The 21st Century Cures Act: A gift to the US pharmaceutical industry

Brad Dixon

The 21st Century Cures Act is an early Christmas gift from the US Congress to the pharmaceutical and medical device industries. The bill guts the regulatory powers of the Food and Drug Administration (FDA), weakening the standards used to judge the safety and efficacy of drugs and medical devices. Notably, the bill does nothing to address skyrocketing drug prices.

As part of its public relations cover for the corporate giveaway, Congress included in the bill some limited funding for biomedical research and other health initiatives. This funding, however, is not mandatory and will be subject to the annual appropriations battles over discretionary spending. It is likely that these funds will never materialize.

Crafted over the course of two years with the input of more than 1,400 lobbyists, the Cures Act received overwhelming bipartisan support. The House voted 392 to 96 in favor of the nearly 1,000-page bill, and last week the Senate passed the bill in a vote of 94 to 5. President Obama says he looks forward to signing the bill when it reaches his desk.

The widely publicized portion of the bill contains $6.3 billion in funding for biomedical research and health initiatives. The FDA will receive $500 million through 2026 to pay for the provisions in the act, but nothing to address the agency’s other longstanding problems. The bill also grants states $1 billion in funding to combat the opioid epidemic, and support for mental health initiatives.

The National Institutes of Health (NIH), which has seen its budget decline 22 percent since 2003, will receive $4.8 billion (an earlier House version called for $8.75 billion), but spread out in equal portions over 10 years. This includes the $1.8 billion reserved for the “cancer moonshot” being pushed by Vice President Joe Biden, and another $1.6 billion earmarked for research on brain diseases such as Alzheimer’s.

“While the bill authorizes $4.8 billion to the NIH over the next 10 years—on average, a mere $480 million a year—this is barely a quarter per year of what the House passed last year,” Representative Rosa DeLauro of Connecticut, the senior Democrat on the Appropriations subcommittee on health and human services, told the New York Times.

“There is also no guarantee that the appropriators will follow through and provide funding each year,” said DeLauro.

“When American voters say Congress is owned by big companies, this bill is exactly what they are talking about,” Democratic Senator Elizabeth Warren said in a speech from the floor last week.

“Why bother with a fig leaf in the Cures bill? Why pretend to give any money to NIH or opioids? Because this funding is political cover for huge giveaways to giant drug companies,” said Warren.

Moreover, the Cures Act actually cuts $3.5 billion from the Prevention and Public Health Fund established under the Affordable Care Act (ACA), according to The Hill. The fund was established to promote the prevention of Alzheimer’s disease, hospital-acquired infections and chronic illnesses such as cancer, heart disease and diabetes.

“Cutting the Prevention Fund will limit the nation’s ability to improve health and quality of life and prevent disease,” Rich Hamburg, interim president and CEO of The Trust for America’s Health, told NBC News. “This is the nation’s first and only substantial investment in moving from our current ‘sick care’ system to a true preventive health system.”

The Cures Act represents a significant rollback of the regulatory authority of the FDA and the guidelines used to approve new drugs for the past half century.

The modern system of drug regulation was established by the 1962 Kefauver-Harris Amendments to the Federal Food, Drug, and Cosmetic Act of 1938 in response to the thalidomide tragedy. Thalidomide was approved for sale in Europe as an over-the-counter treatment for morning sickness in pregnant women in the late 1950s, but resulted in thousands of babies being born with crippling and deadly birth defects.

Famously, FDA reviewer Francis Oldham Kelsey withheld approval of the drug, insisting that it first be fully tested. Her decision minimized the fallout from the tragedy in the US.

Previously, a drug would be automatically approved if the FDA failed to act on an application within a certain time period. The Kefauver-Harris Amendments transformed the FDA into an actual gatekeeper. Drugs could no longer be marketed unless both their safety and efficacy had first been demonstrated through a series of carefully designed clinical trials. Standards were issued for the manufacture, packaging and labeling of drugs, along with a system for reporting adverse events.

Congress has made a number of modifications to the modern system since then—such as creating an expedited approval process, and requiring that pharmaceutical companies fund agency drug reviews—but the Cures Act marks a qualitative development.

Instead of relying primarily on randomized clinical trials, the gold standard for determining drug safety and efficacy, the Act requires the FDA to consider “real world evidence,” such as anecdotal observations of patient outcomes.

“A homeopath would love this provision, and I’m sure, so would drug companies,” oncologist David Gorski commented in 2015 on the Science-Based Medicine web site. “Why bother with the time, bother, and expense of those pesky clinical trials to get your drug approved for additional indications, when you can rely on clinical experiences based on therapeutic use, uncontrolled observational studies, or registries instead?”

The bill creates a new expedited pathway for “regenerative medicine” products that rely on surrogate or intermediate endpoints, instead of clinical endpoints such as patient survival. Expedited approvals require a rigorous collection of post-approval data to confirm the safety and efficacy of the drug, but a report released last year by the Government Accountability Office (GAO) found that the FDA was not fulfilling its post-market oversight obligations.

The Cures Act allows pharmaceutical companies to promote off-label uses for drugs (uses not indicated by the FDA-approved label) to insurance providers. In recent years, the pharmaceutical industry has faced major fines for off-label promotion, and it has sought to roll back restrictions on promotion of off-label uses by suing the FDA, claiming that such restrictions violate free speech. The new rule will discourage companies from funding clinical trials for new indications of a drug.

The limited population pathway provision of the Act pressures the FDA to approve new antibiotics, antifungals and possibly other drugs based on smaller clinical trials, which will be less likely to detect safety risks or establish efficacy.

The bill reauthorizes and expands priority review voucher programs. Intended to promote the development of drugs that treat rare or neglected diseases, the FDA has nonetheless awarded priority vouchers, which can be sold to other companies for large sums of money, for treatments already widely used. Furthermore, there is no provision guaranteeing that these treatments will be made available or affordable.

The Cures Act also weakens the already lax regulations governing medical devices. It requires FDA employees to only ask for the minimum possible amount of information when approving new medical devices, eases the FDA’s authority to regulate combination drug/device products, and provides an overly broad category of “breakthrough” devices.

The watchdog group Public Citizen has detailed these and other problematic provisions contained in the Cures Act.

“These provisions would unravel the FDA, turning it from the treatment watchdog it is today into a puppet of the pharmaceutical and medical device industry,” said Johns Hopkins medical doctors Reshma Ramachandran and Zackary Berger in an opinion piece for STAT News earlier this month .

“If the 21st Century Cures Act is passed as written, clinicians could be given potentially deadly drugs and devices to prescribe to their patients, blessed by this new version of FDA approval,” they wrote.

The Cures Act was one of the most heavily lobbied bills proposed by the 114th Congress, with over 1,455 lobbyists representing 400 companies and other organizations, according to Kaiser Health News, which analyzed lobbying data compiled by the Center for Responsive Politics. This includes 78 pharmaceutical companies, 24 device companies and 26 biotech companies, which reported more than $192 million in lobbying expenses on the Cures Act and other legislative priorities.

The Pharmaceutical Researchers and Manufacturers of America (PhRMA), the trade association representing the drug industry, spent $24.7 million of its overall $30.3 million in spending on the bill.

The Cures Act was also supported by a number of patient advocacy groups. While claiming to give voice to patients, these groups are often heavily tied to the pharmaceutical industry.

A study published this month by the Project on Government Oversight found that at least 93 percent (39 out of 42) of the “patient advocacy groups” included in stakeholder discussions with the FDA in late 2015 and early 2016 received funding from the pharmaceutical industry. More than a third of these organizations (15), had executives, directors or other personnel from the pharmaceutical or biotech industry on their governing boards.

The premise behind the bill—that the FDA holds up and delays the approval of potentially life-saving drugs—has no basis in reality. Last year the FDA approved 45 novel drugs, the highest number since the record-setting 53 approvals in 1996.

“The emphasis has been on getting drugs and devices on the market quickly, not on making sure that they are safe,” Dr. Rita Redberg, a cardiologist at the University of California San Francisco Medical Center and critic of the Cures Act, told Health News Review last year.

An analysis by Forbes this past August found that this year the FDA has rejected only 11 percent of the new uses for new molecular entities it has reviewed (3 out of a total of 28). In 2008, the rejection rate stood at 66 percent.

“The evidence is that we’re living in a golden age of drug approvals, at least from a drug company’s perspective,” writes Forbes reporter Matthew Herper.

Groups such as the ultra-conservative Goldwater Institute and Manhattan Institute have long been pushing for “reforms” to the FDA, a cause that was taken up by Michigan Republican Fred Upton, chairman of the House Energy and Commerce Committee. Upton was the major sponsor of the act and in the course of the past two election cycles received $536,650 in campaign donations from pharmaceutical and health products groups, according to data from the Center for Responsive Politics.

UK: Government sponsored “integration” report an agenda for division

Julie Hyland

The review by Dame Louise Casey into “Opportunity and Integration” is a misnomer. While it purports to look at “what could be done to fight the injustice that where you are born or live in this country, your background or even your gender, can affect how you get on in modern Britain,” it does nothing of the sort.

Growing inequality and social disadvantages are referenced only briefly, with no connection to the draconian austerity measures imposed by Labour, the Conservatives and Liberal Democrats alike. Instead Casey claims, “In this country we take poverty, social exclusion, social justice and social mobility seriously …”

Social “cohesiveness,” or its absence, is presented as the result of individual choices.

Casey has form. As a government official working in social welfare, she has been a favourite of successive Labour and Conservative governments for helping legitimise the assault on social and welfare programmes. Appointed by Labour’s Tony Blair as head of its misnamed Social Exclusion Unit, with a remit to reduce the numbers of rough sleepers, Casey infamously blamed charities and others aiding those on the streets for “perpetuating the problem.”

Her approach endeared her to the powers-that-be. In 2003, she took over as head of the Anti-Social Behaviour Unit—tasked with ordering civil behaviour orders against “anti-social” individuals and was appointed head of Blair’s Respect Task Force in 2005 to deal with “problematic” families. Closed down after just two years, Casey moved into community policing and then was appointed Commissioner for Victims and Witnesses. In both roles, she attacked the legal system for favouring criminals and called for the limitation of jury trials.

In 2011, she was given responsibility for investigating the London riots in August that year. The actual trigger for the riots—the police killing of Mark Duggan—was passed over, to blame “troubled families.” Speaking on the subject, Casey asserted, “We are not running some cuddly social workers programme ... we should be talking about things like shame and guilt ... we have lost the ability to be judgmental because we worry about being seen as nasty to poor people.”

In 2015 she oversaw the inquiry in child sexual exploitation in Rotherham, South Yorkshire, a result of which was the government’s decision that the local authority was “not fit for purpose.” Overall control was stripped from elected councillors and given to four government-appointed commissioners who continue to run the authority more than one year later.

Casey’s report on Rotherham was criticised by social work academics for its “lack of rigour and transparency in the methods used to gather and analyse data.” Likewise, her latest 200-page report is based on what she admits are outdated figures, bracketed by unsubstantiated hearsay and assertions. This is not a surprise. During a private Home Office after-dinner speech in 2005, Casey infamously decried the “obsession with evidence-based policy. If No 10 [the Prime Minister’s office] says bloody evidence-based policy to me one more time I’ll deck them one and probably get unemployed.”

Her disdain for “evidence” only endeared her more to the politicians she was supposedly railing against. As a BBC report mused on her latest report, “Perhaps Casey’s real value to politicians—and the reason she keeps being asked to produce reports on difficult social problems—is that she is able to say things in public that they think privately (that social workers are too ‘soft’ for example).”

In other words, Casey specialises in raw propaganda dressed up as research, and her latest report is no exception. Commissioned by Prime Minister David Cameron in 2015, its purpose is legitimise the Prevent programme introduced by then home secretary, now prime minister, Theresa May. This so-called counter-terror strategy has been used to attack personal and political freedoms and increase the powers of the police and state under the guise of combating Islamic extremism. On this basis, Muslims have been cast as a virtual “enemy within.”

Casey’s report specifically attacks “an anti-Prevent lobby” which has been “successful in stirring up anxiety and concern without offering any constructive alternatives to protect communities …” She calls for leaders in “government, in public sector, and faith institutions, and communities—to stand up and be more robust on this.”

To give some semblance of balance, she drops in the occasional reference to “black boys still not getting jobs,” difficulties facing girls and “white working class kids on free school meals still doing badly in our education system.” The term working class is only used in reference to “white” kids. Everyone else is referenced only by virtue of their skin colour, sex or religion. But the overwhelming bulk of the report blames immigrants and Muslims in particular—who are referenced 249 times—for failing to “integrate.”

To cover her back, Casey claims that she “wrestled with what to put in and what to leave out,” because “I know that putting some communities under the spotlight—particularly communities in which there are high concentrations of Muslims of Pakistani and Bangladeshi heritage—would only add to the pressure that they already feel.”

The centrepiece of Casey’s report is her call for the promotion of “British values” and for immigrants to swear an “integration oath.” To argue for this, she focuses on two main areas: the “unprecedented pace and scale” of immigration over the last years which, “in a situation where the country has been through an economic downturn,” she claims, “it is understandable that the pace and scale of immigration has felt too much for some communities.”

Casey notes that the UK population has grown by 4.1 million between 2001 and 2011—half of which she attributes to immigration. Still eight of out 10 people identify as “White British” and 60 percent define themselves as “Christian.” But she presents as a significant problem the fact that the non-white population (“most notably Indian and Pakistani”) is increasing; that the birth rate amongst ethnic-minorities is higher and that the number of people identifying as Muslim “grew most significantly” to make up the non-Christian religious population in the UK at 2.8 million. (The number of those with no religion has also risen from 17 percent to 26 percent, although other surveys put this at almost 50 percent).

On this basis she asserts, “As a nation, we are getting older, more secular and more open about our sexuality” while the “growing ethnic minority population is younger and more likely to identify as religious …”

Casey identifies as a central problem certain “mono-cultural” Muslim enclaves. The huge decline in social housing, and vast increase in house and rent prices, which have forced poorer people into certain areas, are passed over. Instead she repeats, again without evidence, various instances meant to prove the failure of Muslims to integrate. This includes citing, several times, one anonymous school where “pupils believed the population of Britain to be between 50% and 90% Asian …” There are no similar complaints at the majority of schools or areas that are overwhelmingly “White British” or “Christian.”

In the section “Domestic violence and abuse,” Casey notes that the overwhelming majority of female victims of domestic abuse are “White British” females, and that 92 percent of those prosecuted for such offences are “White British” males. Nonetheless, the rest of the section focuses on the “particular vulnerability of some immigrant or ethnic minority women” by virtue of their “lack of English language skills” and “social isolation and notions of honour or shame in some communities.”

Casey’s report has duly been welcomed by the government and large sections of the political establishment. In particular her complaint that “fear of being called racist” has prevented “society from challenging sexist, misogynistic and patriarchal behaviour in some minority communities,” and her condemnation of “right on” critics for “ignoring” the problem.

The government said it would act on the findings and both Labour and the UK Independence Party (UKIP) endorsed the report.

Echoing Casey, UKIP’s immigration spokesman, John Bickley, said it was an “excoriating critique” of “mass immigration, multiculturalism and political correctness,” which “the main parties have singularly failed to address …”

For Labour, Chuka Umunna claimed, “The fact people live parallel lives in modern Britain has been swept under the carpet for far too long and deemed too difficult to deal with …”

Umunna, who chairs the all-parliamentary group on integration, welcomed proposals requiring immigrants to pass English proficiency tests and similar courses.

New coalition heads Berlin state administration—austerity repackaged

Verena Nees

Last week saw the installation of a Social Democratic Party-Left Party-Green state administration in the German capital. The SPD, which many Berlin workers and young people rejected in the September state elections because of its anti-social and anti-democratic policies, once again heads the Berlin state executive. Merely the coalition colours have changed from “red-black” (SPD-Christian Democrat) to “red-red-green.”

Michael Müller (SPD) is again governing mayor. The four SPD state ministers in the incoming administration were all in the outgoing “black-red” coalition. Thus, the ex-banker Matthias Kollatz-Ahnen remains state finance minister and will continue his austerity diktats. Also staying is Sandra Scheeres as state education minister, whose name is synonymous with the misery in Berlin’s schools, teacher shortages and overcrowded kindergartens. The previous SPD state transport minister, Andreas Geisel, takes over internal affairs; the former state labour minister Dilek Kolat takes over the health portfolio.

The SPD now firmly holds the reins when it comes to security issues and the police apparatus, as well as the finance portfolio in the capital, which is still in debt to the tune of €60 billion. During the coalition negotiations, Kollatz-Ahnen already made clear that the budget continues to be committed to the austerity-driven “Stability Pact.” His budgetary objective reads: debt reduction.

However, the haggling over positions has had no savings effect. The Greens and Left Party demanded their fair share of the spoils of power, and ensured that instead of seven state ministers there will now be 10—inclusive of state secretaries and offices—all paid for by the public purse. Bündnis 90 / The Greens will have three ministries (justice, economic affairs and transport), the Left Party will also have three (housing and construction, labour and social affairs, and culture).

Two Left Party state ministers, Katrin Lompscher (housing) and Elke Breitenbach (labour and social affairs), already belonged to the earlier “red-red” state administration—Lompscher as health minister, Breitenbach as personal assistant to the social affairs minister Knake-Werner. They are now responsible for key areas affecting the urgent problems of the people of Berlin, and where there have been many protests over recent months. As culture minister, Lederer, former regional chair of the Left Party, will not halt the sustained orgy of cuts in the sector, but look after his favoured clientele among the cultural in-crowd.

For the second time since the fall of the Berlin Wall and German reunification, the Left Party (or its predecessor the Party of Democratic Socialism, PDS) has formed part of the Berlin state government. At the end of 2001, it entered the state administration following a wave of protests against the Berlin banking scandal. In 10 years in power, it proved conclusively it is a reliable bourgeois, pro-capitalist party. For the broad masses of Berliners, the “red-red” state administration of Klaus Wowereit meant massive social cutbacks. After 10 years of rule, the Left Party lost half of its votes and the SPD-Left Party administration was thrown out of office by voters.

In re-joining the Berlin state administration, the Left Party continues these reactionary policies; however, because of the growing economic crisis the “red-red-green” administration will impose even harsher social attacks. Working families and young people confront a very right-wing state government that will seek to brutally impose its will against resistance in the population.

The government programme adopted in mid-November contains much smoke and mirrors, praised by the media and by pseudo-left groups as “social reforms”—more homes, a few alms for refugees and Hartz IV welfare recipients, better cycle paths, etc. But all of this is “subject to financial restraints” and serves as a fig leaf to cover over the real policies.

The character of the new state administration in Berlin will be determined by the rapid intensification of the international and European crisis, the increasingly aggressive foreign policy of German imperialism and the systematic arming of the police and intelligence apparatus, with which the ruling class is preparing for coming revolutionary convulsions.

The new administration is taking on the role of making Berlin the capital of militarism, war propaganda and the police state, and to suppress any opposition by workers and youth. This is also made clear by the appointment of two “surprising personalities.” The deputy spokesperson of federal Foreign Minister Frank-Walter Steinmeier (SPD), Sawsan Chebli, is moving into the office of Mayor Müller to “coordinate” federal and regional affairs. Torsten Akmann, previously Head of Unit in the federal interior ministry and its representative at the parliamentary committee of investigation into the crimes of the far-right National Socialist Underground, will become secretary of state for domestic affairs in the Berlin state executive.

It is not only the parties responsible for the Hartz IV welfare and labour “reforms” and for taking Germany to war again—the SPD and the Greens—who are standing for a right-wing and militarist agenda in Berlin. In recent months, the Left Party has also signalled that it is willing to advance all of German imperialism’s major projects.

On the issue of foreign policy, several top Left Party functionaries have declared their support for Bundeswehr (armed forces) missions abroad, including the party’s parliamentary leader Dietmar Bartsch, recently crowned as lead candidate in next year’s federal elections. Following the election of Donald Trump as the next US president, his parliamentary colleague Stefan Liebich expressed his support for plans to create a European army.

The EU, which is hated by millions of people in Europe as an instrument of big business and the banks, was vehemently defended by Left Party politicians Axel Troost and Harald Wolf in a recent “polemic for another European Union.”

Also on the issues of Agenda 2010 (welfare cuts and austerity) and refugees, the Left Party has signalled it will help to implement the official policy. Bartsch said “not everything is bad” about Agenda 2010. Sahra Wagenknecht, also a lead candidate for the general election, calls for a restrictive limit on the number of refugees.

The assertion in the coalition agreement that there would be fewer deportations is designed to throw sand in the eyes of refugees and their supporters. In truth, the “red-red-green” coalition wants to realize the current planned mass deportations by increasing pressure for “voluntary return.”

The character of the new state administration is most evident from the unanimous call by the SPD, Greens and Left Party to increase police numbers and equip them with modern weapons and armoured vehicles. The political establishment in Berlin, and that has long included the Left Party, is reckoning with growing opposition to the policies of war and social devastation. For this reason, a massive apparatus of oppression is being assembled in the capital.

The Left Party will play a special role in the coalition. Its leadership cadres are composed of cynics who deploy left phrases to impose right-wing policies. With radical verbiage, the Left Party seeks to place itself at the forefront of any protest movements, using its networks in the trade unions, neighbourhood initiatives and social clubs to bring any real movement from below into the orbit of official politics and stifle it.

The Left Party in Berlin is mostly recruited from the PDS and the former East German state party SED, and is particularly sensitive to social and political opposition to the ruling elite. Ultimately, it was the SED/PDS, which in the early 1990s ensured the smooth restoration of capitalism in the former GDR (East Germany).

Neither currently nor in the GDR has the party stood for socialism, as falsely claimed, but has always been committed to Stalinism, which is hostile to every independent movement of the working class. Many Left Party politicians who set the tone in the state legislature and various levels of state politics come from this Stalinist tradition.

However, the period of the SPD-Left Party state legislature and its anti-social policies are still well remembered and have discredited the Left Party in large parts of the population. For this reason, the pseudo-left tendencies like Marx21 and SAV (offshoots of Britain’s Socialist Workers Party and Socialist Party) endeavour to give the party a “left” guise.

Symptomatic of this is the statement by Lucy Redler (SAV), who also sits on the Left Party federal executive, reproduced by Zeit online: The Left Party must not “become part of the one-party cartel,” she says, because this would “further strengthen the AfD [far-right Alternative for Germany]”. Instead, one must exert “pressure from below,” only then in the next breath to insist: “I am in favour of the Left Party governing.”

Significantly, the SAV and Marx21 fawned over US Senator Bernie Sanders, who received 13 million votes in the US primaries, after he claimed to be a socialist and promised to fight the billionaires on Wall Street. However, at the crucial moment he called on his followers to support Democratic candidate Hillary Clinton, and even now speaks positively about the fascistic president-elect Donald Trump. This is the kind of political treachery that animates the Left Party.

New reports show social inequality is deepening in US

Gabriel Black

Several new indices of wealth and income in the United States released last week illustrate how deeply polarized American society has become along class lines in the past four decades.

The bottom half of Americans made on average $16,200 in 2014, including supplemental benefits like food stamps and other benefits. More importantly, this bottom half of America has had flat incomes since 1980, when the annual average among the bottom half was just $16,000.

Meanwhile the top 1 percent of income earner have seen their average yearly incomes triple. In 1980, the top 1 percent of the population made $428,200 a year, but in 2014 they made $1,304,800. The average top percentile income earner makes double in a year what an average worker in the bottom half of society makes working their entire life.

The data is yet another depiction of how several decades of class war against workers have reorganized income in the United States. Job cuts, wage cuts, retirement cuts, and medical care cuts have left large sections of the working class practically penniless. Meanwhile, nearly all income gains made are going to the super rich.

It is notable that this data concerns income, not wealth. Because much of the money made by individuals is bound up in stocks and other financial assets, wealth disparity between the majority of the population and the rich is greater than income disparity.

These numbers come from new data from economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. Details of their research was published this week in the New York Times after the economists gave the paper’s reporters a closed presentation on the data, which is adjusted for inflation and is in constant 2014 dollars.

According to these figures, the top 1 percent of income earners have gone from earning 10.7 percent of the national pre-tax income in 1980 to earning 20.2 percent in 2014. Meanwhile, the bottom 50 percent of the population have gone from earning 19.9 percent of the nation’s income in 1980 to only receiving 12.5 percent of it in 2014. That is, half of the population receives just over 10 percent of the country’s income.

In a second study released last week, a group of sociologists and economists found that only half of 30-year-olds today earn more than their parents did when they were 30-years-old. For comparison, in 1970, 92 percent of 30-year-olds earned more than their parents when their parents were the same age.

The data comes from the Equality of Opportunity Project spearheaded by economists and sociologists at Stanford, Harvard, and the University of California, Berkeley.

While a portion of their data can be attributed to the post-war boom, which raised incomes for an earlier generation of Americans, the data also shows that there has been a significant decrease for the younger generation today. If the trend continues, in the near future the majority of 30-year-olds would be making less than their parents did when they were the same age.

The data was also broken down by state. While every state saw falling income mobility between today and the 1940s, some of the worse off states were centered in the former industrial hearth of the United States. Michigan, for example, had one of the sharpest declines, as did Illinois, Indiana and Ohio. Another section of the country that was particularly hard hit was the Pacific Northwest, whose timber and resource-based economy has collapsed in the past three decades.

The information when broken down by gender revealed that the decline may be even steeper than it seems. When looking just at 30-year-old men, only 41 percent of them made more than their fathers did at a similar age. This even starker trend among males shows that the numbers, as a whole, would be worse had women started off with equal wages as men. In other words, the data is skewed by the fact that many women from the older generation did not work and that the inequality between male and female wages were greater 40 years ago compared to today.

Raj Chetty, one of the lead economists behind the project, told the Wall Street Journal, “Wages have stagnated in the middle class. When you’re in that situation, it becomes very hard for children to do better than their parents.”

Chetty’s team argued that they did not see any way to reverse the trend without an unrealistically high percentage of growth.

In a similar vein, the Wall Street Journal ’s annual monthly survey of economists stated that it would be highly unlikely for the US to gain much more than 50,000 new manufacturing jobs by 2020.

James Smith, an economist at Parsec Financial, told the Journal, “Manufacturing employment is now back to 1941 levels and falling. This is a global trend and not at all specific to the U.S. It is caused by labor productivity growth.”

The United States is not just experiencing unprecedented inequality; it is also facing an unprecedented period of economic stagnation. Furthermore, this process is not specific to the US—growth stagnation is an international phenomenon.

Growth in technology should have a liberating effect, allowing people to work less for higher pay and a higher standard of living. However, under capitalism, where the huge companies are run for the private profit of a handful of billionaires, it has the effect of deepening inequality and increasing unemployment.

The IRS also released a statement on December 1 noting that in 2014, the top 400 individual income earners in the United States made 20 percent more than the top 400 income earners made in 2013. While part of the change is reflected in year-to-year changes in how to best register stock market-derived income, it none-the-less reflects the sustained boom in wealth for the ultra-rich.

Heroin epidemic in the US reaches historic proportions

Genevieve Leigh

New data released by the Centers for Disease Control and Prevention (CDC) for 2015 expose a milestone in the ongoing US heroin epidemic, with opioid deaths rising by 5,000 since 2014, surpassing 30,000 for the first time in recent history. The data include deaths caused by all drugs in the opioid family, including prescription painkillers such as oxycodone and hydrocodone, synthetic opioids, primarily fentanyl, and illicit drugs such as heroin.

The increase in deaths is predominantly in the latter two categories, with heroin deaths rising by more than 2,000 cases, and fentanyl, a painkiller which can be up to 50 times stronger than heroin, which saw a 75 percent increase since 2014. This marks the first time since the 1990s that heroin deaths surpassed deaths from more traditional opioid painkillers such as oxycodone. It also marks the first year in recent history in which more people died from heroin-related causes than from gun homicides. To put this in perspective, gun homicides outnumbered heroin deaths by more than 5 to 1 as recently as 2007.

As shocking as these numbers are, the opioid epidemic is likely much more severe than this year’s report reveals. Users who under previous circumstances would have died from overdosing, are now often being saved by a drug called naloxone (brand name Narcan), which reverses the effects of opioids within minutes, sending the user into almost instant withdrawal.

The staggering number of overdose deaths across the US over the past decade has prompted many states to issue blanket prescriptions making naloxone widely available to the public, saving thousands of lives, but also diluting the data on the severity of the epidemic.

In 2014, emergency responders in Maine alone saved 829 lives with naloxone. However, one report by the CDC suggests that naloxone is given by other drug users, rather than emergency responders, in as many as 83 percent of cases. This means that most overdose cases are not ever reported.

The problem of substance abuse in the United States is a symptom of a diseased society in which all the ills of capitalism coalesce to create a virtual breeding ground for addiction. Only in a society rocked by extreme poverty, unemployment and poor education, that lacks art and culture and preaches individualism, could such a murderous epidemic flourish to the scope we see today.

However, the more recent opioid problem in the United States has been exacerbated by dual components of the capitalist system. In addition to being the product of the deplorable conditions created by capitalism, opioid addiction in particular has been largely stoked by the criminal activities of the profit-crazed pharmaceutical companies, primarily Purdue Pharma.

Purdue Pharma released the painkiller OxyContin, a semisynthetic opioid, onto the market in 1995, marketing it as “revolutionizing” pain medication due to its long-lasting relief, an unprecedented full 12 hours. This claim was quickly proven to be a gross over-exaggeration by multiple clinical studies, and overwhelming doctor and patient complaints. In fact, there is substantial evidence suggesting that Purdue executives were actually well aware of this information before the drug hit the market.

However, without this added feature there would have been no incentive to use OxyContin as opposed to any other, less expensive painkiller. The cravings for the immense profit promised by OxyContin outweighed any moral sense of responsibility to the condition of humanity, and the company decided to carry through with its plans. The company would go on to net over $30 billion in sales over the next two decades.

According to the National Institute on Drug Abuse, in the early 1990s prescriptions for painkillers at US pharmacies increased by 2 million to 3 million each year. Then, from 1995 to 1996, the number of prescriptions jumped by 8 million.

The ways in which Purdue pushed the use of OxyContin is stunning and could easily be the topic of an entire book. Vox reports that “between 1996 and 2002, Purdue Pharma funded more than 20,000 pain-related educational programs through direct sponsorship or financial grants and launched a multifaceted campaign to encourage long-term use of [opioid painkillers] for chronic non-cancer pain.”

One such “educational program” pursued by Purdue Pharma was a video promotion called “I Got My Life Back,” which documented the experiences of six people who suffered from chronic pain and were treated with OxyContin. The company distributed 15,000 copies of the video to be used in physician waiting rooms. A year after the video was released, the overall number of opioid painkiller prescriptions filled jumped by 11 million. Promotional materials were just one part of an aggressive marketing strategy, which also included monetary incentives for doctors who prescribed the drug.

In 2007 three of the company’s executives were charged with misbranding the drug and massively downplaying the possibility of addiction. All three pleaded guilty due to the massive amount of evidence against them and the company settled with the US government for $635 million, a mere fraction of what was made off the drug.

According to the American Society of Addiction Medicine (ASAM), 80 percent of new heroin users started out misusing prescription painkillers. Ninety-four percent of respondents in a 2014 survey of people in treatment for opioid addiction said they chose to use heroin because prescription opioids were “far more expensive and harder to obtain.”

The transition from prescription painkillers to heroin is likely due to a combination of the obvious addictive quality of opioids, but also the attempted solutions to the problem by the government. The last decade has ushered in a slew of new laws regarding prescription opioids in an attempt to restrict access to the drug.

However, these measures came much too late. With an entire generation already deep in the throes of addiction, making the drug harder for users to obtain meant that many would be compelled to turn to heroin as a more easily attainable, but ultimately more dangerous, substitute.

Markets pushed to record highs on Trump surge

Nick Beams

In his book on the 1930s Depression, The Great Crash, the economist John Kenneth Galbraith included a chapter titled “In Goldman, Sachs We Trust.” The title could well be reprised in an analysis of the stock market surge that has followed the election of Donald Trump to the US presidency.

Since November 8, Wall Street’s Dow Jones index has risen by 7.8 percent, closing on Friday at a record high of 19,765—the 14th record close since the election of Trump. It is heading toward 20,000 just weeks after it broke through 19,000 for the first time. The euphoric surge in the Dow is even more remarkable considering that on election night the futures index at one pointed indicated a possible 500-point decline.

The broader-based S&P 500 index has also enjoyed a surge. It has risen by 5.6 percent in the last month and also set a new record on Friday—the seventh time it has done so since the election.

The chief component in the rise of the Dow has been the leap in the share price of the investment and banking giant Goldman Sachs. Its shares have risen by 33 percent, making it responsible for 29 percent of the overall rise in the Dow, or 400 points out of the total 1,422-point increase in the index since the election.

The second biggest contributor to the stock market lift-off has been JPMorgan Chase. Its shares have risen by 22 percent, contributing 7 percent to the rise in the Dow.

During the election campaign, Trump railed against the Democratic Party candidate Hillary Clinton for her close connections with Wall Street, and Goldman Sachs in particular. On Friday, however, Trump offered a major economic post in his administration to Gary Cohn, the president and chief operating officer of Goldman Sachs, second in the chain of command to CEO Lloyd Blankfein.

Cohn has been tapped by Trump to head the incoming administration’s National Economic Council, responsible for implementing the White House’s economic policy agenda. If he accepts, he will join two other former Goldman Sachs operatives in the new administration—Steven Mnuchin, who is to head the treasury department, and the ultra-right-wing Steve Bannon, who is to be the chief strategist of the Trump administration.

As for Blankfein, who supported Clinton in the election, he has turned around. Summing up the attitude of much of the financial aristocracy to the new administration, he told the Wall Street Journal that Trump was “a very smart guy,” who “may turn out to be a much better president than anyone else who might have been in that place.”

On the basis of appointments made so far, the Trump cabinet will be the wealthiest in American history. His choices for the key posts of Treasury, Commerce, Education and Transportation have a combined net worth of at least $8.1 billion.

The chief motivating factor behind the rise on Wall Street is the understanding that the incoming Trump administration will not only carry out policies to benefit the financial elites, but that responsibility for implementing this agenda will be in the hands of some its foremost representatives.

One of the main reasons for the rise in bank stocks, reflected in the fortunes of Goldman Sachs and JPMorgan Chase, is that a Trump administration will tear up the few restrictions on the operations of the banks and finance houses put in place under the Dodd-Frank Act, which was introduced in response to the global financial crisis of 2008. The 2011 report on the financial crisis produced by the Senate Permanent Subcommittee on Investigations made it clear that Goldman Sachs’ operations in the lead-up to the 2008 Wall Street crash were of a criminal character.

Another factor fuelling the enthusiasm on Wall Street is the prospect that a Trump administration will cut the corporate tax rate to as low as 15 percent from its present level of 35 percent, while introducing personal tax cuts for the very wealthy.

The so-called infrastructure program of the new regime is also viewed as providing a boost to the bottom line. The basis of the Trump plan, at least so far as it has been revealed, is not a program of government works, but rather the provision of massive tax write-offs—possibly as high as 80 per cent—for corporations that undertake infrastructure projects. These will involve public-private partnerships under which the corporations will enjoy a permanent revenue stream from their operation.

Consequently, engineering, transport and construction companies are among those that have enjoyed a rise on Wall Street. Energy companies have also benefited based on the view that a Trump administration will ease environmental and other regulations in line with a broader deregulatory program across the economy as a whole.

Trump campaigned on the slogan “Make America Great Again” in an attempt to tap into the hostility to the political and financial establishment across broad layers of the American population—a hostility reflected not only in support for him, but even more strongly in that received by the Democratic Party contender Bernie Sanders, who proclaimed himself a “socialist” and opposed to the “billionaire class” before swinging behind Clinton once she received the nomination.

The basis of that opposition has been underscored by a new study on economic inequality in the US issued by economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman released last week. It showed that in the period from 1980 to 2014, the latest year for which complete data were available, the share of income received by the bottom half of the population, a total of 117 million adults, fell from 20 percent of the total to just 12.5 percent.

No doubt one of the factors in the rise on Wall Street is the recognition that the new administration will increase these trends even further.

There is also the perception that US firms will be the beneficiaries of the economic nationalist “America-first” agenda that forms the centre of the Trump program.

In general, media commentary on the rise in the markets has been celebratory in tone. But some notes of caution have been sounded. According to a measure developed by economist Robert Shiller, the present level of the cyclically adjusted price/earnings ratio stands at a level exceeded only three previous times: in 1929, in 2000 at the height of the tech bubble, and in 2007 during the housing and stock bubble.

Others have drawn parallels with the economic nationalist and protectionist Hoover administration, which sparked a 13 percent market surge in 1928 before the US economy plunged into the Great Depression.

Trump threatens to overturn One China policy

Peter Symonds

US President-elect Donald Trump upped the ante yesterday in his war of words with China. He declared that he did not feel bound by the “One China” policy, which has been the foundation of diplomacy between the two countries for more than 40 years. His comments follow his phone conversation with Taiwan President Tsai Ing-wen on December 2—the first direct contact between US and Taiwanese leaders since 1979.

Speaking on Fox News, Trump made clear he would abide by the One China policy, which recognises Beijing as the sole legitimate government of all China, only if the Chinese government caves in on other issues. “I don’t know why we have to be bound by a One China policy,” he declared, “unless we make a deal with China having to do with other things, including trade.”

Trump reiterated what amounts to hefty demands on China. “I mean, look,” he said, “we’re being hurt very badly by China with devaluation; with taxing us heavy at the borders when we don’t tax them; with building a massive fortress in the middle of the South China Sea, which they shouldn’t be doing; and frankly, with not helping at all with North Korea.”

Trump’s bluster is a crude threat to tear up the basis for US-China diplomatic relations unless Beijing offers major economic and trade concessions, ends its land reclamation in the South China Sea and imposes crippling economic sanctions on its ally North Korea. He already threatened trade war measures during the election campaign, including branding China a currency manipulator and imposing 45 percent tariffs on Chinese goods.

The US rapprochement with China, sealed by President Richard Nixon and Mao Zedong in 1972, enshrined the One China principle in the Shanghai Communiqué. In 1979, a second communiqué laid the basis for establishing diplomatic relations. The US ended its diplomatic recognition of Taiwan and withdrew troops from the island while, under the Taiwan Relations Act, opposing any forcible reunification with China and continuing to sell arms to Taiwan.

By placing a question mark over US-China relations, Trump is recklessly compounding the rising uncertainty in Asia and around the world. The One China policy has been the foundation for the diplomacy of most countries with China. Any upgrading of US ties with Taiwan, as suggested by Trump’s phone call with the Taiwanese president, could rapidly lead to a confrontation with China. Beijing has declared that it will respond militarily to any attempt by Taiwan, which it regards as a renegade province, to proclaim formal independence.

In his remarks on Fox News, Trump denied that his phone call with President Tsai was lined up weeks in advance and insisted it was “a very short call” congratulating him on his election victory. “Why should some other nation be able to say I can’t make a call?” Trump declared. “I think it actually would’ve been very disrespectful, to be honest with you, not taking it.”

Trump’s claims are simply absurd. According to the New York Times, former Republican Senator Bob Dole, acting as a lobbyist for the Taiwanese government, worked behind the scenes for months to facilitate contact between Taiwanese officials and Trump’s staff. This included involving Trump’s aides in a United States delegation to Taiwan and facilitating a Taiwanese delegation to the Republican National Convention in Cleveland in July.

Moreover, Trump’s transition team features several figures with close links with Taiwan, such as his chief of staff Reince Priebus. Following Trump’s talk with Tsai, Taiwan’s official Central News Agency claimed Edward Feulner, a member of the transition team, played a crucial role in bringing about the phone call. Feulner met with Tsai in Taiwan in October. Regardless of how it was precisely organised, the call had been lined up weeks, if not months, in advance and involved more than just congratulations.

Significantly, the Republican National Convention that nominated Trump also altered the party’s official platform by incorporating what are known as the Six Assurances given by US President Ronald Reagan to Taiwan. These include not setting a cut-off date for the sale of US armaments to Taiwan.

Another of Trump’s foreign policy advisers and transition team, Peter Navarro, set out the framework for a fundamental shift in US relations with China and Taiwan in a National Interest article published in July. Entitled “America can’t dump Taiwan,” Navarro called for American leaders to “ never acknowledge the ‘One China, Two Systems’ policy—nor even refer to the ‘One China’ policy again.” [emphasis in the original]

Navarro declared that “maintaining Taiwan as an independent pro-US ally is absolutely critical for strategically balancing against the rise of an increasingly militaristic China.” In reality, it is the Obama administration that has conducted a massive military build-up in the Asia Pacific, and ratcheted up tensions with China in flashpoints such as the South China Sea, as part of its “pivot to Asia” to maintain American supremacy.

Navarro, who criticises Barack Obama for not aggressively enough pursuing the “pivot,” called for greater military aid to Taiwan to upgrade its defensive capacities, including “a similar set of ‘anti-access, area denial’ capabilities” that China is now using to deter US sea and air power in Asia. He also advocated assisting Taiwan to develop a fleet of state-of-the art diesel electric submarines to threaten the Chinese navy and shipping.

The response of the Chinese government to Trump’s provocative actions has been relatively low key. However, an editorial in the China Daily last week set out in unmistakable terms that Beijing was not about to horse-trade on the One China policy or Taiwan.

“Trump may be a shrewd businessman, adroit in commercial deal-cutting. He might have taken a page from his business manual—make a rigorous opening bid, then settle for less. But make no mistake about it: Taiwan stands on top of China’s menu of core national interests, and is not negotiable,” it stated.

“If he has been misled by his advisers for whatever reason into believing that unnegotiables are negotiable, in this case the One China principle regarding Taiwan, the consequences could be serious.”

Even before he assumes office, Trump is showing that he intends to adopt a bellicose stance toward China that upends decades of diplomatic norms, and recklessly risk a confrontation with Beijing that could trigger war between two nuclear-armed powers.

Behind hacking allegations: Explosive conflict over US policy toward Russia

Patrick Martin

Over the past three days, a conflict within the US ruling elite over foreign policy, centering on Russia, has exploded into public recriminations. It has taken the form of increasingly frenzied claims in the corporate-controlled media that “Russian hacking” targeted the US presidential election for the purpose of bringing about the election of Republican Donald Trump.

The campaign was sparked by back-to-back articles in the Washington Post Friday night and the New York Times Saturday, claiming that a secret new CIA assessment had determined that the Russian government had tried to help Trump win the presidency. This is the alleged motivation behind the hacking of emails from the Democratic National Committee and the Clinton campaign, which were then supplied to WikiLeaks for public release.

The Times presented as proof of alleged Russian favoring of Trump the claim that hackers had also penetrated the Republican National Committee but had not released Republican emails because the goal was to discredit Clinton and not Trump. This report was flatly denied by Republican National Committee Chairman Reince Priebus, who has been named chief of staff for the incoming Trump White House.

Trump himself made an appearance on Fox News Sunday and denounced the reports of Russian intervention as sour grapes by the Democrats to explain away their election defeat. “I think it’s ridiculous,” he said. “I think it’s just another excuse. I don’t believe it… I think the Democrats are putting it out because they suffered one of the greatest defeats in the history of politics in this country.”

The intensity of the divisions with the US ruling elite was demonstrated in the Trump transition team’s initial response to the reported CIA assessment, which noted sarcastically, “These are the same people that said Saddam Hussein had weapons of mass destruction.”

As Glenn Greenwald noted in The Intercept: “There is still no such evidence for any of these claims. What we have instead are assertions, disseminated by anonymous people, completely unaccompanied by any evidence, let alone proof. As a result, none of the purported evidence—still—can be publicly seen, reviewed, or discussed. Anonymous claims leaked to newspapers about what the CIA believes do not constitute proof, and certainly do not constitute reliable evidence that substitutes for actual evidence that can be reviewed.”

The immediate purpose of the Russian hacking claims, launched by Clinton and the Democratic Party on the eve of the Democratic convention in July, was to distract attention from the content of the leaked emails, which documented a conspiracy between the Clinton campaign and the Democratic National Committee to undermine the primary campaign of Bernie Sanders.

It is now clear, however, that underlying the public conflict over the hacking allegations is a ferocious struggle over foreign policy. Trump speaks for a faction within the ruling class that wants to focus US policy on a more aggressive military, economic and diplomatic offensive against China. The Democrats and leading media outlets such as the New York Times and the Washington Post speak for a faction of the intelligence establishment and the military that is opposed to any shift away from the aggressive and confrontational posture toward Russia.

This was underscored by an editorial posted Sunday night by the Timesheadlined “Russia’s Hand in America’s Election.” The Times repeats, again without providing any evidence, the claims of Russian hacking in support of Trump’s election campaign. It praises Clinton for having pledged that, if elected, she would “redouble efforts to punish and isolate Moscow for war crimes in Syria’s civil war and aggression toward Ukraine and other neighbors.” One might conclude that had Clinton won, her first act would have been to provoke a war with Russia, with the enthusiastic support of the Times.

Using extraordinary language, the editorial continues: “In Mr. Trump, the Russians had reason to see a malleable political novice, one who had surrounded himself with Kremlin lackeys.” It concludes by suggesting that, as a result of Russian intervention, “The election was indeed rigged.”

Neither the Times nor the Democrats are denouncing Trump over the cabinet of billionaire reactionaries and generals he is assembling or their plans to dismantle Medicare, Medicaid, Social Security and public education and eliminate all restrictions on corporate pollution of the environment and all regulations on the banks and big business.

They are entirely focused on preventing any shift under Trump away from the offensive against Russia. The hysterical and neo-McCarthyite character of their campaign was summed up in a commentary published on the Daily Beast web site by Clinton supporter Michael Tomasky, headlined “World War III: Democrats and America vs. Trump and Russia.” Tomasky characterized the Washington Post report on Trump and Russia and the New York Timesfollow-up as “Hiroshima” and “Nagasaki” for Trump, while suggesting that congressional Republicans who backed Trump, such as Senate Majority Leader Mitch McConnell, were guilty of treason.

This campaign, reviving the methods of anticommunist witch-hunting, is aimed not only at Trump, but at anyone who raises questions about US foreign policy, implicitly branding them as Russian agents.

In his appearance Sunday on Fox, Trump indicated the foreign policy orientation he stands for when he placed a question mark over Washington’s decades-long “One China” policy, acknowledging that Taiwan is not a sovereign nation, but rather part of China. “I fully understand the One-China policy,” Trump said. “But I don’t know why we have to be bound by a One-China policy unless we make a deal with China having to do with other things,” including trade, currency devaluation, the South China Sea, and North Korea.

There is no shred of pacifism or “appeasement” in Trump’s apparent shift away from confrontation with Russia. His extreme nationalist brand of militarism is simply focused on a different set of targets—or more precisely, the same targets as Obama, but in a different order. Trump is prioritizing China over Russia as a target of US economic, diplomatic and military pressure.

These rapid-fire events, in which intelligence agencies feed the media and the media seeks to stampede public opinion, only underscore the manipulative character of the election process as a whole. The real issues being fought out within the ruling elite—over what tactics and methods to employ against its global rivals—were concealed from the population while a barrage of slanders and scandals was unleashed to provide political cover for a further shift to the right.

Study on pay for young adults highlights plunge in US living standards

Niles Niemuth

A study released last week by a team of economists from Stanford, Harvard and the University of California at Berkeley found that the odds of American children growing up to earn more than their parents declined precipitously from 1970 to the present. Whereas in 1970, 92 percent of 30-year-olds earned more than their parents did at a similar age, that number fell to 51 percent by 2014.

The figures for males were even worse. As of 2014, only 41 percent of 30-year-old men earned more than their fathers at a similar age. The researchers also found that the decline in the ability of children to earn more than their parents was greatest in the Midwest, where decades of deindustrialization have had their most devastating social impact.

The economists concluded that even rapid economic growth would do little to reverse the downward trend because of the immense and ongoing growth of social inequality.

The authors of the study described their findings as a harsh verdict on the strength of what they called “the American dream.” In fact, their own findings add to a mass of social indices demonstrating that the much-vaunted but largely mythical “American dream” has turned into a nightmare. To the extent that this term, promoted to encourage illusions in American capitalism, ever corresponded to social reality, it was largely in connection with the belief that each young generation would enjoy a better standard of living than the one that preceded it.

Just last week, the federal Centers for Disease Control and Prevention (CDC) reported that overall life expectancy in the US declined for the first time in more than two decades in 2015. The fall reflected rising death rates for a variety of diseases, an increase in unintentional injuries, accelerating suicide rates and an increase in infant mortality.

Earlier this year, a group of Harvard researchers reported that there was a 15-year life expectancy gap between men in the richest one percent of the population and those in the bottom one percent. Another reflection of the social crisis is the CDC’s finding that deaths from heroin overdoses surpassed gun homicides in 2015, while total annual deaths from all opioid overdoses quadrupled between 1999 and 2015.

The study on pay noted that the sharpest drop in the percentage of young adults earning more than their parents occurred from 1970 to about 1992—from 92 percent to 58 percent. The percentage stabilized for about a decade and began to fall again beginning in 2002.

There is a direct correlation between this downward trajectory in living standards and the decay of American capitalism. The 1970s was the decade when the unraveling of the post-World War II economic boom and the erosion of the dominance of American industry found open expression in the collapse of the Bretton Woods monetary system in 1971 and the growing share of global markets, including the US market, captured by rivals such as Germany and Japan.

At the end of the decade, the American ruling class initiated a major shift in its class policy, terminating the postwar period of relative class compromise and launching a class-war offensive aimed at breaking the militant resistance of the working class and reversing its previous social gains. A wave of plant closures and mass layoffs that began under the Democratic Carter administration was intensified under Reagan, who used the growth of unemployment along with union busting and wage cutting, made possible by the betrayals and collusion of the unions, to drive down working-class living standards.

This ruling-class offensive has continued ever since, under Democratic no less than Republican administrations. The pace of decline in working-class living standards slowed somewhat in the 1990s, with Clinton presiding over a transient upward trend in economic growth based on the removal of virtually all restraints on financial speculation and parasitism. The resulting dot.com bubble imploded in 2000, fueling a new wave of mass layoffs and wage cutting under both the Bush and Obama administrations. This offensive was stepped up in response to the Wall Street crash of 2008.

It is this social catastrophe, rooted in the decline of American capitalism, that underlies the political crisis of both big-business parties in the 2016 election and the victory of Trump—the personification of the economic, political and moral decay of the American ruling class.

The election was dominated by the growth of popular anger and disgust with both parties and the political and economic status quo. The broad popular support, particularly among young people and workers, for the Democratic primary campaign of Bernie Sanders, who presented himself as a “socialist” opponent of the “billionaire class” and social inequality, reflected the initial stages of a movement of the working class to the left. Sanders worked to channel this opposition behind the Democratic Party, culminating in his endorsement of and campaign for Hillary Clinton.

Clinton’s campaign, the most right-wing in modern Democratic Party history, focused on scandalmongering against Trump and warmongering against Russia. She was broadly backed by Wall Street and the CIA and ran as the continuator of Obama’s supposed economic “recovery.” She utilized racial and gender politics to portray “white working class” support for Trump as motivated by racism and sexism and distract attention from the ongoing growth of social inequality and impoverishment of broad layers of working people.

In an election where the two candidates vied for the distinction of being the most despised presidential contenders in US history, and the biggest bloc of voters were those who saw no reason to vote, Trump was given a free path by the Democrats and Sanders to exploit the economic grievances of workers and middle-class people whose living standards had been devastated by the policies of both parties.

Both the Obama administration and the Clinton election campaign were the outcome of nearly five decades, beginning at the end of the 1960s, during which the Democratic Party has repudiated any connection to policies of social reform and moved ever more sharply to the right.

It will not take long for workers, including those who voted for Trump, to realize that they have been taken for a ride and face in his administration the most ferocious enemy of the working class. His cabinet of billionaire reactionaries and warmongering generals already makes clear that his will be the most right-wing, anti-working class government in US history.

Trump’s policies of social counterrevolution and war will do nothing to resolve the underlying crisis of American and world capitalism. They will only exacerbate the social crisis. The working class will face immense shocks in the coming months. It will move into struggle against a government that is preparing an unprecedented level of state repression in defense of the corporate-financial elite.

The interests and needs of the working class can find no expression within the existing political system. The defense of democratic and social rights must assume the conscious form of a socialist political movement of the working class against the capitalist system.