of organisms (prokaryotes) whose cells do not have a nucleus. Instead, the DNA of the bacterial chromosome is arranged in a large loop. In the early 1950's, Joshua Lederberg had discovered that bacteria can exchange genetic information. He found that a frequently-exchanged gene, the F-factor (which conferred fertility), was not linked to other bacterial genes; and he deduced that the DNA of the F-factor was not physically a part of the main bacterial chromosome. In 1952, Lederberg coined the word ``plasmid" to denote any extrachromosomal genetic system.

In 1959, it was discovered in Japan that genes for resistance to antibiotics can be exchanged between bacteria; and the name “R-factors”was given to these genes. Like the F-factors, the R-factors did not seem to be part of the main loop of bacterial DNA.

Because of the medical implications of this discovery, much attention was focused on the R-factors. It was found that they were plasmids, small loops of DNA existing inside the bacterial cell, but not attached to the bacterial chromosome. Further study showed that, in general, between one percent and three percent of bacterial genetic information is carried by plasmids, which can be exchanged freely even between different species of bacteria.

In the words of the microbiologist, Richard Novick, “Appreciation of the role of plasmids has produced a rather dramatic shift in biologists' thinking about genetics. The traditional view was that the genetic makeup of a species was about the same from one cell to another, and was constant over long periods of time. Now a significant proportion of genetic traits are known to be variable (present in some individual cells or strains, absent in others), labile (subject to frequent loss or gain) and mobile, all because those traits are associated with plasmids or other atypical genetic systems.”

Pesticides, artificial fertilizers and topsoil

A very serious problem with Green Revolution plant varieties is that they require heavy inputs of pesticides, fertilizers and irrigation. Because of this, the use of high-yield varieties contributes to social inequality, since only rich farmers can afford the necessary inputs. Monocultures, such as the Green Revolution varieties may also prove to be vulnerable to future plant diseases, such as the epidemic that caused the Irish Potato Famine in 1845. Even more importantly, pesticides, fertilizers and irrigation all depend on then use of fossil fuels. One must ask, therefore, whether high-yield agriculture can be maintained in the post-fossil-fuel era.

Topsoil is degraded by excessive use of pesticides and artificial fertilizers. Natural topsoil is rich in organic material, which contains sequestered carbon that would otherwise be present in our atmosphere in the form of greenhouse gases. In addition, natural topsoil contains an extraordinarily rich diversity of bacteria and worms that act to convert agricultural wastes from one year's harvest into nutrients for the growth of next year's crop. Pesticides kill these vital organisms, and make the use of artificial fertilizers necessary.

Finally, many small individual farmers, whose methods are sustainable, are being eliminated by secret land-grabs or put out of business because they cannot compete with unsustainable high-yield agriculture. Traditional agriculture contains a wealth of knowledge, which it would be wise for the world to preserve.

Progress Can Kill: Survival Report Reveals World’s Highest Suicide Rate

A new report published by Survival International reveals that the appalling suicide rate among the indigenous Guarani Kaiowá people of southern Brazil is the highest in the world.

The rate of self-inflicted deaths within the tribe is 34 times the Brazilian national average, and statistically the highest among any society anywhere on earth. Suicide rates among many other indigenous peoples such as Aboriginal Australians and Native Americans in Alaska also remain exceptionally high. This can be viewed as the inevitable result of the historical and continuing theft of their land and of "development” being forced upon them.

The report, “Progress can Kill”, exposes the devastating consequences of loss of land and autonomy on tribal peoples. As well as the shockingly high suicide rates among tribes, it also reveals high rates of alcoholism, obesity, depression and other health problems.

Particularly striking statistics include the sky-rocketing rates of HIV infection in West Papua, which increased from almost no cases in 2000 to over 10,000 by 2015, and the rate of infant mortality among Aboriginal Australians – twice that in wider Australian society. In large parts of the world, poor nutrition continues to cause further problems, such as malnutrition for Guarani children, who are forced to live on roadsides, and obesity for many Native Americans, for whom junk food is the only viable option.

Roy Sesana of the Botswana Bushmen, forcibly evicted from their land in 2002, said: “What kind of development is this when the people lead shorter lives than before? They catch HIV/AIDS. Our children are beaten in school and won’t go. Some become prostitutes. We are not allowed to hunt. They fight because they are bored and get drunk. They are starting to commit suicide. We never saw this before. Is this “development”?”

Olimpio, of the Guajajara tribe in the Brazilian Amazon, said: “We are against the type of development the government is proposing. I think some non-Indians’ idea of “progress” is crazy! They come with these aggressive ideas of progress and impose them on us, human beings, especially on indigenous peoples who are the most oppressed of all. For us, this is not progress at all.”

All of these statistics demonstrate the fatal consequences of forcing change on tribal societies in the name of “progress” and “development”. In many cases, tribes have been forced to move away from abundant and sustainable food sources and a sure source of identity in favour of poverty and marginalization on the fringes of mainstream society. Tragic repercussions of such forced change can continue even several generations down the line.

Around the world, tribes continue to fight for the recognition of their right to live on their lands in peace. Where this right has been respected or restored, tribes flourish. For example after the creation of an indigenous reserve in the northern Amazon in 1992, medical teams worked with tribal shamans and together they halved the mortality rate among the Yanomami Indians. Likewise, the Jarawa In India live on their ancestral lands and enjoy what has been called a “life of opulence”. Nutrionists rate their diet as “optimum”.

Muslim Women: Breaking The Glass Ceiling Of Patriarchy

Moin Qazi

Muslim women across South Asia are slowly getting empowered to stand up to patriarchal practices that undermine their dignity. In literate societies, Muslim women, like their counterparts in other creeds, are an empowered community. First, they challenge cultural norms within their communities that deny Muslim women rights and visible roles. They believe that rights have been accorded to them in foundational Islamic texts, but that cultural interpretations of these same texts disallow what is rightfully theirs. They do not call this a feminist struggle, but describe this as a reclamation of their faith.

Muslim women’s activism around education and equal opportunities are often underpinned by their emancipatory readings of foundational Islamic texts. Muslim women are also challenging patriarchy that all women experience around unequal power hierarchies in society and the objectification of women’s bodies in some sections of the media. In this regard they stand with their sisters of all backgrounds.

Muslim women’s traditional importance in Islamic society has always been and continues to be the foundation of the Islamic family. Social values strongly reinforce orientation towards marriage and children as the normative pattern based on Muhammad’s (peace be upon him) own example. Child rearing, early education, and socialization of children are among women’s most important tasks in Islamic societies worldwide. Although traditionally excluded from the public male domain, Muslim women have been privately involved in study and oral transmission of Islamic source texts (Qur’an and Hadith). In modern times, they have entered into both secular and religious forms of education with enthusiasm supporting their long standing role as family educators and moral exemplars as well as training for professional careers in the workplace outside the home.

The Qur’an recognizes the childbearing and childrearing roles of women, but does not present women as inferior to or unequal to men. On the contrary, central to Islamic belief is the importance and high value placed on education. From the true Islamic point of view, education should be freely and equally available to women as much as men.

Islam anticipates the demands of Western feminists by more than a thousand years. A stay-at-home wife can specify that she expects to receive a regular stipend, which is not that far from the goals of the Wages for Housework campaign of the nineteen-seventies. Elsewhere, the fully empowered Muslim woman sounds like a self-assured, post-feminist type—a woman who draws her inspiration from the example of Sukayna, the brilliant, beautiful great-granddaughter of the Prophet Muhammad (SAW). She was married several times, and, at least once, stipulated in writing that her husband was forbidden to disagree with her about anything. All these conditions are based on the canons of Islam and on early Muslim practice. A Muslim woman, cannot be forced to enter into marriage without her agreement; indeed she has the right to revoke a marriage to which she did not agree in the first place.

We now have an inquisitive and empowered generation that will not easily accept rules and codes without reasoning them out and arguing on every strand before embracing it. A very heartening development is that unlike earlier times when only those who had finally retired from all worldly responsibilities would make the hajj pilgrimage, the youth is very actively participating in this most potent Islamic exercise. A hajj is a revolutionary experience which radically transforms one’s mindset and provides a correct perspective of Islam. An exposure to a composite global culture gives an invigorating perspective to the pilgrim.

Few Muslim women outside the urban areas may want to behave like Western women. The sexually exploitative element remains high in the West, however strident the rhetoric of sexual equality. Perhaps this is best illustrated by the well-known cigarette ad depicting a woman smoking: ‘You’ve come a long way, baby’. The message is clear: you too may now die of cancer through smoking. The high rate of divorce and sexual disease are common consequences of the reckless drive to equate the sexes and ‘free’ sexual relationships. Comparison may mean little outside the cultural context, but it is important to point out that until a hundred years ago Western women had virtually no rights in law or practice. Over a thousand years before the first European suffragette, Islam gave far reaching rights and a defined status to women. But these Western attitudes have undoubtedly helped to stimulate discussions of the problem in Muslim urban society thereby revealing the gap between the talk of the Islamic ideal and the actual situation of women.

Women emerged as the centerpiece of the Western narrative of Islam in the nineteenth century, and in particular in the later nineteenth century, as Europeans established themselves as colonial powers in Muslim countries. Their narratives simultaneously and hypocritically perpetuated the Victorian English narrative that European men were superior to women while also denigrating Muslim culture for being oppressive to women. The veil, to Western eyes, then became the most visible marker of the differentness and inferiority of Islamic societies. The Muslim resistance to this colonialism, then, supported veiling, not necessarily as a symbol of female subordination, but as a reaction against colonization and assumptions of European supremacy.

Muslim women certainly do not share the western notion of femisnism. These women do not accept that being feminist means being Western and believe that Western women should be respectful of other paths to social change. First, there are multiple causes of discrimination against women, and religion is but one. Second, gender relations structure women’s options in all societies. Third, it is futile to focus on misery elsewhere as an escape from the realities of our own lives. And fourth, the issue of power remains crucial for understanding gender inequality in any society.

Western thinkers and practitioners must reconsider their assumptions about the role of Islam in women’s rights, and approach this topic with a more nuanced lens. They must understand the necessity of recognizing and consciously accepting the broad cultural differences between Western and non-Western conceptions of autonomy, as well as respecting social standards that reflect non-Western values. They should pay heed to what First Lady Michelle Obama expressed to hijab wearing students: “You wonder if anyone ever sees beyond your headscarf to see who you really are, instead of being blinded by the fears and misperceptions in their own minds. And I know how painful and how frustrating all of that can be.”

It is clear that Muslim women’s empowerment, like many things, cannot be imposed on a country or a culture from the outside. Men and women within these conservative communities must first find their own reasons and their own justifications to allow women a fuller role in society. Increasingly, they are finding those reasons within Islam. Like men, women deserve to be free. It is only a matter of time until the day comes when they [women] test their chains and break free. As Rumi says in the Mathnawi, “Woman is a ray of God. She is not just the earthly beloved; she is a creatior , not the created.”

The New Year stock sell-off

Barry Grey

The first trading day of 2016 quickly turned into a global financial debacle, with stock markets all over the world plummeting after the Chinese government shut down its major exchanges to prevent a full-scale crash.

The sell-off confirmed the year-end expressions of foreboding by bourgeois commentators over the prospects for world capitalism in the new year. Whether Monday’s market rout is the beginning of an implosion of unsustainable financial bubbles or an anticipatory financial heart attack remains to be seen. One thing is certain, however. It is a symptom of profound and insoluble contradictions that have only intensified since the Wall Street crash more than seven years ago.

The collapse on Chinese markets, with the Shanghai Composite Index closing with a loss of 6.9 percent, was triggered by new data showing that Chinese manufacturing activity fell in December from the already depressed level of the previous month. The December decline marked the tenth consecutive monthly contraction.

The report confirmed that the slowdown in China to its lowest growth rate in a quarter century was likely to worsen in 2016. Given the immense role of the world’s second-largest economy and central manufacturing hub as a magnet for imports, including oil and other industrial commodities as well as manufactured goods, the indication of stagnation spread fears of a further fall in commodity prices and a deepening crisis of commodity-exporting nations from Brazil and Russia to Australia and Canada.

Japan’s Nikkei 225 index fell by more than 3 percent. Germany, a major exporter to China, suffered a 4.3 percent decline on its DAX stock index. The other major European indexes fell by more than 2 percent, and the EURO STOXX 50 index declined by 3.14 percent.

The global market sell-off was compounded by negative economic data from the US. The Institute for Supply Management reported that its index of factory activity fell to 48.2 in December from 48.6 in November. Any reading below 50 denotes contraction. The figure for December was the weakest since June 2009 and marked the first time since the 2008 crash that the US manufacturing sector had suffered two consecutive monthly contractions.

At the same time, the Commerce Department reported that US construction spending fell 0.4 percent in November. The dismal data prompted economists to lower their fourth-quarter 2015 projections for US economic growth to as low as a 1.1 percent annual rate. The figures confirmed that the US, previously cited as the “bright spot” in a world economy dominated by stagnation and slump, is itself in an industrial recession.

The US indexes fell sharply, with the Dow ending the day down nearly 1.6 percent, the S&P 500 down 1.53 percent, and the Nasdaq 2 percent lower.

The indicators of a deepening crisis in production sent shock waves through the financial markets because they portend the looming collapse of a vast speculative house of cards built up since the 2008 Wall Street crash, which sits atop a real economy that has never recovered from the Great Recession. The dirty secret of the so-called “recovery” is that it has been dominated by an expansion of the types of parasitic and quasi-criminal activities that triggered the financial crisis and depression in the first place.

The US and world central banks and all of the major governments responded to the breakdown of capitalism in 2008 by transferring trillions of dollars in public assets to the bankers and hedge fund billionaires, no strings attached. They were free to do with the blood money as they saw fit. Even the feeble and token proposals to rein in CEO pay at bailed-out corporations were blocked by the financial moguls and their bribed politicians.

Untold trillions were pumped into the financial markets to engineer a record rise in stock prices for the benefit of the rich and the super-rich, whose fortunes doubled in the aftermath of the 2008 crash.

At the same time, governments launched brutal attacks on the working class to make it pay for the bankrupting of the state. These attacks—austerity, wage cutting, mass layoffs—bolstered the profit margins of the corporations and further enriched the top 10 percent, and especially the top 1 percent and top 0.1 percent.

The corporations used their massive cash hoards not to expand production or create decent-paying jobs, but to find new avenues for speculation, plowing money into the so-called emerging market economies, the booming energy sector, and high-yield, high-risk junk bonds. While 2015 was a year of rising poverty and desperation for the masses, it was a record year for job-destroying and socially destructive activities such as mergers and acquisitions, stock buybacks and dividend increases.

The McKinsey Global Institute last year published a report that gives some idea of the colossal growth of debt in the world economy—a measure of the increase in financial speculation and swindling. It noted that global debt has grown by $57 trillion since 2007, raising the ratio of debt to the world’s gross domestic product by 17 percentage points. China’s total debt has quadrupled, rising from $7 trillion to $28 trillion by mid-2014.

In an article published on January 1, the Wall Street Journal noted that in 2015 “the American corporate landscape was dominated by activist investors, buybacks, currencies and deals”—in other words, by speculation. Meanwhile, the real economy is being starved of productive investment. Capital spending by members of the S&P 500 index fell in the second and third quarters of last year compared to 2014, the first time there have been two consecutive quarterly declines since 2010.

The final weeks of 2015 saw mounting signs that the underlying stagnation and slump in the real economy—marked by plummeting oil and commodity prices, declining global trade and dismal or negative growth rates—is beginning to undermine the mountain of speculative debt. The prices of energy-related junk bonds began to fall sharply, and mutual funds that speculate in them suffered a rush of redemption orders, prompting two such funds to refuse to honor redemption requests from investors.

The social and class significance of the further explosion of financial parasitism is indicated in statistics that document the massive redistribution of wealth from the working class to the bourgeoisie that has taken place.

The chief economist of the World Bank published an article on January 1 pointing to a “remarkable statistical trend” in high and middle-income countries. The article noted: “Total labour income as a percentage of GDP is declining across the board and at rates rarely witnessed. From 1995 to 2015, labour income dropped from 61 percent to 57 percent of GDP in the US; from 66 percent to 54 percent in Australia; from 61 percent to 55 percent in Canada; from 77 percent to 60 percent in Japan; and from 43 percent to 34 percent in Turkey.”

Under conditions of widening wars in the Middle East and military buildups in Europe and Asia, accompanied by police-state measures imposed internally in country after country on the pretext of fighting terrorism, the underlying economic uncertainty as the new year begins intensifies great power tensions and drives the ruling elites further along the road to war and dictatorship.

At the same time, a major contributor to the sense of foreboding and fear of shocks that predominates in ruling class circles as the new year begins, reflected in the volatility on financial markets, is the sense that the coming year will see a growth of working-class opposition and struggle. The year just ended was marked by the initial signs of a new period of class struggle, with strikes and protests multiplying from Europe to China to Latin America and the United States.

In the US, the resistance of autoworkers to the imposition of new pro-company contracts by the auto bosses and the United Auto Workers union, and the turn of thousands of autoworkers to the World Socialist Web Site and the WSWS Autoworker Newsletter for information and political leadership, herald the reemergence of the most powerful detachment of the international working class into mass struggle.

Monopolisation of wealth by UK super-rich accelerates

Barry Mason

The Office for National Statistics (ONS) has released its latest survey of the wealth of private households in the UK. Known as the Wealth and Assets Survey, the latest report covers the period July 2012 to June 2014. According to the ONS, the survey is compiled “by gathering information on, among other things, levels of savings and debt, saving for retirement, (and) how wealth is distributed across households …”

Its main findings showed that the total wealth of private households in the UK, which includes wealth from private pensions, was over £11 trillion. However, the wealthiest 10 percent of households owned 45 percent of the wealth whilst the least wealthy 50 percent of households held only 9 percent of total aggregate household wealth.

The concentration of wealth is expressed in the survey findings that show the top 1 percent of wealthiest households have as much wealth as the poorest 57 percent combined. The poorest 1 percent of households has just 0.05 percent of total wealth.

The ONS report notes the disparity in the distribution of wealth: “The distribution of wealth is highly skewed towards the top—the wealth held by the richest 10 percent of households combined was just under £5 trillion. … Conversely the combined wealth of the bottom half of households … was less than £1 trillion. … The wealth held by the top 10 percent of households was … over 875 times greater than that of the least wealthy 10 percent of households.”

There are around 26 million households nationally, with the super-rich in just 260,000 households now monopolising most of the UK’s wealth.

On average, each household in the top 1 percent of wealthiest households holds wealth of around £24 million. For the top 10 percent of wealthiest households the figure is around £1 million, whilst for the poorest 10 percent the value of their assets was £12,600 or less.

The total measure of aggregate wealth covering the survey period shows an increase of 18 percent over the previous survey period of July 2010 to June 2012, with the median total wealth figure increasing by 4 percent to £225,100. However, the increase is skewed sharply towards the richest households. The wealth of the top 10 percent of wealthiest families increased by 21 percent, but for the least wealthy 50 percent of households the increase in their aggregate was a mere 7 percent.

The ONS figures note the regional disparities of household wealth, with the average figure for the north-east being £150,000, while for the south-east the figure is more than double at £342,000.

Duncan Exley, the director of the Equality Trust, which monitors the impact of inequality, told the Guardian: “When such a huge chunk of the country’s wealth is found in the hands of so few people, it is clear something has gone terribly wrong. Aside from the disproportionate power this provides the richest, we know this vast inequality also weakens our economy and damages our society.”

The Equality Trust commentary on the latest ONS figures published December 21, headlined “Richest 1,000 wealth increase could pay for Christmas for everyone”, highlighted the sheer scale level of inequality in the UK. It notes: “[I]t’s even more shocking when you look at the super-rich. The richest 1,000 people in the UK have more wealth than the poorest 40 percent and the richest 100 more than the poorest 30 percent. Last year the wealth of the richest 1,000 people increased by around £28 billion.

“Let’s imagine that this wealth was used more equitably. Perhaps unsurprisingly it turns out £28 billion goes quite a long way. In fact £21.5 billion would cover the total Christmas spend of all households in the UK, that’s all food, drink, cards and presents paid for, with a few billion left over. In other words, a single year’s increase in the wealth of just 1,000 people could essentially ‘pay for Christmas for everyone’.

“You don’t even have to look at the richest 1,000, the top 10 will suffice. They saw their wealth increase by £3.25 billion last year. That’s enough to pay for the festive food and drink for over 20 million households. It could also pay for all the presents given by nearly 5.5 billion households, or a greater necessity, December’s gas and electricity bill for every household in the UK.”

For many households their main measure of wealth came from their ability to buy a home. Currently around 65 percent of people own their own home, but this is down from 73 percent in 2007. Again there are regional differences, with many in London and the south-east priced out of the market as property prices soar, driven in many instances by speculators piling in, regarding property as a lucrative way to rapidly increase their wealth.

For the majority of people house prices have been outpacing earnings for the last 20 years. This has accelerated especially since the global financial crisis of 2008 and the squeeze on earnings for millions of workers.

A Resolution Foundation report published December 19 highlights the difficulties faced by first-time buyers. Titled “Dealing with the housing aspiration gap”, the report notes: “[B]uying a home appears an ever more distant dream for millions. … low to middle income households saving 5 percent of their disposable a year were able to accumulate the deposit required for an average first time buyer home over the course of around three years in the 1990s. Today that figure is 24 years.”

Citing a Bank of England survey the report notes: “It shows that just under half (46 percent) of the one third of families who don’t already own their own home believe they’ll never do so …”

The growing gap between a rich elite and the majority is acknowledged by the government’s own Social Mobility & Child Poverty Commission report published this month. It notes: “There is a growing social divide by income and by class … the income share of the top 10 percent has increased from 28 percent to 39 percent since 1979 and the income share of the top 1 percent has more than doubled from 6 percent to 13 percent over the same time period.”

Pointing out that the concentration of wealth exploded under both Labour and Tory governments, the report adds: “[T]he wealth share of the top 10 percent has increased from 59 percent to 66 percent since 1991 and the wealth share of the top 1 percent has increased from 19 percent to 23 percent. … At the very bottom of society there are more than 1 million children living a life of persistent poverty. They are excluded from sharing in the many opportunities that life in modern Britain affords.”

These reports and surveys all point to the fact that such extremes of wealth and income are an entrenched feature of British capitalism. Society is sharply polarised, with a fabulously wealthy elite at one end, and broad sections of the population, with many surviving on next to nothing, at the other.

America’s richest 400 households paid a 16.7 percent tax rate in 2012

Tom Eley

In 2012, the top 400 U.S. taxpayers—those who took home more than $100 million—paid an effective tax rate of under 16.7 percent. These 400 households collectively comprise 0.0001 percent of taxpayers, but accounted, by themselves, for roughly 1.5 percent of all income.

In 2013 George W. Bush-era tax cuts expired, increasing the capital gains tax upward from 15 percent to 23 percent, which drove the effective tax rate for the super-rich up to 22.9 percent—still far lower than the statutory marginal rate of 39.6 percent that is supposed to be paid on incomes of over $415,000.

Anticipating the change, which was the result of a deal worked out between Republicans and the White House early in the Obama administration in order to avoid the so-called “fiscal cliff,” the super-rich “sold assets before the deadline to avoid higher taxes, leading to a huge surge in income in late 2012,” notes the Wall Street Journal. In that bonanza year the average income of the top 400 taxpayers was $336 million—$70 million more than in 2013.

The effective tax rate for the super-rich is lower than the statutory marginal rate imposed on working class families. Single workers pay a tax rate of 25 percent, after payroll deductions, for income of over $36,000; for single workers who earn more than $88,000, the income tax rate rises to 39.6 percent

How is it that the super-rich pay a lower tax rate than many working class Americans? Put simply, it is because the rich don’t work. Tax rates on income generated in dividends and capital gains—profits gained by stock market performance and by flipping property such as securities and large real estate holdings—are far lower than they are on tax rates imposed on labor.

In 2013, the 400 richest individual taxpayers received, by themselves, 5.3 percent of the entire national income in dividends, and 11.2 percent of all income derived from capital sales. For 2012, the same group accounted for 8.34 percent of taxable dividends and 12.26 percent of capital gains. Had these profits been taxable at the rate of salary or wages, super-wealthy taxpayers would have seen their tax liability more than doubled.

The super-rich’s efforts to avoid taxes have created an industry in itself, a December 29 analysis in the New York Times points out. “[T]he very richest Americans have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes,” write authors Noam Scheiber and Patricia Cohen. “Some call it the ‘income defense industry,’ consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax maneuvers, virtually none of them available to taxpayers of more modest means.”

Among the tax-dodge mechanisms used by the top 400, according to the Times, are “convoluted partnerships and high-end investment funds,” “opaque family trusts,” and “foreign shell corporations.” But the basic strategy is to convert “one type of income into another type that’s taxed at a lower rate.”

As one example, the Times cites hedge fund manager Daniel S. Loeb, who “has invested in a Bermuda-based reinsurer—an insurer to insurance companies—that turns around and invests the money in his hedge fund. That maneuver transforms his profits from short-term bets in the market, which the government taxes at roughly 40 percent, into long-term profits, known as capital gains, which are taxed at roughly half that rate. It has had the added advantage of letting Mr. Loeb defer taxes on this income indefinitely, allowing his wealth to compound and grow more quickly.”

There is also the tried-and-true tax shelter known as “philanthropy.” The top 400 taxpayers account for, by themselves, 6 percent of all tax deductions claimed for charitable donations.

The exploitation of the US tax system by the mega-wealthy is surpassed only by tax cheating by the firms they control. According to an October, 2015 report by the PIRG Education Fund and Citizens For Tax Justice, the vast majority of America’s Fortune 500 hid profits in offshore tax havens in 2014—especially the Cayman Islands and Bermuda. These companies, the report concludes, reported an accumulated $2.1 trillion in offshore income solely for tax avoidance purposes. Fortune 500 corporations likely have dodged $620 billion in federal income taxes on these offshore profits, the study concludes—a figure about 8 times greater than Obama’s proposed spending on education in the 2016 federal budget.

The claim that such profits are actually “earned” in these Caribbean island statelets is absurd on its face. US Fortune 500 profits in Bermuda and the Cayman Islands amount “to 1,643 percent and 1,600 percent respectively of each country’s entire GDP,” the report notes.

The biggest single tax dodger is tech giant Apple, which has avoided paying $59.2 billion in US taxes through stashing $181.1 billion offshore, much of it hidden in Ireland.

So effective are US corporations at dodging the federal statutory corporate rate of 35 percent, that their effective tax rate now stands at roughly 17 percent, according to data compiled by economist Gabriel Zucman in his recent book, The Hidden Wealth of Nations.

US corporations are leading the way in a global phenomenon of tax dodging. Zucman uses a simple method to demonstrate that there are trillions of dollars in hidden wealth circulating in the global economy. Mathematically, financial liabilities should be cancelled out by assets for a net zero, and vice versa. But Zucman found that reported liabilities, globally, are $6 trillion larger than reported assets. He concludes the disparity is owed largely to money hidden in tax havens.

The super-rich and their corporations achieve these ends through domination of the US political system. As recently as December 18, a year-end fiscal package was signed into law by President Obama that included another $383 billion in tax cuts for corporations and businesses. Meanwhile, in the coming decade, federal spending is expected to decline by $8 trillion—much of it owed to cuts in health care and social spending. However, these “savings” will be largely offset by… declining tax revenue, meaning that the federal deficit will still grow by $7.7 trillion, according to 2014 projections by the Senate Budget Committee.

Both parties are fully in the service of the super-rich. The Times notes that the heads of various hedge funds favor, alternatively, Republican and Democratic candidates. James Simon gives to Democrats. Robert Mercer gives to Republicans. Simon’s hedge fund, currently under investigation by the IRS, is managed by Mercer. George Soros gives millions to Democrats, and claims taxes should be raised on the wealthy, even as his $24.5 billion hedge fund exploits tax loopholes. He and his hedge fund manager Stanley Druckenmiller give hundreds of thousands to Republicans.

The current state of affairs is the outcome of a longer process. In 1961, the high-end marginal tax rate for the wealthiest Americans stood at 91 percent. The liberal administrations of Democrats John Kennedy and Lyndon Johnson, responding to the first signs that the post-World War II global economic system was failing, reduced the tax rate of the top income bracket to 75 percent, and also cut corporate taxes from their statutory rate of 50 percent.

The assumption was that the rich and corporations would redirect this cash into investment. Instead, the tax cuts set the stage for the mergers and acquisitions wave of the late 1960s, and accelerated the outflow from the US economy of dollars that found more profitable returns overseas, exacerbating the underlying crisis of the Breton Woods system, by which the dollar was convertible to gold at the fixed rate of $35 per ounce.

The shift away from commodity production and toward parasitic financial speculation, at a certain point, went from being a policy error to a policy goal. A milepost was passed in 1979 when Federal Reserve chief Paul Volcker, Democrat Jimmy Carter’s appointee, raised the Fed’s benchmark overnight bank lending rate past 20 percent, redirecting investment from basic industry to finance.

The finance industry—which makes nothing tangible and whose principal “service” is simply the movement of money—has doubled its share of the US economy in the past half century, and, over the past 30 years, it has grown at a rate six times as fast as the rest of the economy—decades that correspond to a dramatic polarization of wealth in the US. All of this has been facilitated by the tax policies implemented by presidents, senators and congressmen of both parties.

“Lawmakers kept encouraging financial innovation,” the Washington Post noted in a recent analysis. “They did that by… loosening restrictions on the kinds of financial activities that the titans of Wall Street could engage in.” “Financial innovation” is, of course, a euphemism for swindling.

According to economists Thomas Philippon and Ariel Reshef, until the early 1980s Wall Street bankers were paid no more than other private sector professionals. Their research shows that the average Wall Street salary has gone from just under $50,000 in 1981 to over $350,000 in 2012. Today there are about two times as many “financial professionals” in the top 1 percent of US income earners as there were in 1979, and about 1 in 5 members of the richest .1 percent of Americans “work” in finance.

This has not been a socially neutral process. The growth of “complex financial products has served primarily to boost income for the firms themselves” Philippon’s research shows.

According to another recent study carried out by economists at Harvard and the University of Chicago, every dollar doled out to Wall Street executives actually makes the US economy 60 cents worse off.