Anxiety in Australian elite over Trump’s policies

Mike Head

There is nervousness in Australian ruling circles that Donald Trump’s “America first” protectionism will trigger trade wars that could have disastrous consequences for the country’s fragile, debt-laden and commodity export-dependent economy.

In the name of restoring “Americans jobs,” Trump has threatened to impose tariffs of up to 45 percent on China and possibly Japan and South Korea. Between them, these three countries account for 60 percent of exports from Australia—some $158 billion out of $266 billion in 2014.

Any such tariffs could provoke retaliation, leading to all-out trade wars that are likely to crash the global economy, further devastating Australian capitalism, which also relies heavily on inflows of foreign investment and borrowings.

For public consumption, the Turnbull government and the corporate media are playing down the implications of Trump’s threats. They are trying to create illusions that Trump will modify his policies once he takes office.

Deloitte Access Economics spokesman Chris Richardson said Trump could hurt Australia’s economy via trade. But he said people should not panic. “The chances are that policies will change, but what will change will be slower and smaller than you’ve heard in the campaign,” he said.

Other commentators, usually cited in media business columns, were more frank. University of New South Wales economics fellow Tim Harcourt said: “Trump could be the most isolationist, protectionist president since Herbert Hoover in the ‘20s, so it’s actually quite alarming for the world.”

AMP Capital chief economist Shane Oliver said investors are particularly worried about Trump’s protectionist trade policies triggering “a global trade war.” In a report, he wrote: “Australian shares would be particularly vulnerable to this given our high trade exposure.”

Former Australian Foreign Minister Bob Carr said any tension with China would have a knock-on affect. “I think the economic shock to Australia would be big. The damage he [Trump] would do by a trade war with China would be immeasurable.”

One attempt to measure the impact was made by Australian National University economist Professor Warwick McKibbin, a former board member of the Reserve Bank of Australia. In order to try to model the fallout from a 40 percent increase in tariffs between the US and China and other major economies, he based himself on a working paper he had co-written for the World Bank.

McKibbin estimated that Australia would suffer a 5.6 percent reversal in economic growth in the first year alone—more than enough to inflict a recession. “We’d get hit by more than the US because we’re a lot more exposed to trade,” he told the Australian.

He said his forecasts assumed a trade war on all fronts and a more realistic scenario was a trade war on manufacturing, but Australia was also exposed to a Trump administration’s impact on rising interest rates. Australia’s banks depend on borrowing on world financial markets for almost half their funds.

Fairfax Media economics editor Peter Martin said even small cuts in Chinese demand for Australian commodities would send the federal budget—already in deep deficit—“into conniptions” (fits of hysterical excitement or anger). He pointed out that the US is China’s biggest market, taking 18 percent of everything it sells.

If a Trump government imposed tariffs on China, Martin warned, Beijing “would have to retaliate (somehow), raising the prospect of a trade war that would damage both China and the US. War gaming by the respected Peterson Institute says it could push the US into recession by 2019. The last time that happened, during the global financial crisis, Australia avoided recession with help from China. We mightn’t get it a second time.”

Following the 2008 breakdown, the Australian economy did not crash only because the Chinese regime produced massive debt-driven stimulus packages that temporarily drove up demand for Australian-exported coal and iron ore, igniting a mining boom. That made the Australian economy more acutely dependent on China’s growth.

Such is the concern in Australia’s establishment that Philip Lowe, the recently-appointed governor of the Reserve Bank of Australia, last month cast aside the central bank’s traditionally cautious language.

Responding to questions from journalists after his first public speech as governor, Lowe described the prospect of a Trump presidency as less than “benign.” He added: “We don’t have a Trump plan. What we do is have a generic response plan to a whole range of shocks.”

Answering another question, Lowe said: “If I go through the list of things that make me worried about the global economy … right at the top of that list is the shift towards protectionism.”

The Australian economy’s vulnerability was underscored this week. Global credit ratings agency Standard & Poor’s reiterated its warning, first issued after the Turnbull government’s near-defeat in the July 2 election, that Australia would lose its AAA rating within months unless the government proved it could push spending and revenue measures through both houses of parliament.

Craig Michaels, S&P’s head of sovereign ratings, said the government had to demonstrate it could deliver its pledge to eliminate the annual deficit, currently around $40 billion, by 2020–21. He said this date would be more than a decade since the federal government first went into deficit after the 2008 crisis, and eight years after the previous Labor government first vowed to produce a balanced budget for 2012–13.

Michaels said combined consumer, bank and government debt reached around 250 percent of gross domestic product by mid-2014. “What it means is that Australia’s economic prospects are beholden to the ongoing willingness of foreign investors to roll over that debt and to continue to fund what is a structural current account deficit.”

That was fine “provided foreign investors remain comfortable and confident in the Australian growth story.” A sudden collapse or withdrawal of foreign lending was a “low probability scenario” but “that fiscal story” was “starting to break down a little bit now.”

Yesterday’s Australian Financial Review editorial warned: “The credit rating agencies are running out of patience.” It insisted that Prime Minister Malcolm Turnbull’s Liberal-National government had to both inflict austerity measures and “induce” growth, supposedly by cutting the country’s 30 percent company tax rate.

The financial newspaper claimed that this would “encourage companies to invest now.” In reality, company tax rates would only fatten profits, and the dividends paid to the wealthy elite, while the resulting revenue loss would further gut social spending, especially on health, education and welfare.

Statistics on foreign investment released this week highlighted the fragility. They showed a 25 percent fall to $117.9 billion in 2015, down from $156.6 billion in 2014.

There were also more signs of an end to a debt-fuelled residential apartment boom that has partly offset the implosion of the mining sector since 2011. A 3 percent fall in the value of residential construction to $17.6 billion in the September quarter was accompanied by a 10.9 percent slump in non-residential work to $8.3 billion—the biggest quarter-on-quarter fall in 16 years. Engineering construction also slipped, taking total construction down to $46.1 billion, 11 percent less than a year ago.

Incoming Trump administration prepares assault on federal workers

Nick Barrickman

The incoming Trump administration has singled out civilian federal employees for attacks on jobs, employment security and pensions. According to the Washington Post, “President-elect Donald Trump and the Republican-controlled Congress are drawing up plans to take on the government bureaucracy they have long railed against, by eroding job protections and grinding down benefits that federal workers have received for a generation.”

The federal civil service, which consists of over 2.75 million workers, excluding members of the armed forces, the judiciary and elected officials, has come under relentless attack from the political right for decades. Right-wing propaganda depicts federal workers as overpaid and privileged drones in an attempt to divide the working class and divert anger over declining living standards and growing inequality against a section of the working class itself. The aim is to dismantle whatever remains of job protections and benefits that are based on civil service laws and contracts with federal employee unions. This is despite the best efforts of the unions over many years to help impose job cuts and wage and benefit concessions.

In 2012, House Republicans proposed a 10 percent federal workforce reduction as part of their fiscal budget for that year.

According to the Post, the incoming administration will implement “[h]iring freezes, an end to automatic raises, a green light to fire poor performers, a ban on union business on the government’s dime and less generous pensions.” In addition, the Trump White House will seek “guidance” from the Republican governor of Wisconsin, Scott Walker, who in 2011 provoked mass protests at the state capital by shredding public employee rights and imposing sweeping concessions on public workers.

The new administration will also follow the example of Vice President-elect Mike Pence, who, as governor of Indiana, tied state worker pay to performance ratings.

According to Jason Chaffetz, Republican congressman from Utah and chairman of the House Committee on Government Oversight and Reform, the plan to slash federal employee pensions will be modeled on his home state, which recently replaced defined benefit pensions with market-based defined contribution plans such as 401(k)s. The switch from traditional pensions will initially affect newly hired workers, according to press reports.

The assault on federal workers is based on the ten-point “Contract with the American Voter” released by Donald Trump in late October. The statement declared that within its first 100 days in office, the Trump administration would enact “a hiring freeze on all federal employees to reduce the federal workforce through attrition (exempting military, public safety, and public health).”

The Post quotes former House Speaker Newt Gingrich, a member of Trump’s transition team, as saying that Stephen Bannon, Trump’s chief White House strategist, will lead the attack on federal workers. Until signing on as the head of Trump’s presidential campaign last August, Bannon headed the Breitbart News web site, a platform for the fascistic alt-right that regularly rails against the so-called “privileged class” of government workers in Washington.

Contrary to the myth of a ballooning “big government” promoted by the right wing, the US civil service has undergone numerous cutbacks in its workforce under both Republican and Democratic presidents. As a result, the number of federal employees today is consistent with the number employed in the 1960s, despite a near-doubling of the US population since then.

A likely precedent for Trump’s plan to slash workers’ pay and job protections is the 2014 Veterans’ Choice Act, signed into law by President Obama. Passed during the scandal at the Department of Veterans’ Affairs (VA) that year, the law facilitates the firing of VA workers while giving employees less than a week to appeal their dismissal.

Prior to the Veterans’ Choice Act, workers had the option of appealing their dismissal to the Merit Systems Protection Board, established as part of the civil service system to prevent politically motivated firings.

Under a Trump administration, such firings are likely to become the rule. During the presidential campaign, Trump regularly declared that if elected he would shut down government agencies such as the Environmental Protection Agency and the Department of Education. At the same time, Trump is pledging a massive increase in military spending and packing his administration-in-waiting with military figures.

The planned assault on federal workers exposes the cynicism behind repeated statements by Democratic Party leaders—from Obama and incoming Senate Democratic Leader Charles Schumer to Bernie Sanders and Elizabeth Warren—suggesting that Trump may enact measures to improve the lot of workers and pledging their readiness to collaborate with him.

The American Federation of Government Employees (AFGE), the largest federal employee union, has remained silent on Trump’s agenda. On November 9, the day after the election, AFGE President J. David Cox Sr. released a brief press statement declaring, “We ‎will work with the Trump administration on areas of common ground, as we have with every administration for generations.”

Syrian war threatens to escalate as Turkey accuses Damascus of attacking its troops

Jordan Shilton

Turkey’s Prime Minister and armed forces both accused the Syrian regime of Bashar al-Assad Thursday of conducting an airstrike on Turkish troops in the vicinity of al-Bab in the country’s north, resulting in three casualties.

The incident threatens to escalate already sharp tensions between Ankara and Damascus into all-out war, posing the very real risk of direct clashes between the major powers.

Turkish Prime Minister Binali Yildirim warned in comments to Hurriyet that the attack would “not be left unanswered.” Turkish warplanes at the Gaziantep air base were placed on emergency standby.

A direct Turkish attack on Syrian government forces would quickly draw Russia, a key ally of the Assad regime, even more deeply into the conflict and Turkey, as a member of NATO, could call on the alliance for support under Article 5, which obliges alliance members to come to the defense of a NATO state under attack. Such a move would mean war between NATO and Russia.

Turkish troops launched Operation Euphrates Shield in northern Syria in late August, in alliance with opposition militias organized in the Free Syrian Army (FSA) with the aim of preventing the establishment of a Kurdish enclave on the Turkish border by the People’s Protection Units (YPG) fighters, which are aligned with the Kurdish Democratic Unity Party (PYD). The Syrian government condemned the intervention as a violation of its territorial sovereignty.

Ankara alleged the attack occurred as its troops sought to push into al-Bab, an Islamic State-held town it is determined to capture before Kurdish forces. Gaining control of al-Bab would enable Turkey to have a major say in the offensive to retake the ISIS capital of Raqqa and represent an important step in blocking attempts by YPG fighters to link two Kurdish-held areas in northern Syria.

The Syrian government also recently indicated that it might be preparing to launch an offensive on al-Bab, raising the prospect of a multi-front battle over the town. Reports said pro-government forces had been seen gathering to the south.

Speaking to Voice of America, an anonymous Western diplomat stated that the alleged Syrian government attack runs the risk of causing a “potentially catastrophic escalation of the war.”

While it is entirely possible that Syrian aircraft did launch the attack, there is strong evidence to suggest that Turkey is seeking to pin the blame on Damascus to legitimize its ongoing incursion. The Syrian Observatory for Human Rights, an opposition-aligned organization that can hardly be accused of having a brief for the Assad government, reported that the Turkish casualties were in fact caused by an ISIS suicide bombing on Wednesday. For its part, the Turkish government imposed a gag order on media reporting of the attack. The Syrian government has not commented on the incident and there has been no independent verification of Ankara’s claims.

The US response to the incident was also muted, indicating the ongoing tensions between Washington and Ankara over policy in Syria. Last week, the Pentagon announced it was withdrawing its Special Forces that had been embedded in the Euphrates Shield mission since its launch in August. A Pentagon spokesman told a Turkish newspaper on Monday that the Turkish and FSA offensive on al-Bab was not being conducted as part of the international coalition’s efforts to retake Raqqa.

The United States, which fomented the Syrian war in 2011 with the aim of toppling Assad, bears chief responsibility for the more than 300,000 deaths that have occurred since and the deepening rivalries in the region. While initially endorsing Turkey’s Euphrates Shield mission, it continues to depend heavily on the YPG, which it has armed and supported with up to 500 US Special Forces. Indicating the major combat role assumed by these troops in the push against Raqqa, the first US casualty in the fighting was announced yesterday after a US Special Forces soldier was killed by an improvised explosive device planted by ISIS.

The YPG, which together with a number of smaller militias is organized in the Syrian Democratic Forces (SDF), announced earlier this month the launch of operations to retake Raqqa. But it has been engaged in intensified clashes over the past week with Turkish-backed FSA forces. Turkey has launched a series of airstrikes against YPG fighters trying to reach al-Bab from nearby Manbij. Turkish troops have also taken the lead in the attack on al-Bab, rather than relying on their FSA allies as in previous battles. Turkey views the YPG and PYD as an extension of the banned Kurdish separatist PKK, and has vowed to press on and retake Manbij from the SDF after capturing al-Bab from ISIS.

A report on the Stratfor website, which has close ties to US intelligence, noted earlier this week that Washington was becoming concerned that Turkish clashes with the YPG could “undermine the Raqqa effort altogether.” It went on to raise the prospect of clashes breaking out between the Turkish-backed FSA and Syrian government troops, which are backed by Iranian forces and Russia, if Turkey’s advance into Aleppo province proceeds.

As the World Socialist Web Site previously noted, it is clear that the US is seeking to create new “facts on the ground” by escalating the conflict prior to the assumption of power by President-elect Donald Trump, who is yet to make his intentions clear in Syria but has indicated the possibility of improving ties with Russia. Earlier this week, it emerged that portable antiaircraft missiles, so-called manpads, had been supplied to the US-backed Ansar al-Islam Front, an extremist Islamist militia with ties to Syria’s al-Qaida affiliate.

These developments underscore the reckless character of US imperialism’s drive to establish its unchallenged domination over the energy-rich Middle East. Over the course of more than two decades of virtually uninterrupted war, it has brought the region to a point where any number of flashpoints in the Syrian civil war, not to mention in Iraq where sectarian conflicts over control of Mosul are deepening, could trigger a wider war with catastrophic consequences for the population of the region and beyond.

On Wednesday, State Department spokesman Mark Toner urged Washington’s European allies to block Russian oil tankers from using their ports on their way to Syria to supply fuel for Russian airstrikes. The same day, the European Union unveiled a plan to investigate Russia for an alleged breach of EU sanctions against Syria because of its use of a Cypriot port in October while transporting jet fuel to the Assad regime.

Russian Defense Ministry spokesman Major General Igor Konashenkov retaliated angrily Thursday, accusing the US of inciting other states to block Russian counterterrorist operations in Syria. Konashenkov stated that the US had been hindering Russian operations for months “through dragging out any talks, failures to meet obligations to separate the opposition from terrorists and constant promises to some day provide information on the militants. Now the State Department “has openly called on other countries to obstruct our Air Force in fighting international terrorism in Syria.”

In intervening militarily to support the Assad regime, its only Arab ally in the Middle East, Russia is only increasing the likelihood of a catastrophic military clash between the major powers.

Moscow has continued its support for the offensive by the Syrian army against civilian areas of eastern Aleppo to dislodge Jihadi rebels, dominated by the al-Qaida-affiliated al-Nusra Front. Since recommencing direct attacks on the city on November 15, Syrian and Russian airstrikes, including missile attacks launched from Russian aircraft carriers in the Mediterranean, have killed over 140 civilians. Dozens have also been killed and wounded in government-held areas by indiscriminate shelling by the Islamists.

Australian state government imprisons teenagers in adult jail

Eric Ludlow

The state Labor government in Victoria has seized on recent clashes at a juvenile detention facility in Melbourne to imprison children in a maximum-security adult prison. This repressive response to a so-called riot in the juvenile facility is the latest example of the brutality being inflicted on teenage prisoners, following revelations of sickening abuses in the Northern Territory and Queensland.

Up to 40 teenagers, accused of “rioting” on November 12 at the “Youth Justice Centre” in the suburb of Parkville, have been moved to the top-security Barwon Prison. The Parkville facility holds 15–18-year-old males who have been either sentenced to imprisonment or are awaiting trial, denied bail.

There have been repeated protests by teenage prisoners over the past two years, sparking clashes between detainees and staff at the overcrowded and dilapidated Parkville facility, and other Victorian juvenile jails. In the latest incident, according to unsubstantiated media reports, inmates set off fire alarms, barricaded themselves in inaccessible areas, and climbed onto rooftops.

Premier Daniel Andrews said he would make “no apology” for shifting boys to Barwon. He demonised the teenagers, declaring: “Violent, repeat offenders who have been involved in completely unacceptable conduct are going to adult prison.”

The detention of dozens of boys in an adult jail is supposedly a temporary measure, while “fortification works” are undertaken at the Parkville institution. The Andrews government, however, attempted to send seven alleged “ring leaders”—five 16-year-olds and two 17-year-olds—to the adult prison permanently.

The state’s Youth Parole Board blocked that permanent move as a violation of human rights legislation. Nevertheless, Families and Justice Minister Jenny Mikakos said the government was determined to “send a very clear message that this disgraceful behaviour won’t be tolerated.”

Such statements indicate that the Labor government is preparing for further punitive measures against juvenile prisoners, a high proportion of whom have complex trauma, post-traumatic stress, and other psychological issues caused by unemployment, social dislocation, family breakdown, and alcohol and drug addiction.

More broadly, behind the tensions in the juvenile jails is the fact that working-class youth face deteriorating economic and social conditions. According to a recent report, young people in Australia are the first generation since World War II to face lower living standards than their parents.

Working-class youth confront high unemployment and under-employment, insecure part-time and casual work, heavy housing costs, huge debts and soaring tuition fees. Even on understated official figures, unemployment is around 28.7 percent for those 15–19 years old. In some areas, joblessness has reached depression-era levels of over 40 percent.

The only answer of the Labor government, and the ruling class as a whole, is police-state violence. Past pretences of tackling the underlying social problems, or even of providing treatment and rehabilitation programs for detainees, have been largely dispensed with.

The government’s vicious response was backed by the trade unions. Community and Public Sector Union state secretary Karen Batt said the provisional detention of young people in adult prisons was a “strong” and “smart” response.

The entire political and media establishment in Victoria has waged a sustained and reactionary “law and order” campaign around the Parkville unrest. The commentary has tried to bury evidence of the appalling conditions inside the Parkville centre that likely sparked the supposed rioting.

In 2010, an Ombudsman’s report documented serious overcrowding, with the number of detainees in some wings of the facility being nearly twice the number of beds. Electrical hazards were also detailed, with at least two instances of staff members experiencing an electric shock. The report also exposed unhygienic facilities, unguarded potential suicide by hanging points, unsafe grounds and poor maintenance, among many other issues.

State Liberal Party opposition leader Matthew Guy declared that the government was not doing enough to curb a “violent crime wave” sweeping Victoria. In reality, Victorian Crime Statistics Agency data for the year ending June 30, 2016 showed a 4 percent decrease in the number of people aged under 25 convicted of committing a crime.

Lurid claims of a youth crime “tsunami” have been promoted by the media, especially the Murdoch outlets, such as the tabloid Herald Sun. The newspaper has spearheaded a racist campaign to link the unrest to immigrant and refugee youth, especially from Sudan. Without providing any evidence, it declared that leading “rioters” of Sudanese and other African backgrounds in the Parkville facility were connected with the so-called Apex gang.

A hysterical campaign against this alleged gang has been conducted since March, when a group of young people reportedly engaged in some petty thefts and vandalism in central Melbourne during an annual festival. It remains unclear whether the “Apex gang” actually exists.

The dispatch of teenagers to adult jails in Victoria is part of a wider pattern of violence directed against working-class youth across Australia, at the behest of Labor and Liberal-National governments alike. In both the Northern Territory and Queensland, governments have convened official inquiries to seek to whitewash, and quell public outcries over, exposure of abuses such as assaults, imposition of solitary confinement and use of hooded restraints (“spit hoods”) in juvenile jails.

The purpose of the “law and order” campaign is to create the climate for even more repressive laws, targeting the legal and democratic rights of young people and the working class as a whole. The phenomenon is an international one, with governments moving toward authoritarian forms of rule in order to push through corporate austerity agendas.

Queen to be given £370 million to refurbish Buckingham Palace

Richard Tyler 

Without even cursory public scrutiny, let alone debate, an unelected three-person committee has agreed to hand over nearly £370 million of additional public money to the queen.

The Royal Trustees—Prime Minister Theresa May, Chancellor of the Exchequer Phillip Hammond and The Keeper of the Privy Purse, Sir Alan Reid—decided the sum was necessary to renovate Buckingham Palace, and other royal properties.

Enough to build at least 2,500 average homes that could house 10,000 people, the £370 million will be spent on renewing wiring, plumbing and heating in her London residence.

To ensure that Her Majesty Elizabeth the Second, by the Grace of God, of the United Kingdom of Great Britain and Northern Ireland, and of Her other Realms and Territories, Queen, Head of the Commonwealth, Defender of the Faith (to list just a few of her more than two dozen official titles) does not freeze, the palace’s 33-year-old boilers, 100 miles of electric cabling and 20 miles of lead piping will be replaced, as well as extensive redecoration carried out.

The money is to be paid over in the form of an additional rebate from the profits derived from the Crown Estate, which flow to the Exchequer. Under the Sovereign Grant, which replaced the previous Civil List system, the queen is awarded a sum of money each year from public funds to cover her official expenditures, including upkeep of the various royal residences, staffing, travel and state visits, public engagements, and official entertainment, including a payment of 15 percent of the profits from the Crown Estate. The Crown Estate is worth a staggering £11.5 billion. It includes a large number of properties in central London, and controls 1,960,000 acres of agricultural land and forest in the UK and more than half of the country’s foreshore.

In 2012-13, the Sovereign Grant amounted to some £31 million, rising to £40.1 million in 2015-16, an almost 30 percent increase. By means of a Statutory Instrument, a parliamentary order tabled by a minister that requires no debate, this is being further increased by 66 percent from 2017, to fund the remedial works over the following 10 years.

The Sovereign Grant is just a small fraction of the queen’s wealth and overall income. The queen also receives annual net profits from the Duchy of Lancaster’s Estate, which next April will be £17.8 million. In 2002, she inherited her mother's estate, thought to have been worth £70 million (£103 million today).

The total wealth of the monarch is not known but last year’s Sunday TimesRich List (which does not have access to wealth held in bank accounts) estimated the queen’s private wealth at £340 million, making her the UK’s 302nd richest person. Sandringham House, on 20,000 acres of land, and Balmoral Castle, on an estate of approximately 50,000 acres, are privately owned by the queen.

The decision to fund the renovation work is seen as a strategic issue for the British ruling class, under conditions where the UK is set to leave the European Union. Speaking on “Peston on Sunday,” Chancellor Philip Hammond defended the expenditure, saying the royal residence was “very important in supporting Britain’s soft power projection across the world.”

News of the proposed payment led to an online petition addressed to the chancellor, demanding that “the Crown and its estates should be made to fund its own renovations.” Launched the following day, November 19, it had recorded close to 140,000 signatures as of this writing. This would make the petition eligible for submission to a non-binding debate in parliament.

Under conditions in which most workers have faced years of austerity and falling or stagnant wages, the comments of those signing the petition expressed bitter anger and disgust:

“The richest woman in the country should not be given, or take handouts from the government whilst there’s kids living in poverty, pensioners freezing to death and the country is on its knees. Remember the Romanovs?”

“In a time of austerity and great struggle for many families, this is unacceptable.”

“We have 1 in 4 children living in absolute poverty and families relying on foodbanks and to spend this amount of taxpayers’ money to keep them in the lap of luxury is abhorrent and it should be the joe public who decide who pays for it!”

“This money should be spent on council housing and providing homes for the people sleeping on our streets.”

While in London, the queen can enjoy her 775 rooms, including 19 state rooms, 52 royal and guest bedrooms, 92 offices and 78 bathrooms, but thousands have no home at all to call their own.

In the period, July to September 2016, there were 2,638 people recorded sleeping rough on the streets of London. Of these, some 30 percent were in the London Borough of Westminster, in which Buckingham Palace lies. Westminster has topped the national list for rough sleepers for the last six years.

There has been a doubling of those sleeping rough in England since 2010, with the rise in London exceeding that in all other regions.

Britain faces a mounting housing crisis. According to the National Housing Federation, 974,000 homes were needed between 2011 and 2014, but data from 326 councils showed only 457,490 were built. This follows decades in which virtually no new state-funded housing has been built. Starting under Conservative Prime Minister Margaret Thatcher in the 1980s, the “right to buy” scheme has seen the selling off of some two million local authority-owned houses without any similar replacements being funded from the proceeds.

The housing crisis is expressed most acutely in the capital. A research paper from the University of the West of England found that the number of houses managed by London’s councils had shrunk from 840,000 in 1984 to just over 500,000 by the end of the century.

According to a report commissioned by the Santander bank, the number of UK homes worth more than £1 million is “set to triple by 2030”. In London, one in four homes will cost in excess of £1 million by 2030. Private homes in London are already far beyond the reach of most workers, with prices currently 11.5 times average incomes. This will soar to 16.5 times by 2030. The cost of a house at the bottom of the price range will be 17 times the income of those in the lowest quartile of earners by 2030.

At the same time, private landlords and those running bed and breakfast establishments have pocketed £3.5 billion over the last five years in money spent by local councils on temporary accommodation, enough to build 23,600 houses.

The Labour Party shares responsibility with the Tories for the current housing crisis. Following the election of Tony Blair as prime minister in 1997, his government enthusiastically pushed forward the right to buy scheme.

Asked about the fate of the palace, Labour’s Shadow Chancellor, John McDonnell, declared that no government would allow the palace to fall into disrepair. “It’s a national monument ... national heritage. It’s going to be treated that way, in the same way as the House of Commons. When you have these old buildings they have to be looked after,” he told LBC radio.

When asked if the queen should pay for the work, McDonnell replied with due deference, “She may well consider that. I am a republican, but when it comes to decisions like that I think they are left to her.”

Thus speaks the voice of Her Majesty’s Loyal Opposition. Like his party leader Jeremy Corbyn, the “republican” McDonnell never misses an opportunity to affirm his loyalty to the capitalist state apparatus—including to the queen, the living embodiment of imperialist rule and hereditary privilege.

UK government Autumn Statement: Economic crisis accelerates after Brexit vote

Robert Stevens

The depth of Britain’s economic crisis, accelerated by the referendum vote to leave the European Union (EU), was revealed in the Conservative government’s Autumn Statement on the economy yesterday.

Philip Hammond, who replaced George Osborne as Chancellor of the Exchequer in Theresa May’s first cabinet after she became prime minister following June’s referendum, issued the statement pointing to the deepening financial catastrophe facing British capital.

Despite more than £100 billion in austerity cuts carried out in the last six years by successive Tory governments, Hammond said that the UK’s deficit would not be in surplus by 2020, as per previous projections. Instead, the new target would be "as early as possible" afterwards. Borrowing to meet the deficit is set to rise sharply. Hammond said Office for Budget Responsibility (OBR) forecasts showed borrowing would be £68.2 billion this year and £59 billion next, compared with the March forecast of £55.5 billion and £38.8 billion.

Any potential growth during the current parliament would be 2.4 percentage points lower than forecast in March. Overall government borrowing is forecast to be £122 billion by 2020/21—much higher than the than the already dire projection of £100 billion made in March. The national debt is expected to reach 90 percent of GDP next year.

There would be no let-up in austerity from a government that, as revealed by the Institute for Fiscal Studies (IFS), has carried out an additional £12 billion in welfare cuts in the 18 months since the last general election. No cuts in place will be reversed, with Hammond saying the budget “re-states our commitment to living within our means.”

The Resolution Foundation think tank noted, “Despite increasing borrowing elsewhere, the chancellor has left the big welfare cuts intact and chosen not to provide significant support for the just managing families that Theresa May has rightly [!] said she is focused on. The double whammy of lower earnings and benefit cuts mean that the poorest third of households are now set to face a parliament of falling living standards.”

Workers whose living standards have already been devastated face more years of brutal austerity. Research published this week by the Policy in Practice consultancy reveals that working families face a further £2,500 a year cut in income by 2020. The survey, based on a study of 187,000 households, found that welfare cuts, including a four-year benefit rate freeze, coupled with rising rents and higher inflation, would see low-income working families lose an additional £48.90 a week.

Aside from a ban, on a date to be decided, on tenants fees paid to private landlords—which landlords are expected to offset by increasing rents--not a single one of the usual sops utilised by chancellors to placate public anger was on offer. An increase in the derisory National Living Wage was announced, taking it from £7.20 to £7.50 an hour from April 2017. Even this is below the £7.60 figure that the Office for Budget Responsibility estimates is necessary to match previous Tory pledges to raise it to £9 an hour by 2020. It is now set to reach just £8.80 by 2020.

Hammond also pledged to press ahead with plans to expand selective education, with £60 million made available for grammar school expansion.

Money will continue to be shovelled at the super-rich and corporations. Hammond bragged: “Since 2010 the government has put a business-led recovery at the heart of our plan, we’ve cut corporation tax from 28 percent to 20 percent, sending the message that Britain is open for business... Corporation tax will fall to 17 percent, by far the lowest overall rate of corporate tax in the G20.”

May’s aim is to slash corporation tax to the 15 percent suggested by incoming US President Donald Trump.

A further £2 billion in tax breaks will be offered to corporations to fund research and development.

For all the subventions to the richest in society, Britain’s economy is profoundly weak--even prior to the economic woes that will accompany the UK leaving the European Union trading bloc. After Hammond spoke, the OBR confirmed that the national debt looks set to hit almost £2 trillion, more than double the £800 billion when Labour left office in 2010. Additional borrowing directly related to Brexit would be £58.7 billion over the next six years (£188 million a week).

The OBR warned that the economic situation was perilous, stating that “any likely Brexit outcome would lead to lower trade flows, lower investment and lower net inward migration than we would otherwise have seen, and hence lower potential output.”

This was a best case scenario, with the OBR clarifying, “In the near term, as the negotiations get under way, we assume that GDP growth will continue to slow into next year as uncertainty leads firms to delay investment and as consumers are squeezed by higher import prices, thanks to the fall in the pound. But we do not assume that firms shed jobs more aggressively or that consumers increase precautionary saving, both of which are downside risks if the path to Brexit is bumpy.”

Brexit has proved to be an accelerant towards economic disaster for Britain, but it is only a particular manifestation of the raging contradictions of global capitalism--between the outmoded nation state system and the world economy--which is leading to trade war and military conflict.

Britain is entering unchartered waters, as it begins an exit from the EU trade bloc under conditions in which Trump, just a day before Hammond spoke, announced that he would withdraw from the Trans-Pacific Partnership trade pact with Asia to better pursue an “America First” policy and “bilateral trade deals that bring jobs and industry back.” The result of these policies will be trade war against everyone, including China, the EU--and an isolated UK.

As the Tories gear up for an ever-deeper assault on the conditions of millions of working people, the Labour Party offers no alternative. Shadow Chancellor John McDonnell, a self-styled “socialist” and the closest ally of party leader Jeremy Corbyn, responded to Hammond’s statement with rhetoric denouncing the “abject failure of the last six wasted years” that “offers no hope for the future.” But what he offered as an alternative was in reality exclusively directed to serving the needs of big business.

Calling for “full, tariff-free access to the single market,” McDonnell stated, “[I]n the national interest I urge him [Hammond] to stand up to the prime minister and the extreme Brexit fanatics [who favour an exit from the Single Market] in her cabinet.”

McDonnell’s utterances are noteworthy as much for what he does not say as what he does. Not once does he make the vaguest criticism of capitalism, let alone advocate a socialist alternative. All he can manage is to appeal for a few minor policy alterations that will supposedly “do the right thing for British workers and businesses”--such as the reintroduction of the 50p top rate of tax that was in place under the 2007-2010 Labour government of Gordon Brown.

Had McDonnell been speaking for a Labour government, rather than from the relative comfort of the opposition benches, he would have delivered much the same message as Hammond. Indeed, ahead of the Autumn Statement, he promised that Labour would display “an absolute and unbreakable commitment to fiscal discipline,” in government, adding, “There is no proverbial magic money tree.”

Death toll mounts, as India-Pakistan tensions seethe

Sampath Perera & Keith Jones

Indian artillery- and gun-fire across the Line of Control (LoC) that separates Indian- and Pakistan-administered Kashmir killed 10 Pakistani civilians and 3 soldiers yesterday and left a further 18 persons wounded.

Nine of the civilians died when the bus on which they were travelling in Lawat, in the Neelum Valley, was hit by what a local official described as “small and big arms.” Islamabad has accused the Indian military of having deliberately targeted the bus and an ambulance that rushed to the scene.

New Delhi has rejected the charge it is targeting civilians. But yesterday, the Indian Army did carry out intense firing along the LoC, making good on its threat to exact “heavy retribution” for the deaths of three Indian soldiers the day before. The three, one of whose bodies India charges was “mutilated,” were killed by anti-Indian Islamist insurgents whom New Delhi claims are armed and supported by Pakistan.

Describing Wednesday’s cross-border barrage, an Indian defence spokesman told the Hindu, “We have carried out fire assaults” on Pakistani military positions. “Most parts of the LoC witnessed exchange of fire all day.”

South Asia’s rival nuclear-armed states have been locked in an escalating confrontation for the past two months—ever since India’s Hindu-supremacist Bharatiya Janata Party (BJP) government declared Pakistan responsible for the September 18 attack that Islamist, Kashmiri separatists mounted on the Indian army base at Uri, just across the LoC.

It is now widely conceded in both the Indian and Pakistani press that the 2003 cease-fire between India and Pakistan in disputed Kashmir has collapsed and that the “new normal” is diplomatic sparring, cross-border barrages, mounting fatalities, and bellicose threats. This is, to say the least, a highly combustible dynamic, one that whether by accident or design could trigger an escalation to all-out war.

According to an Indian Express report from last week, there have been more than 200 separate incidents of cross-border artillery and gunfire exchanges since late September. While India and Pakistan have issued conflicting fatality claims, the death toll from these exchanges is now estimated to be nearing a hundred.

“Both armies are known,” continued the Express report, “to have mounted harsh retaliatory actions against the killings of soldiers, in some cases even carrying out retaliatory beheadings.” India, it added, has massed up to 225,000 troops along the LoC, while Pakistan is said to have mobilised 125,000.

To boost its war preparedness, India has placed emergency orders for munitions and weaponry. According to IHS Janes, New Delhi has fast-tracked the procurement of $750 million worth of ammunition and Special Forces equipment from Israel and Russia for delivery by the end of 2016.

The many belligerent statements issued by Pakistani military and government leaders notwithstanding, Islamabad has clearly been rattled by India’s renunciation of its reputed policy of “strategic restraint” vis-à-vis Pakistan and the failure of the US and the world’s other major powers to criticise India’s late-September cross-border raids inside Pakistan. By trumpeting these raids as proof of India’s military prowess and new-found readiness to impose its will, the BJP government jettisoned a four-decades-old Indian policy of refraining from publicising its military operations inside Pakistan, so as to avoid precipitating a dynamic of escalating strikes and counter-strikes that could rapidly lead to all-out war.

In an attempt to defuse tensions, Pakistan continues to publicly claim India’s “surgical strikes” never happened. This claim is belied by its own bitter complaints over world leaders’ failure to condemn them. Similarly, through weeks of intense cross-border firing stretching from late September until last week, the Pakistan Army denied that any of its soldiers had been killed.

This changed abruptly November 14, when the Pakistani military announced that seven of its soldiers had been killed by Indian firing in a single night.

In an attempt to initiate some sort of dialogue with India, Islamabad has announced that Sartaj Aziz, Pakistani Prime Minister Nawaz Sharif’s top foreign policy advisor, will travel to New Delhi at the beginning of next week to attend the annual “Heart of Asia” regional conference on Afghanistan. However, India has indicated no enthusiasm for Aziz’s visit.

Yesterday, Sharif denounced India for “continuing naked aggression…resulting in the death of innocent civilians” and, in a thinly veiled warning that New Delhi is pushing the region ever closer to the precipice of all-out war, said that India “has failed to comprehend the gravity of the situation.”

Sharif also repeated Pakistan’s oft-repeated charge that New Delhi is ratcheting up war tensions with Islamabad to divert international attention from “the grave human rights violations and atrocities being committed by the Indian security forces in Kashmir.”

The reality is that the ruling elites of both Indian and Pakistani have manipulated and abused the people of Kashmir as part of their seven-decade-old military-strategic rivalry. Rooted in the communal Partition of the subcontinent into an expressly Muslim Pakistan and a predominantly Hindu India, this rivalry, which today threatens to plunge the masses of South Asia into nuclear war, epitomises the reactionary character of the native bourgeoisies of India and Pakistan and the utter failure of independence under their rule.

Staggered by the world economic crisis and fearful that India was falling still further behind China in the race for power in Asia, the Indian bourgeoisie brought Narenda Modi to power two-and-half years ago to pursue a more aggressive policy against the working class and more boldly assert their interests on the world stage.

Modi quickly moved to signal that India is intent on changing the “rule of the game” with Pakistan. Within weeks of taking the reins of power, he authorised a more aggressive military posture along the LoC. Even more significantly, with a view to leveraging US support for India’s ambitions to be the dominant regional power in South Asia and the Indian Ocean, Modi has integrated India into Washington’s anti-China “Pivot to Asia.”

The BJP government further escalated tensions with Islamabad this past summer, in response to the outbreak of mass unrest in Jammu and Kashmir, India’s only Muslim-majority state, and the rapid expansion of the Sino-Pakistani alliance, as exemplified by the $50 billion China Pakistan Economic Corridor (CPEC).

Under the leadership of the self-styled strongman and virulent Hindu communalist Modi, the Indian bourgeoisie is seeking to use the current crisis with Pakistan to compel Islamabad to forgo any material support to the anti-Indian insurgency in Kashmir and accept Indian regional dominance.

It has been hugely encouraged in pursuing this confrontational and high-risk course—one that Defence Minister Manohar Parrikar has conceded could result in all-out war—by Washington. Not only has the US showered strategic favours on India, spiking profound fear in Islamabad of an ever-widening military-strategic gap with its arch-rival, the US publicly endorsed India’s illegal and provocative late-September “surgical strikes” inside Pakistan.

India’s war crisis with Pakistan has been accompanied by an escalation of tensions with China, underscoring that the Indo-Pakistani strategic rivalry has becoming enmeshed with the confrontation between US imperialism and China and that a major South Asian war could rapidly draw in the world’s first- and fourth-largest powers with incalculable consequences for all humanity.

The Indian government, military, and especially the corporate media have all bitterly attacked China for indicating, even as it counsels Islamabad to show “restraint,” that it opposes Indian efforts to isolate Islamabad and label Pakistan a “terrorist state.” With open encouragement from the BJP government, the Hindu right and other ultra-nationalist groups have launched a boycott of Chinese-made goods.

Earlier this month, Modi travelled to Japan to strengthen India’s military-strategic cooperation with the US’s most important Asian ally and Beijing’s most powerful strategic rival in Asia. The summit meeting between Modi and Japanese Prime Minster Abe concluded with their issuing a communiqué that parroted the US’s provocative anti-China stance on the South China Sea dispute.

Meanwhile, in a development aimed at unsettling both Beijing and Islamabad, Indian Defence Minister Parrikar announced that he favours jettisoning Indian’s “No First Use” nuclear weapons policy. Ambiguity as to India’s intentions, claimed Parrikar, will give New Delhi greater leverage in dealing with its adversaries.

Greek fascists attack refugee camp

John Vassilopoulos

Dozens of refugees were forced to flee the Souda refugee camp on the island of Chios last Thursday after a brutal attack by Golden Dawn members.

According to reports, the attack began at around 9:30 pm and lasted until the early hours of the morning. The fascists threw petrol bombs, large boulders and fireworks into the camp from surrounding elevated areas. A 42-year-old Syrian man was assaulted and a Nigerian boy was injured by one of the rocks. Three tents were burnt down and three more were damaged.

Afraid to return to the camp, the refugees that fled slept at the fishing market that night when temperatures dropped to 8 degrees Celsius. Many were still there three days later, according to reports.

On learning of the attacks, a group of aid workers rushed to help the refugees. One of these, Alexandros Panagiotakis, told CNN Greece that the group “came upon around 150 migrants at the fish market where they had sought safety from the far-right attackers. [Another aid worker and I] went to get our cars so that we could transport the migrants to a safer place.”

On their way to get their cars Panagiotakis and his colleague were set upon by a mob of 30 Golden Dawn members, who attacked them verbally and physically. “They threw us down and started to kick and swear at us,” said Panagiotakis. “They stopped only when a riot police squad arrived. They hit me on my sides and legs and the girl [the other aid worker] was semi-conscious. We were taken immediately to hospital.”

Similar attacks had taken place the previous evening, when Golden Dawn members armed with makeshift clubs and crowbars attacked refugees outside the Souda refugee camp while large stones were also thrown into the camp. According to reports a 25 year-old Algerian man is still in intensive care after being hit in the head.

In covering the events, the media lay the blame on the refugees by claiming that the troubles on Wednesday evening began after a group of migrants broke into a fireworks shop and then reportedly proceeded to set them off towards police and local residents. Refugees who spoke to Greek daily I Efimerida Ton Syntakton (Ef.Syn.) paint a different picture and claim that the trouble started two hours before when a group of locals attacked a group of Algerians sitting at the Chios public park. “The group had firecrackers and started to throw them [at the refugees] for no reason,” said a Syrian refugee.

The wave of violence was in fact stoked by the visit of Golden Dawn MPs Ilias Kasidiaris and Yiannis Lagos to Chios on Tuesday, where they spoke at a public meeting that evening calling for mass deportations of all refugees and migrants. This was part of a wider tour with a similar event taking place on the neighbouring island of Lesbos. Kasidiaris and Lagos were accompanied by a delegation of parliamentarians from Belgium, members of the Flemish far-right Vlaams Belang party.

There are currently more than 16,000 refugees and migrants being detained in refugee camps on Greek islands in the Aegean, while existing infrastructure is only adequate for around 7,500 people. The overwhelming majority have fled from the imperialist-driven conflicts in Syria, Iraq and Afghanistan. In Chios alone there are 4,000 refugees and migrants--nearly four times more than the current capacity.

Overcrowding is directly linked to the March agreement between the European Union and Turkey, which stipulates that Turkey take back all refugees who come across the Aegean to Greece. As a result, refugee camps in Greece have become internment camps of people--most of whom are destined to be deported back to Turkey after their cases have been assessed. The process is extremely slow, and meanwhile arrivals continue to flow in, which places even more pressure on existing infrastructure. According to figures from the International Organisation for Migration (IOM), nearly 3,000 people crossed into Greece from Turkey in the last four weeks alone.

The Golden Dawn meetings sought to exploit tensions among sections of the local population, partly due to the increase in petty theft as a result of the economic desperation of the migrant and refugee population and partly due to the effects the refugee crisis has had on the tourist industry, the backbone of the local economy. Their timing was also designed to cause maximum provocation, given that they coincided with the commemoration of the student uprising against the military junta on November 17, 1973.

A counter-protest was held that same evening in Chios, with around 200 people holding a march through the island’s main town towards the Grecian Castle Hotel where the Golden Dawn meeting was taking place. The demonstrators’ path was blocked by riot police.

According to various accounts from eyewitnesses, the attacks on Wednesday and Thursday were carried out under the nose of the police, despite their having been officially placed on high alert since the Golden Dawn meeting on Tuesday. Riot police only intervened to stop Thursday’s attacks on the camp in the early hours of the morning, after they had gone on for five hours. There was a notable delay in police intervening in the attack on the two aid workers, which took place a few metres away from two patrol cars.

Tolerance of far-right attacks by the Greek police, delaying intervention or letting perpetrators get away, is a common occurrence. Golden Dawn enjoys substantial support among officers, especially in riot police units. Three years ago rapper Pavlos Fyssas was murdered in Keratsini by a Golden Dawn member while police stood near-by and did nothing.

The police have arrested none of the perpetrators. The only people arrested so far were 37 refugees and three foreign aid workers during the altercations on Wednesday evening.

In a speech to his parliamentary group, Golden Dawn leader Nikos Michaloliakos openly defended the attacks while railing against the “progressive journalists of this country who lay the blame at the door of far-right elements.” He added, “You know what? Yes! For them every Greek that resists is a Golden Dawn member. For us that’s a badge of honour. Golden Dawn is the national defence of Greece.”

Like their far-right counterparts throughout Europe, Golden Dawn has been emboldened by the victory of the fascistic Donald Trump in the United States—which Michaloliakos referred to in his speech as “a true victory against globalisation.” But if Golden Dawn is able to posture as an anti-establishment party and to exploit social anger by channeling it into the scapegoating of migrants, this is the responsibility of the Syriza-led government. Since betraying his anti-austerity mandate last year, Prime Minister Alexis Tsipras signed a third austerity package with the EU while at the same time enforcing the EU’s reactionary refugee policy.

The 19,000 Dow: Markets soar on prospects for profiteering under Trump

Nick Beams

US stock indexes reached record highs again on Wednesday on expectations that the policies of the incoming Trump administration, based on “America first” economic nationalism, the removal of all regulations restricting corporate profit-making, and huge business tax cuts, will provide a major boost to the bottom lines of banks and corporations.

The Dow Jones Industrial Average continued its rise after closing above 19,000 for the first time ever on Tuesday. The Standard & Poor’s 500 index and the Russell 2000 were also in record territory. Only the tech-based Nasdaq index was slightly down after hitting a record high on Tuesday.

All four major indexes reached record highs on Tuesday, something that had not occurred since New Year’s Eve in 1999, at the height of the dot.com bubble.

The market rise is being led by two groups of stocks, banks and those involved in construction and infrastructure.

Bank stocks are being propelled by the prospect of interest rate increases, which will boost their profits, and indications that the Trump administration will wind back regulations, including some of the limited restrictions imposed under the 2010 Dodd-Frank Act. The rise in bank stocks is the main reason for the jump in the S&P 500.

The other major boost to the market was provided by construction firms. Shares in John Deere jumped by more than 10 percent, resulting in a boost to the S&P 500 index. Shares in other industrial stocks, including Caterpillar, were responsible for a major part of the rise in the Dow.

Stocks in these companies have been boosted by Trump’s commitment to initiate an economic stimulus package program of tax cuts and infrastructure spending. The tax measures include a reduction in corporate taxes from 35 to 15 percent, as well as a reduction in the top tax levels for the ultra-wealthy. Companies repatriating profits from overseas may have to pay as little as 10 percent.

But it is the infrastructure program, which has been put at $1 trillion, that has sent the markets soaring on the ever-stronger smell of money. It is not a plan for the government to borrow money and use it to finance much-needed improvements on roads, bridges and other basic facilities.

Rather, it is based on a privatisation scheme, in which firms will receive massive tax cuts for undertaking such projects. By means of tax breaks, they will receive back as much as 82 percent of the money they invest. As the owners of the projects they initiate, they will then be able to collect tolls or user fees in perpetuity. In many cases, the projects will involve profitable ventures to which companies would have been attracted anyway.

The same modus operandi applies to deregulation of the energy and pharmaceutical industries. In his brief video announcement on Monday, Trump said that for every new regulation that is introduced, two existing regulations will have to be eliminated. This is a program aimed not at increasing jobs and wages or improving social conditions for the masses of working people, but at providing a profit windfall for corporate America.

Trump’s economic plan for the US economy bears a striking resemblance to the business model of his real estate and casino empire: a mixture of tax evasion, scams and outright swindling, coupled with the exploitation of low-wage workers.

It has been estimated that the tax cuts and infrastructure spending increases will lead to an increase in US budget deficits from 3 percent of gross domestic product to 6 percent. Trump is also planning an immense increase in military spending. Who is to bear the burden of this debt explosion? The working class.

Trump is planning to cut non-defense discretionary spending by 1 percent a year, which will mean further reductions in food stamps, home heating assistance, unemployment benefits, health programs and the enforcement of job safety and environmental standards.

He is targeting federal workers for immediate attack, calling for mass layoffs, the gutting of job protection provisions, the elimination of automatic raises and the imposition of 401(k) plans instead of pensions for new-hires.

During the election campaign, Trump sought to attract voters suffering cuts in their wages and living standards with the promise that Medicare, Social Security and other entitlements would not be touched by his administration. But the budget process is in the hands of the Republican-controlled Congress, where House Speaker Paul Ryan has reiterated his plan to privatize Medicare. Since the election, Trump has said he is “open” to such a plan.

The Trump agenda has major implications for financial markets and international economic relations. The rise in the stock market has been accompanied by a significant rise in bond yields—up from around 1.7 percent before the election to around 2.3 percent today on the benchmark 10-year US Treasury note. This means a sharp fall in bond prices, which move in the opposite direction of yields.

Coupled with the near certainty that the Federal Reserve will lift its base rate at its meeting next month, the rise in interest rates could have a major impact on a financial system in which the bond market has been described as a bubble. Increased interest rates could bring about significant losses on financial deals made on the basis of rates remaining at their previous record-low levels.

The prospect of rising rates has already seen a rise in the value of the dollar, which has reached its highest point in 13 years as measured against a basket of international currencies. This means that US corporations that rely on international markets will face increased competition.

The Trump agenda of “America first” economic nationalism represents a major shift in US economic policy. It is being adopted under conditions in which the previous policy of near-zero interest rates and central bank money-printing is widely recognized to have exhausted its usefulness and failed to resolve the crisis that erupted with the Wall Street crash of 2008.

While the American ruling class has always pursued its own interests, US economic policy in the post-war period was based on the assumption that the interests of American capitalism were bound up with the expansion of global markets and trade. Now the free trade mantra has been thrown aside, threatening to set off a wave of retaliatory trade and economic warfare that sooner rather than later will rebound on the American economy.

Thanksgiving 2016 and the social crisis in America

Andre Damon

On October 3, 1863, in the midst of the Civil War, President Abraham Lincoln signed a proclamation authored by Secretary of State William H. Seward declaring the last Thursday of November “a day of thanksgiving.”

Despite a Civil War of “unequalled magnitude and severity,” the declaration stated, the conflict had not “arrested the plough, the shuttle or the ship,” while “the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore.” The proclamation concluded, “The country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.”

The ravages of the Civil War would last another year and a half. Nevertheless, it was true that society was being transformed by railroads, steamboats and the telegraph, an expansion in productive capacity that would accelerate with the rapid industrialization fostered by the Second American Revolution. The Civil War would clear the way for capitalist progress—and the explosive growth of the class struggle—by abolishing slavery.

As families throughout the United States gather to share a meal this Thanksgiving, relatively few will agree with Seward’s assessment that the country can expect “years with large increase of freedom.” Rather, for many, Thanksgiving will serve only to underline the economic hardship and oppression they face.

More than one in eight households will have had difficulty putting food on the table the year before, and millions will have a Thanksgiving meal only by standing in line at a food pantry or soup kitchen.

Over a million-and-a-half people were homeless last year, including some 300,000 children and 450,000 disabled people. Millions more live in substandard housing, doubled up with other families, or in motels. Such conditions may affect only a minority of American families directly. But the great majority of the population is economically insecure.

Forty-six percent of adults are so financially strapped that “they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money,” according to a survey released by the Federal Reserve this year.

Under these circumstances, the announcement that the average premium under the Affordable Care Act (Obamacare), supposedly designed to insure lower-income people, will increase 25 percent next year means that millions will either lose their health coverage or face hundreds, or even thousands of dollars in additional expenses.

The terrific stress caused by living in households one accident or illness away from financial ruin, in which young people are burdened by debt and face narrowing prospects, while the elderly confront rising medical costs and decreasing retirement benefits, produces many signs of social distress.

The brutality of this society, compounded by militarism and police violence, falls hardest on the young. One study has found that the prevalence of serious depression among teenagers increased by 37 percent between 2005 and 2014. Another reported that children from 10 through 14 are for the first time more likely to die from suicide than from a car accident.

Perhaps the most devastating manifestation of the social malaise is America’s drug epidemic. This year, a shocking 28,000 people will die from opioid overdose, almost as many as the number killed in car accidents. For tens of thousands of families, Thanksgiving will be a time of mourning for those who have lost their lives to heroin, fentanyl or prescription painkillers.

Many of the states most affected by the drug epidemic are those worst hit by joblessness and deindustrialization. Michigan, Ohio and Pennsylvania, the “rust belt” states that backed Barack Obama in 2008 and 2012 but swung behind Donald Trump in the 2016 election, all saw their rates of opiate overdose increase by more than 10 percent between 2013 and 2014.

The social crisis in the United States is fueling an immense growth of oppositional sentiment, including significant signs of renewed class struggle and political radicalization that found only initial expression in the elections. This came first in the widespread support during the Democratic primaries for Vermont Senator Bernie Sanders, who called himself a socialist and denounced the “billionaire class” and social inequality.

Sanders’ “political revolution” concluded ignominiously with an endorsement of Hillary Clinton, who ran on the claim that, in the words of President Obama, America is doing “pretty darn great.” The implication of this delusional narrative was that those who disagreed and were swayed by Republican candidate Donald Trump’s demagogic appeals to social discontent were part of the “white racist working class,” seeking to defend their “privileged” status against blacks and other minorities. Basing her campaign on various forms of identity politics, Clinton pitched her appeal to the affluent and complacent. The result was a sharp decline in votes for the Democratic candidate within all sections of the working class.

Trump, who is being installed in the White House with the blessings of the outgoing president and both parties, will not “make America great again.” Neither he nor any section of the ruling class has a solution to the social crisis gripping America. His “America first” economic nationalism will exacerbate the global capitalist crisis and mean sharper attacks on workers within the United States. His program of tax cuts for the wealthy, the elimination of regulations on corporations, cuts in social programs and an immense increase in military spending will fuel social discontent and anger.

Trump’s election marks a turning point in the looming showdown between the financial parasites he personifies and the great mass of the population, the working class.