Germany: Kaiser’s Tengelmann supermarket chain threatened with closure

Dietmar Henning

A high-level meeting of the Verdi trade union with the heads of the Kaiser’s Tengelmann, Edeka, Rewe, Norma and Markant supermarket chains was held on Thursday.

According to Verdi, all parties agreed to implement the special permission granted by federal Economics Minister Sigmar Gabriel to the takeover of the chain by Edeka. First, however, only a deadline extension has been agreed. By October 17, all parties wish to seek a “mutually acceptable solution.” In other words, the secret negotiations between the union and the company representatives will continue. Nondisclosure was agreed up to October 18, according to Verdi.

In addition to Verdi representatives and Tengelmann owner Karl-Erivan Haub, the heads of the Rewe, Norma and Markant supermarkets also participated. The three had lodged an appeal at the Düsseldorf Superior Regional Court against the authorization for the acquisition of Kaiser’s Tengelmann by Edeka, which had been granted by Gabriel (SPD, Social Democratic Party). The judges had then provisionally stayed the appeal. In order to clear the way for granting ministerial approval, all parties had to withdraw their appeal.

The billionaire Haub then set a deadline of October 7 for the sale of his supermarket chain to Edeka. Otherwise, the breakup of the retail stores would begin, he threatened, following a supervisory board meeting. Most of the 430 stores for which no buyer will be found would be closed, in all probability, and the workers dismissed. For good reason, therefore, the company’s nearly 16,000 workers rightly fear a “second Schlecker.” In one fell swoop in 2012, the insolvency of the Schlecker store chain had cost 25,000 employees (mainly women) their jobs.

Staff meetings were then held on Wednesday afternoon and Thursday morning in North Rhine-Westphalia (NRW) and Berlin. About 2,000 Kaiser’s Tengelmann employees gathered in Viersen. The logistics centre there supplies the company’s 115 branches in NRW. A breakup of the company threatens the jobs of 200 at the distribution centre as well as 400 staff working in administration in Mülheim an der Ruhr and at the meat plants.

Most workers have been worried about their future for almost two years. They expressed their anger and concerns on placards. “We don’t want to be on welfare,” read one sign. “We need our jobs!” “It’s about the lives of families!” and “What is more important: the market or people?” read others.

Tagesschau.de spoke to Andreas Kersting, a 55-year-old with 38 years working at Kaiser’s Tengelmann, including in sales and on the checkout. “My biggest concern,” he said, “is can I find a job at my age? The competition only hires young people who are cheaper. I’ve been working since I was 16. If I become unemployed now, I wouldn’t know what to do at the employment office.”

Among the company’s staff in Berlin, fear for their jobs is also very great. On Thursday morning, 2,500 attended a staff meeting at the Estrel hotel in Berlin Neukölln. Here again, the mood swung between anxiety and hope. “Whether we are taken over by Edeka or broken up—I hope that there is a social solution,” one employee told Tagesspiegel.

The Berlin works council chairman Volker Bean had also invited Mayor Michael Müller (SPD), state minister for employment Dilek Kolat (SPD) and state minister for economics Cornelia Yzer (CDU, Christian Democratic Union). But none of them came. A warehouse worker with 30 years’ seniority at Kaiser’s was “appalled,” reporting that some of his colleagues were at their wit’s end. If Kaiser’s was broken up, warehouse workers would be laid off first, he feared, like his colleagues in Viersen. “If the ministerial authorization does not apply, I’m unemployed.”

The main reason for the desperation of many employees is that Verdi refuses to conduct a serious struggle to defend jobs. Like the situation four years ago at Schlecker, the union is trying to keep the workers quiet until the last moment, limiting its actions to sending begging letters to the corporate bosses. At the staff meeting in Berlin, a resolution was passed in which the heads of Rewe, Norma and Markant are asked to withdraw their appeal against the acquisition of Kaiser’s Tengelmann by Edeka.

But even if Kaiser’s Tengelmann is taken over by Edeka, it would still entail massive job losses. In Viersen, Kaiser’s Tengelmann CEO Raimund Luig declared that 2016 would see the company “making enormous losses, sales have continued to decline and the competition from the discounters is growing.”

The roles of all those in this collusion are clear. All of the wealthy owners are defending their profits and rely on Verdi for this. Corporate boss Haub is seeking to free himself of his losses through the sale of his supermarket chain. If Kaiser’s Tengelmann is broken up, he will pocket millions for the profitable stores, especially the two in Berlin and Munich, regarded as “prime sites.” Should Edeka come into play, together with Verdi, it would be tasked with closure of the unprofitable stores. Additionally, Haub hopes that the profitable branches can then be incorporated into the Edeka subsidiary Netto, where Haub is also involved.

No matter how the deal proceeds, it is directed against the workers. Behind the scenes, Verdi has clearly already agreed conditions for the coming job cuts. For example, at the meeting in Viersen, the works council chair announced that severance payments and a further six-months’ pay had already been agreed.

SPD leader Sigmar Gabriel is also not concerned about the interests of the cashiers and other workers at Kaiser’s Tengelmann. He wants to strengthen the influence of the trade union. If the ministerial approval is upheld, all decisions on Kaiser’s Tengelmann branches and their employees will be subject to the agreement of Verdi and NGG works council representative for the next five years. Gabriel is planning to strengthen the unions because he sees them as important partners of a possible SPD-Left Party-Green Party government, which will continue the policy of welfare cuts and military build-up begun 15 years ago with the “red-green” government of Chancellor Gerhard Schröder.

For its part, Verdi stands behind the owners—no matter who they ultimately are. After the first secret negotiations between Verdi, Haub, Edeka CEO Marius Morsa and Rewe CEO Alain Caparros on September 22, we wrote: “These clandestine negotiations are part of the union’s efforts to find the best way to push through job losses and keep those affected quiet for as long as possible. Verdi has taken on the task of enforcing the winding up of Kaiser’s Tengelmann against the workforce.”

For years, working conditions in the entire retail sector have deteriorated. The growing competition is mercilessly passed on to the employees, and always with Verdi’s signature of approval.

British pound plummets over “hard Brexit” fears

Nick Beams

The growing interaction between rising geo-political tensions and financial market volatility found dramatic expression on Friday when the British pound plunged in early trading as Asian financial markets opened.

The pound dropped by more than 6 percent in just two minutes on the back of reports that the United Kingdom would undertake a “hard Brexit,” that is, a clean break from the European Union (EU), rather than a limited withdrawal which maintained access to the common market.

The plunge coincided with reports of a tough stance by French President Francois Hollande over the terms of the British withdrawal—the negotiations for which British Prime Minister Theresa May has said will begin by April.

“The UK has decided to do a Brexit, I believe even a hard Brexit,” Hollande said. “Well, then we must go all the way through the UK’s willingness to leave the EU. We have to have this firmness. If not, we would jeopardise the fundamental principles of the EU.”

Hollande warned that unless a strong stand was taken, other countries would seek to leave the EU, while maintaining the advantages of membership without the obligations.

“There must be a threat, there must be a risk, there must be a price,” Hollande said. “Otherwise we will be in a negotiation that cannot end well.” His remarks came in a dinner address on Thursday night as markets opened in Asia.

Initial reports of the pound’s plunge, which was followed by a recovery of most of its losses, attributed it to a mistaken “fat finger” trade or the malfunctioning of an automated trading algorithm, whose effects were exacerbated by thinner trading in the Asian markets.

However the rapid descent—the biggest drop in sterling since the 11.1 percent plunge on the day the Brexit referendum outcome was announced on June 24—followed a continuous fall in the pound this week. At point on Friday, it reached $1.1841, compared to around $1.50 on the eve of the referendum, before pulling back to $1.2434. That was down 1.4 percent for the day and 4.2 percent for the week.

British Chancellor Phillip Hammond issued a statement in Washington, where he is attending the meetings of the International Monetary Fund and the World Bank, seeking to calm markets. Speaking to journalists, he denied the government had decided to pursue a “hard Brexit” strategy. The only thing that had changed was May’s clear statement on the timing of the issuing of an Article 50 notice, the formal mechanism under which official negotiations begin on the British decision.

But Hammond’s remarks will hardly bring calm over the longer term. Describing the situation on Friday as one of “turbulence,” he said he expected it to continue over the next five years, while negotiations took place.

The key question is whether, while formally leaving the EU, Britain remains part of the European customs union. If Britain made a complete break, trade relations with the EU would be conducted under World Trade Organisation (WTO) rules, rather than EU market arrangements—a situation that would impact adversely on British companies.

Hammond said no decisions had been made on the customs union question and the British government was “in the process of formulating our negotiating strategy.”

British business leaders are concerned that the government could be moving toward a “hard Brexit.” According to a report in the Financial Times, a letter drafted by the Confederation of British Industry (CBI) to the prime minister said any UK departure had to maintain special ties to the common market.

The CBI said barrier-free access to the single market “is vital to the health of the UK economy, especially to our manufacturing and service sectors” and the government “should give certainty to business by immediately ruling out this [WTO] option out under any circumstances.”

The fears of a “hard Brexit” were compounded by the populist rhetoric invoked by May in her speech to the Conservative Party annual conference, in which she denounced an “international elite.”

The CBI said: “The government must set out a clear road map for consulting with firms of all sectors and sizes to increase confidence that these complex decisions are taken on the basis of fact and a genuine understanding of the economic implications.”

Bank of England governor Mark Carney said he believed the sudden fall in the pound, followed by a recovery, was a technical matter and he had asked the Bank for International Settlements to undertake an investigation.

The response of financial market commentators to the pound’s plunge showed that they regard it as much more than just a “flash crash.”

Morgan Stanley strategist Hans Redeker said the new British government appeared to have “undertaken an economic course which could bear substantial risks” and talk of a “hard Brexit” added to the problem.

Sterling stability is vital to the British economy. It depends on an inflow of foreign funds to finance its current account deficit, which runs at 6 percent of its gross domestic product. If financial markets fear a further major sterling devaluation, those funds could dry up.

According to Ulrich Leuchtmann of the German Commerzbank, the risk of a massive sterling devaluation has increased.

“It is therefore no surprise that we are more likely to see situations in which nobody still wants to offer a market for sterling sellers,” he told the Financial Times. “The flash crash was more than a market anomaly. It was also a signal that a ‘sudden stop’ of current account financing is now more likely.”

The impact of the sterling’s fall was reflected in other financial markets. The UK stock market rose, because shares have become cheaper due to the lower value of the pound. However, the yield on the benchmark 10-year government bond—which moves in an inverse relationship to its price—moved up 11 basis points (0.11 percentage points), leaving it 23 basis points higher for the week, at just under 1 percent.

If interest rates continue to rise because of a falling pound, this will have a knock-on effect in financial markets, which have become ever more dependent on the inflow of cheap money to finance speculation, for which the City of London is one of the leading global centres.

One month to the US presidential election—what lies ahead

Patrick Martin

The US presidential election campaign, with one month to go, is being conducted on a level so debased and filthy as to be virtually indescribable. Another nationally televised exercise in mutual mudslinging, name-calling and evasion of the issues looms on Sunday night, in the second presidential debate.

The two main candidates, Democrat Hillary Clinton and Republican Donald Trump, are the most unpopular political figures in modern US history, each detested by more than half the population, each rightly regarded as a self-serving liar. One is a fascistic bigot and demagogue, the other a stooge of Wall Street and the military-intelligence apparatus.

In the final month of the campaign, the usual apologists for the Democratic Party—the trade unions, liberal media editorialists from the New York Timesto the Nation magazine, the upper-middle-class advocates of identity politics—will redouble their claims that the election of Clinton over Trump is the only thing that prevents the collapse of American democracy.

As the Nation put it in its predictably hyperbolic editorial statement endorsing Clinton, published this week, the case for the former Secretary of State “can be summed up in two words: Donald Trump.” Even reliably pro-Republican newspapers have chimed in with warnings that the election of Trump would deal a devastating blow to the political stability of the United States. TheAtlantic magazine went so far as to note that its endorsement of Clinton was only the third in its history, following its support of Lyndon Johnson over Barry Goldwater in 1964, and of Abraham Lincoln in 1860.

It should be pointed out that if American democracy is in such a fragile condition, it must be due to far more profound reasons than the election campaign of the Manhattan real estate and casino billionaire, who currently trails Clinton by a narrow margin in the polls. The editorial wise men do not attempt to explain the causes of this crisis to their readers. Nor have they presented any convincing rationale for why the election of Clinton rather than Trump will save the country from impending doom.

There is an enormous chasm between what the candidates talk about each day in the election campaign, and the measures that the American capitalist class is preparing to carry out once the identity of the next occupant of the White House has been settled. Here are three major issues that are unlikely to be referred to, let alone seriously discussed, in Sunday’s debate:

The deepening global crisis of capitalism: According to a report issued by the International Monetary Fund ahead of its annual meeting, which began Friday in Washington, debt in the nonfinancial sector of the world economy has doubled in nominal terms since 2000, reaching a staggering $152 trillion last year, more than 225 percent of global GDP. This insupportable financial bubble, combined with weakened banking structures and sharpening trade tensions between the major powers, make a 2008-style market crash, on an even larger scale, increasingly likely, leading to a global depression.

The US drive towards war with Russia and China: The Obama administration has stepped up its campaign of vilification and denunciation of Russia Friday, with Secretary of State John Kerry demanding war crimes charges for alleged Russian bombing of civilians in Syria, while an official US government report blamed Russia for hacking into state voting systems and the computers of the Democratic National Committee. At the same time, the Pentagon is increasing its military pressure on China over its occupation of islets in the South China Sea. The next US president will take office on the brink of war with one or both nuclear powers.

The escalating class struggle in the United States: While Clinton campaigns as the continuator of the supposed “successes” of the Obama administration, Trump points to the dismal economic conditions for wide layers of the working class. But whether they spread complacency or profess alarm, both candidates are completely hostile to any movement from below. Trump’s demands for “law and order” would be applied with brutal force to struggles of the working class. Clinton is allied to the trade unions, which seek to sabotage any struggle to defend jobs and wages, and to the urban political machines that control the police forces engaged in daily violence against workers and youth.

It is these processes, which can be summed up as the breakdown of world capitalism and the collapse of the social equilibrium in all the major countries, that account for the increasingly nervous and alarmist proclamations from liberal editorialists. The ground is indeed shifting beneath their feet, but not because of the personality of Trump. He is only a noxious symptom of the overall breakdown. Their real fear is the outbreak of a movement from below against both parties and the capitalist system they defend.

It’s Not “Cute” When Men Take Care of Children

Julian Vigo

Recently a woman posted this photo of Stuart Hall and Henry Wortis taking care of children in a crèche at the first Women’s Conference at Ruskin College, Oxford, in 1970, with the caption: “Brief intermission: here is Stuart Hall on creche duty at a feminist conference in Oxford. Isn’t he cute?”  I responded to the tweet stating that it was not cute in the least, noting that when we exceptionalise men who take care of children one day in a year, we are creating a situation where women are still pegged to be the “primary care givers” and men the drop-in, once-in-a-while, father for whom taking his children out is not seen as an obligation, but as a token to the daily labour of women.

Much in the same way that men carving roast or turkey on Christmas—oddly construed as their having “cooked a meal”— becomes the symbolic gesture of men’s contributing to household labour, the reality is that men are still contributing less inside the home: from buying groceries, cooking and preparing meals, cleaning, to planning social activities.   While women are on par with men in terms of bill payments, men have much work to do to catch up with women.

So when I come across a statement by anyone who interprets a one-off event of men caring for children as “cute,” I recoil and react.  For there is nothing “cute” about men standing in a photo op (conscious or not) for a task which is still today, forty years later, overwhelmingly the domain of women.

If anything, women’s rights are in recession, not progression and what should be a field of equal participation ends up, still today, being quite unequal in terms of who is cleans up household messes, who prepares and executes the endless “to do” lists, who effectively raises children and then those who get to tokenise these activities for photo ops. While certain statistical patterns for men and women are shifting lending to a superficial reading that equality between the sexes is on the horizon or already here, a quick glimpse over these figures reveals that nothing of the sort is taking place.

Take, for instance, the rate of cosmetic surgery for men which has been soaring in recent years.  While women are still undergoing cosmetic procedures, the reasons are increasingly related to “body dissatisfaction” while for men the reasons for their somatic modifications are often professional in nature.   Or the rate of carers of elderly and disabled which is still largely dominated by women to such a degree that Care England is having difficulty recruiting professional male carers for elderly men, and has had to ask the government to help out in recruiting male care workers for nursing homes because of what it deemed as “entrenched societal perceptions” of who should do the caring.  And on the receiving end of healthcare, women are still coming up with the short end of the stick with disparity in services, medical research not reflecting women’s bodies in clinical trials, and women are under-presented in the decision-making of healthcare.

When I decided to have a child on my own, I was often asked wherever I was living—Haiti, Canada, India, Italy, and the UK—why I wanted to have children on my own.  My answer provoked laughter across all cultures, for what my words evoked rang true for all the women with whom I spoke: “I want to have one child, not two.”  This laughter confirmed that sexism is not just an international menu item well into the twenty-first century, it is a far-gone conclusion that women’s roles in the house have not changed very much and that in having children women will unlikely be granted more than this rare occurrence of a man in their lives coming in to give them a “day off.”

The reality of raising children, to include picking up minute food particles from their hair, floor, and wall, the physical labour of carrying them from the womb to the pushchair, and the constant maintenance of logistics and supplies, is that this is the unpaid labour that women have been performing for centuries.  And women attempting to return to the workforce are generally saddled with two choices: either to work to pay a nanny or daycare or, in many cases, to surrender the idea of returning to one’s professional life having to stay home to wait until the child starts school. These are not excellent options to most women, but they are the only options.

So while it’s not “cute” when men take care of children, it should be regarded as an imperative act of social inclusion.

How Brain Drain Exacerbates Health Care Crisis in Africa

Cesar Chelala

I started traveling to Africa on public health-related missions at the beginning of the 1980s. From the beginning, Africa caught my interest and my imagination. It is, after all, the continent where my father was born — when my Lebanese grandfather went to work providing food to miners in Transvaal. In 1981 I started going on public health missions to many countries worldwide. Going to Africa was particularly interesting to me, since it allowed me to go to places and see situations that no tourist normally sees.

From the beginning I realized that there are two Africas: one normally portrayed in the media, a land of poverty, disease and war; and the other, a vital, energetic continent of hardworking men and women, a continent of beautiful children and young men and young women, a continent of humor and a continent of hope.

Today six of the 10 fastest growing economies in the world are in Africa. However, despite progress important problems remain such as youth unemployment. It is estimated that 70 percent of the population in Sub-Saharan Africa is under the age of 30 and that 60 percent of the unemployed are also young people.

New policies should be developed to incorporate them into the labor force. To achieve that, it is important to provide them with the basic skills that would enable them to live up to their earning potential. UNESCO and the International Labor Organization (ILO) have recommended that governments, international donors and the private sector develop integrated policies to create jobs for young people and ease the transition from school to work.

The emigration of professionals and young people has had a deleterious effect on the economies of African countries. Dr. Lalla Ben Barka, from the UN Economic Commission for Africa (ECA) said, “In 25 years, Africa will be empty of brains.” Some facts support his assertion: since 1990, Africa has been losing 20,000 professionals annually; over 300,000 professionals reside outside Africa; there are more African scientists and engineers in the U.S. than in the entire African continent. According to the United Nations, “emigration of African professionals to the West is one of the greatest obstacles to Africa’s development.”

In the health area, although considerable progress has been made in the fight against HIV/AIDS (South Africa will become the first African country to fully manage its HIV care and treatment program in a few years), other challenges remain. It is estimated that more than two million children under five are HIV-positive, and there are more than 12 million AIDS orphans placing social services under enormous stress.

HIV/AIDS, however, is not the only concern. The recent Ebola epidemic underscored the shortage of doctors and the weakness of the health infrastructure in several of the affected countries. On the positive side, and thanks in great part to foreign aid to combat the epidemic, basic health services in several countries have considerably improved.

South Africa has the highest tuberculosis death rate per capita worldwide, followed by Zimbabwe and Mozambique. The situation is exacerbated by the high number of cases of multidrug-resistant tuberculosis in several countries. In addition, diarrheal and respiratory infections, malaria, measles and malnutrition represent big threats to children’s health. Malaria is the leading cause of death among children under 5.

The continuing exodus of physicians and nurses to industrialized countries exacerbates health problems. The World Health Organization (WHO) estimates that 23,000 health care workers leave Africa annually. Malawi, a country of 15.38 million people, has a severe shortage of doctors and nurses. According to WHO, there is only one doctor for every 40,000 people in the country.

According to a 2011 study by the British Medical Journal, the lost investment of domestically-educated doctors migrating from sub-Saharan countries to Australia, Canada, the United Kingdom and the United States was close to $2.2 billion. According to WHO, of the 57 countries recognized to have critical shortages of health care workers, 36 are in sub-Saharan Africa. In addition to doctors, however, a wide array of professionals and technicians has left their countries of origin.

Health problems in Africa cannot be considered in isolation. Foreign technical and financial assistance is needed. More efforts must be made to increase access to primary health care, especially in rural areas, accompanied by health promotion, disease prevention and improved health education activities.

Effective aid must bypass corrupt governments and find ways of helping people directly. Aid to Africa should be aimed at strengthening civil society and community-based organizations. Religious organizations have proven to be extremely helpful in the fight against HIV/AIDS.

African governments need to provide education for all age levels, and they need better trade conditions for their products. They don’t need loans that end up in the pockets of those in power. They need financial assistance given in a carefully planned and responsible way.

Washington Leads the World to War

Paul Craig Roberts

What must the world think watching the US presidential campaign?  Over time US political campaigns have become more unreal and less related to voters’ concerns, but the current one is so unreal as to be absurd.

The offshoring of American jobs by global corporations and the deregulation of the US financial system have resulted in American economic failure.  One might think that this would be an issue in a presidential campaign.

The neoconservative ideology of US world hegemony is driving the US and its vassals into conflict with Russia and China.  The risks of nuclear war are higher than at any previous time in history.  One might think that this also would be an issue in a presidential campaign.

Instead, the issues are Trump’s legal use of tax laws and his non-hostile attitude toward President Putin of Russia.

One might think that the issue would be Hillary’s extremely hostile attitude toward Putin (“the new Hitler”), which promises conflict with a major nuclear power.

As for benefitting from tax laws, Pat Buchanan pointed out that Hillary used to her benefit a loss almost as large as Trump’s and during the Arkansas years Hillary even took a tax deduction for itemized pieces of used clothing donated to a charity, including $2 for one of Bill’s used underpants.

The vice presidential “debate” revealed that the Democratic Party’s candidate is so ignorant that he thinks Putin, who is democratically elected and has enormous public support, is a dictator.

Here is what we know about the two presidential candidates.  Hillary has a long list of scandals from Whitewater and Vince Foster to Benghazi and violation of national security protocols. She is bought-and-paid-for by the oligarchs on Wall Street, in the mega-banks, and in the military-security complex as well as by foreign interests.  The proof is the Clinton’s $120 million personal forture and the $1,600 million in their foundation.  Goldman Sachs did not pay Hillary $675,000 for three 20-minute speeches for the wisdom contained in the speeches.

What we know about Trump is that the oligarchic establishment cannot stand him and has ordered the Ministry of Propaganda, a.k.a., the US media, to destroy him.

Clearly, Hillary is the candidate of the One Percent, and Trump is the candidate for the rest of us.

Unfortunately, about half of the 99 percent is too dumb to know this.

Moreover, if Trump were to end up in the White House, it doesn’t mean he could prevail over the oligarchy.

The oligarchy is entrenched in Washington with control over economic and foreign policy positions, think tanks and other lobbyists, and the media.

The people control nothing.

What does the world think when they see Donald Trump damned because he doesn’t want war with Russia or the American economy moved offshore?

Where in American politics do Washington’s European, British, Canadian, Australian, and Japanese vassals see leadership worthy of their sacrifice of sovereignty and independent foreign policy?  Where do they even see a modicum of intelligence?

Why does the world look to the most stupid, vile, arrogant, corrupt and murderous government on the planet for leadership?

War is the only destination to which Washington can lead.

The United States as Destroyer of Nations

Daniel Kovalik

In the aftermath of the U.S. invasion of Iraq in 2003 – an invasion which many Iraqis believe left their country in the worst condition it has been since the Mongol invasion of 1258 — there was much discussion in the media about the Bush Administration’s goal for “nation-building” in that country.   Of course, if there ever were such a goal, it was quickly abandoned, and one hardly ever hears the term “nation-building” discussed as a U.S. foreign policy objective anymore.

The stark truth is that the U.S. really has no intentions of helping to build strong states in the Middle East or elsewhere. Rather, as we see time and again – e.g., in Yugoslavia, Sudan, Libya, Yemen, Syria, Somalia, Ukraine – the goal of U.S. foreign policy, whether stated or not, is increasingly and more aggressively the destruction and balkanization of independent states. However, it is important to recognize that this goal is not new.

Indeed, South Korean human rights scholar Dong Choon Kim, writing of the U.S. war in Korea (1950 – 1953) – a war which he opines was at least arguably genocidal – explains that even back then, the nation-building of Third World peoples was viewed as an act of subversion which had to be snuffed out.   As he explained, “[t]he American government interpreted the aspiration for building an independent nation as an exclusive ‘communist conspiracy,’ and thus took responsibility for killing innocent people, as in the case of [the] My Lai incident in Vietnam.” Thanks to the U.S. war on Korea, Korea to this day remains a country divided in half, with no prospects for unification anytime soon. Kim explains that the Korean War “was a bridge to connect the old type of massacres under colonialism and the new types of state terrorism and political massacre during the Cold War. . . .   And the mass killings committed by US soldiers in the Korean War marked the inception of military interventions by the US in the Third World at the cost of enormous civilian deaths.”

Similarly, the U.S. objective in Vietnam was the destruction of any prospect of an intact, independent state from being created. As Jean-Paul Sartre wrote as part of the International War Crimes Tribunal that he and Bertrand Russell chaired after the war, the U.S. gave the Vietnamese a stark choice: either accept capitulation in which the country would be severed in half, with one half run by a U.S. client, or be subjected to near total annihilation. Sartre wrote that, even in the former case, in which there would be a “cutting in two of a sovereign state . . . [t]he national unit of ‘Vietnam’ would not be physically eliminated, but it would no longer exist economically, politically or culturally.”   Of course, in the latter case, Vietnam would suffer physical elimination; bombed “’back to the Stone Age’” as the U.S. threatened. As we know, the Vietnamese did not capitulate, and therefore suffered near-total destruction of their country at the hands of the United States. Meanwhile, for good measure, the U.S. simultaneously bombed both Cambodia and Laos back to the Stone Age as well.

To understand the purpose behind such violent and destructive actions, we need look no farther than the U.S.’s own post-WWII policy statements, as well articulated by George Kennan serving as the State Department’s Director of Policy Planning in 1948:

We must be very careful when we speak of exercising “leadership” in Asia. We are deceiving ourselves and others when we pretend to have answers to the problems, which agitate many of these Asiatic peoples. Furthermore, we have about 50% of the world’s wealth but only 6.3 of its population. This disparity is particularly great as between ourselves and the peoples of Asia. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships, which will permit us to maintain this position of disparity without positive detriment to our national security. To do so we will have to dispense with all sentimentality and daydreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world benefaction…

In the face of this situation we would be better off to dispense now with a number of the concepts which have underlined our thinking with regard to the Far East. We should dispense with the aspiration to ‘be liked’ or to be regarded as the repository of a high-minded international altruism. We should stop putting ourselves in the position of being our brothers’ keeper and refrain from offering moral and ideological advice. We should cease to talk about vague — and for the Far East — unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are hampered by idealistic slogans, the better.

While it would have been impossible for the U.S. to continue to monopolize a full half of the world’s wealth after Europe, Japan, China and the USSR inevitably got up upon their feet after WWII, the U.S. has nonetheless done an amazing job of controlling an unjustifiable and disproportionate amount of the world’s resources.

Thus, currently, the U.S. has about 5% of the world’s population, and consumes about 25% of its resources. An article in Scientific American, citing the Sierra Club’s Dave Tilford, explains that,

“‘[w]ith less than 5 percent of world population, the U.S. uses one-third of the world’s paper, a quarter of the world’s oil, 23 percent of the coal, 27 percent of the aluminum, and 19 percent of the copper . . . .   Our per capita use of energy, metals, minerals, forest products, fish, grains, meat, and even fresh water dwarfs that of people living in the developing world.’” 

The only way the U.S. has been able to achieve this impressive, though morally reprehensible, feat has been to undermine, many times fatally, the ability of independent states to exist, defend themselves and to protect their own resources from foreign plunder. This is why the U.S. has teamed up with the world’s most deplorable forces in destroying independent states around the globe.

Just to name a few examples, since 1996, the U.S. has supported Rwandan and Ugandan forces in invading the Democratic Republic of Congo, making that country ungovernable and plundering its incredible natural resources.   The fact that around 6 million innocents have been murdered in the process is of no matter, and certainly not to the main stream press which rarely mentions the DRC. In Colombia, the U.S. has backed a repressive military and right-wing paramilitaries for decades in destabilizing whole swaths of the Colombian countryside, and in assisting multinational corporations, and especially extractive industries, in displacing around 7 million people from their homes and land, all in order to exploit Colombia’s vast oil, coal and gold reserves. Again, this receives barely a word in the mainstream press.

Of course, in the Middle East, Northern Africa and Afghanistan, the U.S. has been teaming up with Saudi Arabia and radical Islamist forces – forces the U.S. itself has dubbed “terrorist” – in undermining and destroying secular states.

As far back as the 1970’s, the U.S. began supporting the mujahidin in attacking the secular, Marxist state of Afghanistan in order to destroy that state and also to fatally weaken the Soviet state by, in the words of Zbigniew Brzezinski, “drawing the Russians into the Afghan trap . . . [and] giving to the USSR its Vietnam war.” Afghanistan may never recover from the devastation wrought by that fateful decision of the U.S. and its subsequent intervention which is now into its 15^th year and counting. As we know full well, the USSR never recovered either, and the U.S. is trying mightily to prevent post-Soviet Russia from becoming a strong rival state again.

Meanwhile, in Libya, the U.S. again partnered with jihadists in 2011 in overthrowing and indeed smashing a state which used its oil wealth to guarantee the best living standards of any country in Africa while assisting independence struggles around the world. In this way, Libya, which under Qaddafi also happened to be one of the staunchest enemies of Al-Qaeda in the world, presented a double threat to U.S. foreign policy aims. Post-intervention Libya is now a failed state with little prospects of being able to secure its oil wealth for its own people again, much less for any other peoples in the Third World. And so, mission accomplished!

In addition, as we learned from Seymour Hersh back in 2007, the U.S. began at that time to try to weaken Iran and Syria by supporting Sunni extremist groups to subvert those countries. As Hersh explained:

To undermine Iran, which is predominantly Shiite, the Bush Administration has decided, in effect, to reconfigure its priorities in the Middle East. In Lebanon, the Administration has cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations that are intended to weaken Hezbollah, the Shiite organization that is backed by Iran. The U.S. has also taken part in clandestine operations aimed at Iran and its ally Syria. A by-product of these activities has been the bolstering of Sunni extremist groups that espouse a militant vision of Islam and are hostile to America and sympathetic to Al Qaeda.

One contradictory aspect of the new strategy is that, in Iraq, most of the insurgent violence directed at the American military has come from Sunni forces, and not from Shiites.

The U.S. continues to intervene in Syria in a way which prevents the Syrian state from achieving a decisive victory against the various militant groups it is fighting – some of which the U.S. itself admits are terrorists – while at the same time targeting some of these same militant groups themselves, thereby preventing either side of the conflict from coming out on top. Indeed, as we have learned, the CIA and the Pentagon have even been backing opposing militant groups that are fighting each other! The result is a drawn-out war which threatens to leave Syria in chaos and ruins for the foreseeable future.

This would seem to be an insane course of action for the U.S. to take, and indeed it is, but there is method to the madness. The U.S. appears to be intentionally spreading chaos throughout strategic portions of the world; leaving virtually no independent state standing to protect their resources, especially oil, from Western exploitation. And, this goal is being achieved with resounding success, while also achieving the subsidiary goal of enriching the behemoth industrial-military complex.

Jose Marti once said, “there are two kinds of people in the world: those who love and create, and those who hate and destroy.” There is no doubt that the U.S. has proven itself to be of the latter kind; indeed, the very nature of U.S. foreign policy is destruction. Given this, it is at best foolish and naïve for people of any political stripe, but particularly self-defined leftists, to put any stock in the notion that the U.S. is acting in the defense of human rights, democracy or any such lofty goals in intervening militarily abroad.

There is only one proper goal, then, of people of good will – to oppose U.S. military intervention with every fiber of our being.

Poland: PiS government beats retreat on antiabortion law

Clara Weiss

In the face of overwhelming popular opposition, Poland’s right-wing government of the Law and Justice Party (PiS) has been forced to retreat on a proposed bill banning abortions. While acknowledging its growing weakness, the government is preparing for more fundamental attacks on the living standards of the working class and an escalation of the military build-up against Russia.

Following Monday protests by tens of thousands of people in about 90 Polish cities against the antiabortion bill, as well as public condemnations of the legislation by EU officials, the PiS government initiated a hasty review of the bill in two parliamentary commissions on Wednesday. The Polish Sejm’s (parliament) Human Rights commission had been tasked with reviewing the law after a vote in the Sejm in favor of the bill in late September. After all-night sessions and heated debates, both commissions, with the supporting votes of PiS delegates, recommended rejecting the bill, which the Sejm did on Thursday with an overwhelming majority of 358 votes.

The bill was introduced by the far-right Catholic organization, Ordo Iuris, and would have provided for a total ban on abortion, including for minors and victims of sexual assault, as well as prison terms for women and doctors involved in abortions. Polls showed that an overwhelming majority of the population opposed the bill, with only 14 percent in favor of it. The protests on Monday drew support largely from layers of the middle class and were advertised by the liberal opposition.

When asked why PiS had changed its position on the bill so dramatically within just a few days, Jarosław Kaczyński, the head of the party, declared in the Sejm: “In light of the situation in society we find that the bill will lead to results that are opposed to the goals of those who proposed it.”

The liberal opposition’s media outlets celebrated the retreat by PiS as a “major victory” (Gazeta Wyborcza). From the standpoint of the interests of the working class, this is nonsense and window dressing. First, PiS is still planning to propose another bill to further curtail the right to abortion. Second, either way there exists no right to abortion in Poland. The current law, which is being defended by the liberal opposition, allows for abortions only in the most extreme cases (incest, sexual assault or serious malformation of the fetus), forcing hundreds of thousands of women every year to abort illegally in Poland or seek abortions in other countries.

From the very beginning, the liberal opposition did everything it could to limit the protests against the antiabortion law to gender issues, deliberately diverting them from the larger political questions involved, and trying to prevent a mobilization of the working class against the government. At the same time, the opposition never went further than demanding the maintenance of the current, reactionary law.

The main reason for the retreat by PiS was fear of a broader movement by the working class. Approval ratings for the ruling party recently dropped to just 29 percent, while recent weeks have seen increasing protests and strikes in the working class, including by auto and medical workers.

On the basis of its rejection of the proposed abortion bill, the government is now seeking to appeal to the liberal opposition and the layers of the upper middle class for which it speaks in order to prepare more drastic attacks on the living standards of the working class and to push ahead with the military buildup against Russia. This appeal was well understood by the opposition, which shares the government’s fear of the working class.

Last week, Prime Minister Beata Szydło dismissed Finance Minister Paweł Szałamacha. The week before, the head of the Polish treasury was dismissed. The functions of both the finance ministry and the treasury are now to be handed over to Mateusz Morawiecki, a former banker and close confident of the head of PiS, Kaczyński. Under his supervision, a new “super-ministry” will be created whose immediate task will be to push through a restructuring of the Polish economy and a reform of the health care system.

In particular, the PiS government wants to bring important branches of industry under greater control of the state in order to supervise a rapid militarization of the economy. Thus, the PiS has announced the building of several new state-owned factories in various Polish cities that will produce armaments for the Polish army, which is undergoing its greatest buildup since 1989. Morawiecki has come forward with proposals to expand the defense industry and make this the heart of a so-called “reindustrialization”.

Jarosław Kaczyński reemphasized the government’s priorities in a speech that he gave Wednesday for the inauguration of the academic year at the Military Institute of Medicine. He said: “We are now in an extraordinary situation – both the armed forces and the heath care system have to change and are changing.” He added that the armed forces were now “necessary to Poland as perhaps never before in the previous decades.” While little to no concrete information about the planned health care reform has been released to the public, Kaczyński hinted in his speech that the influence over the health care system of the Military Institute, which is subordinate to the Defense Ministry and supervises numerous hospitals, and the military in general will be expanded.

The Polish health care system ranks among the very worst in Europe. According to the Euro Health Consumer Index, which evaluates the patient friendliness of health care systems, Poland placed 34 out of 35 European countries. The country suffers from a massive shortage of doctors with only 224 doctors per 100,000 inhabitants. Polls show that 75 percent of the population has a “very negative” view of the health care system. Among the OECD countries, Poland has the lowest investments in the health care system. In 2014, it spent only 6.8 per cent of its GDP on health care, far below the OECD average of 9.3 percent.

Due to extremely poor working conditions, four out five medical students indicate they want to go abroad for work. Last week, thousands of medical workers went on strike for higher wages.

The virtual destruction of the Polish health care system is the result of the combined efforts of all the bourgeois parties that have held power since 1989, including the liberal opposition party PO and the so-called social democratic party PSL. Whatever their tactical differences over aspects of foreign and domestic policy, there is a consensus about the necessity to rapidly militarize Polish society for a war with Russia and to make the working class pay for it.

US Fortune 500 firms use tax havens to avoid $717.8 billion in taxes

Barry Grey

Only three days after the New York Times exposed how Donald Trump claimed paper losses of $916 million in 1995, which he could use to avoid paying any federal income tax over the ensuing 18 years, a new study was published showing that Trump’s legally sanctioned tax dodge is dwarfed by the standard practices of major US multinational corporations.

“Offshore Shell Games 2016: The Use of Offshore tax Havens by Fortune 500 Companies” was released Tuesday by three organizations—the US PIRG (Public Interest Research Group) Education Fund, Citizens for Tax Justice, and the Institute on Taxation and Economic Policy. The report, based on an analysis of 2015 corporate tax filings, revealed that 73 percent of Fortune 500 companies “maintained subsidiaries in offshore tax havens,” which enabled them to avoid paying a total of $717.8 billion in US corporate income taxes.

How pervasive is legally and politically protected corporate tax avoidance in the US capitalist system? The amount of money the biggest US multinationals withhold by booking profits to subsidiaries—often paper companies—nominally located in offshore tax havens is some $270 billion more than the federal budget deficit for 2015, $428 billion.

$717.8 billion is nearly seven times the amount the US government spends on education each year. It is nearly 22 times the 2015 budget of the US Department of Housing and Urban Development. The Health and Human Services budget is barely 3 percent of the taxes not paid by means of offshore tax havens.

A separate report by USA Today found that 27 companies in the Fortune 500 paid no federal tax for 2015, including General Motors, American Airlines, United-Continental Airlines and Xerox.

The same politicians, media pundits and government bureaucrats who repeat ad nauseam that “there is no money” for jobs, schools, health care, pensions or housing, oversee the de facto corporate theft of hundreds of billions in taxes.

According to the study, Fortune 500 companies are holding nearly $2.5 trillion in accumulated profits offshore for tax purposes. US tax laws, essentially written by corporate lawyers and lobbyists and rubber-stamped by the bribed lawmakers of both big-business parties, allow American-based multinationals to pay no taxes on these profits until they repatriate them back to the US. In the meantime, the corporations, which in many cases actually generated the profits either within the US or in places far distant from the countries where their tax haven subsidiaries are located, are able to deploy these profits to raise cash, invest, speculate, etc.

Of the Fortune 500 companies, 367 collectively maintain 10,366 tax haven subsidiaries. Of these, the 30 companies with the most money booked offshore collectively hold nearly $1.65 trillion overseas. They operate 2,509 tax haven subsidiaries.

The study notes that only 58 Fortune 500 companies disclose how much they would expect to pay in US taxes if their profits booked to offshore subsidiaries for tax purposes were reported as US profits. Just these firms would owe a total of $212 billion in additional federal taxes, equal to the entire state budgets of California, Virginia and Indiana combined.

The average tax rate these 58 firms pay to other countries on these profits is a mere 6.2 percent, making it clear that most of this income is booked to subsidiaries in countries that exact little or no corporate taxes.

The report concludes that US multinationals withhold $100 billion in federal corporate taxes every year by means of offshore tax havens.

What is involved here is legally sanctioned fraud facilitated by the regulatory agencies, such as the Securities and Exchange Commission and the Federal Reserve, whose supposed function is to police big business. The corruption is open and brazen.

As the study puts it: “Corporate lobbyists and their congressional allies have riddled the US tax code with loopholes and exceptions that enable tax attorneys and corporate accountants to book US-earned profits to subsidiaries located in offshore tax haven countries with minimal or no taxes… often, a company’s operational presence in a tax haven may be nothing more than a mailbox.”

The report cites a 2008 Congressional Research Service report noting that American multinational companies “collectively reported 43 percent of their foreign earnings in five small tax haven countries: Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland.”

It adds that the profits American multinationals claim to earn in Bermuda and the Cayman Islands, countries with no corporate tax, total 1,884 percent and 1,313 percent, respectively, of these countries’ entire yearly economic output.

By far, the multinational with the biggest hoard of offshore profit holdings is Apple, which reports $214.9 billion. It would owe $65.4 billion in taxes if that money were to be brought back to the US. Other top offshore tax avoiders are Pfizer, at $193.6 billion; Microsoft, at $124 billion; General Electric ($104 billion) and IBM ($68 billion).

Goldman Sachs, which officially holds $28.6 billion overseas, reports having 987 subsidiaries in offshore tax havens. The study cites Goldman’s own web site as reporting that 537 of these are in Bermuda, despite not operating a single legitimate office in that country.

The $2.5 trillion that Fortune 500 companies report holding in offshore subsidiaries today is double the level reported by companies in 2009.

IMF warns of record high global debt

Nick Beams

Eight years after the eruption of the global financial crisis, the conditions are being created for another meltdown of even bigger proportions, amid rising geo-political and economic tensions between the major capitalist powers.

This is the implication of three reports issued by the International Monetary Fund in preparation for its annual meeting, which begins in Washington today. The World Economic Outlook reported lower growth in all the advanced economies, underscoring the lack of a genuine recovery in the global economy, while two financial reports pointed to mounting instability resulting from the injection by central banks of trillions of dollars into the world financial system.

Taken together, the reports point to the underlying economic contradictions that are fueling a series of crises. These include slowing world trade and rising protectionist measures, the row between the US and the European Union over tax payments by Apple, the move by the US Justice Department to impose a $14 billion penalty on Deutsche Bank, the breakdown in talks on the US-sponsored Transatlantic Trade and Investment Partnership, and accusations from politicians in Berlin that the US is waging “economic warfare.”

The increasing instability of the financial system was highlighted in the IMF’s twice-yearly Fiscal Monitor report issued on Wednesday. It found that debt in the nonfinancial sector of the world economy had doubled in nominal terms since the turn of the century, reaching $152 trillion last year and continuing to rise.

Current debt levels are 225 percent of global gross domestic product (GDP), rising from 200 percent in 2002. The IMF said that while there was no consensus on how much debt was too much, current debt levels, of which two-thirds is privately held, were at a record high.

There was a need for deleveraging, but the current low-growth environment was making “the adjustment very difficult, setting the stage for a vicious feedback loop in which lower growth hampers deleveraging and the debt overhang exacerbates the slowdown.”

The report said the debt overhang problem, characterised as a situation in which the borrower’s debt service liability exceeds its future repayment capacity, “resides squarely within advanced economies’ private sector.”

While the IMF did not make the point, its analysis exposes the claim that too much government spending is the cause of mounting financial problems. According to the Fiscal Monitor report, the easing of restrictions on credit meant that non-financial private-sector debt in the major economies increased by 35 percent of GDP in the years leading up to the global financial crisis.

Significantly, there was a rapid rise in household debt in this period. The report did not point to the reasons, but two major factors undoubtedly were the low level of wage increases, forcing increased borrowing, and the surge in house prices in a number of countries, itself a product of credit expansion. The IMF noted that in some countries—Australia, Canada and Singapore—private-sector debt had continued to accumulate at a fast pace.

The report found that public debt, which makes up one-third of the total, had risen from 70 percent of global GDP to 85 percent. But almost half of this increase was a result of low nominal growth. In other words, far from the rise in government debt being the result of “profligate” spending on health, pensions and social services—the mantra of those demanding austerity—its expansion is rooted in the ongoing stagnation following the 2008 financial crisis.

A second financial report, Global Financial Stability, drew out the growing risks to the financial system. It said that while short-term risks had abated since the previous report in April, “the medium-term risks are building.” The continued slowdown in global growth had prompted financial markets to expect a continued period of low inflation, low interest rates and “an even longer delay in normalizing monetary policy.”

It warned, however, that some monetary policies, such as negative interest rates, were “reaching the limits of their effectiveness, and the medium-term side effects of low rates are rising for banks and other financial institutions.”

Pension funds and insurance companies, which are dependent for their financing on investment in long-term government bonds, were particularly adversely affected, with their solvency “threatened by a prolonged period of low interest rates.”

Financial institutions as a whole in the advanced economies faced a “number of cyclical and structural challenges and need to adapt to the new era of low growth and low interest rates.” If these challenges were left unaddressed, it “could undermine financial soundness.”

These problems go to the very heart of the capitalist financial system—the banks. The report stated that weak profitability could “erode banks’ buffers and undermine their ability to support growth.” Even if there were a cyclical recovery in the economy, this would not resolve the problems of low profitability. “Over 25 percent of banks in advanced economies (about $11.7 trillion in assets) would remain weak and face significant structural challenges,” with the problems concentrated in the European and Japanese banking sector.

“In the euro area,” the report stated, “excessive nonperforming loans and structural drags on profitability require urgent and comprehensive action.” Reducing nonperforming loans and addressing deficiencies in capital were a priority.

The mounting financial problems, while concentrated in the advanced economies, are not confined to them. The report found that in emerging market economies, around 11 percent of corporate debt, over $400 billion, was held by firms with “weak repayment capacity.”

High debt levels and excess capacity made it difficult for these companies to “grow out of the problem” which left them “sensitive to downside external or domestic developments,” and if interest rates started to rise and earnings fell, “such a scenario would exhaust bank capital buffers in some emerging markets.”

Another area of concern was China, where “continued rapid credit growth… and expanding shadow banking products pose mounting risks to financial stability.” The rapidly growing financial system “is becoming increasingly leveraged and interconnected, and a variety of innovative vehicles and products are adding to the complexity.” Corporate debt at risk remained high and “underlying risks from non-loan credit exposures add to these challenges.”

The three reports point to the deepening contradictions of the global capitalist system. The IMF has insisted that in the absence of any cyclical rise of the economy, monetary policy alone cannot bring about a recovery, and government infrastructure and other spending is necessary to provide a boost.

But such spending would increase debt and would depend on interest rates remaining low. Ultra-low interest rates, however, are increasingly undermining the stability of banks and other financial institutions, creating the conditions for another financial crisis, which will further inflame the already high level of geo-political and economic conflict.