Brazil’s markets plummet amid corruption charges against president

Bill Van Auken

Shares on Brazil’s principal stock market plummeted 10.47 percent in the first minutes after opening Thursday, triggering the so-called automatic “circuit breaker,” halting trading for the first time since the global financial meltdown of 2008.

The panic selling in the financial capital of Sao Paulo was driven by the dramatic intensification of the country’s political crisis, with both President Michel Temer and his principal political ally, Senator Aecio Neves, leader of the right-wing PSDB (Brazilian Social Democracy Party), directly implicated in the protracted Operation Car Wash corruption scandal.

The country’s media giant O Globo reported Wednesday night that, as part of a plea bargain deal, a prominent business executive had turned over tapes to the country’s Supreme Court. The tapes record Temer expressing his support for the payout of hush money to imprisoned politician Eduardo Cunha, and Neves soliciting 2 million reais (nearly $600,000) to pay for his own defense against corruption charges.

According to O Globo, the tapes, made secretly last March, record Joesley Batista, the CEO of JBS, one of the world’s largest meatpacking companies, telling Temer that he is making monthly payments to Cunha, the former head of the lower house of the Brazilian congress who was jailed on multiple corruption charges, to keep him from exposing others involved in the sprawling bribery and kickback scandal centered around the state-run oil company Petrobras. Temer is reportedly heard on the tape telling Batista, “You’ve got to keep this up, OK?”

Cunha, a member of Temer’s Brazilian Democratic Movement Party (PMDB), was the initial architect of the impeachment of Workers Party (PT) President Dilma Rousseff that brought Temer to power. He was also the nexus of the vast bribery operation that has implicated virtually every party in Brazil, including the PT.

Temer delivered a brief speech Thursday afternoon, declaring, “I will not resign, I repeat I will not resign.” He claimed to have “nothing to hide” and demanded a “full investigation and a rapid clarification of matters for the Brazilian people. This situation of uncertainty cannot go on for a long time.”

He went on to warn that the revelation of the “secretly recorded conversation” threatened to intensify the country’s political crisis to an unprecedented level, rendering the “immense effort to pull the country out of recession” useless. “We cannot throw into the garbage can of history so much work done for the country,” he said.

Temer was referring to the social counterrevolution that his government has embarked upon since taking office following Rousseff’s impeachment. Deepening the assault on the social rights of the working class already begun under the PT and Rousseff, the government has brought before congress a sweeping pension reform that drastically increases the age of retirement, slashes benefits, increases workers’ contributions and forces them into private retirement plans. This has been accompanied by a “labor reform” that would strip workers of their rights by scrapping restrictions on part-time work and outsourcing and allowing unions to negotiate away rights protected under the country’s labor code.

Both pieces of legislation were meant to open up a wholesale agenda of austerity measures aimed at placing the full burden of Brazil’s deepest economic crisis in a century squarely on the backs of the Brazilian working class.

Unemployment now stands at record levels, with more than 14 million officially listed as jobless. The real figure is likely closer to 25 million when those who have given up looking for work are included. Workers’ family incomes, meanwhile, has fallen by more than 10 percent since 2014.

Despite these increasingly desperate conditions for the masses of Brazilian workers, the corporate and financial media and big business politicians have hailed a supposed turnaround in the country’s economy, based in large measure on the enthusiastic response of the stock markets and international finance capital to the apparent progress made by Temer in pushing through his attacks on pensions and labor laws.

Thursday’s market sell-off reflected fears that implementation of these measures will now be impeded by the mushrooming political crisis enveloping every layer of Brazil’s ruling political establishment.

Senator Ricardo Ferraço (PSDB), who was in charge of drafting the labor law, confirmed Wall Street’s and Brazilian finance capital’s fears Thursday, saying that Temer’s “reforms” were being placed on hold.

“The institutional crisis we are facing is devastating, and we need to prioritize finding a solution,” the senator said in a statement. “Everything else is secondary now.”

Meanwhile, Brazil’s Supreme Court suspended Aecio Neves from his Senate seat Thursday as federal police raided his multiple homes in Rio de Janeiro, Belo Horizonte and Brasilia. The court failed to grant prosecutors’ requests for a warrant to arrest Neves, who lost the 2014 presidential election to Rousseff by a thin margin. Federal police did, however, arrest both his sister and his cousin in Belo Horizonte for their role in taking the money from the meatpacking executive.

Even before the latest revelations, Temer’s approval rating stood at barely 9 percent, with large sections of the population seeing his presidency as wholly illegitimate. He has appeared largely indifferent to this popular hostility, however, seeing his real constituency as Brazilian and international big business and finance capital.

If he were to resign, or be impeached in a process that could drag on for months, under the Brazilian constitution, it is the Congress that is charged with an indirect election of a successor to serve out the remainder of the presidential term until after the October 2018 presidential election. This body is just as discredited as the presidency, with 39 representatives and a third of the Senate under investigation in the bribery scandal. Rodrigo Maia, the right-wing chairman of the lower house of Congress and next in the line of succession after Temer, the former vice president, is accused of soliciting campaign donations from the construction firm OAS, a major Petrobras contractor, in return for political favors.

The Brazilian unions and the pseudo-left organizations have raised the demand for a constituent assembly and direct elections. Their aim is to channel the rising anger against the entire capitalist setup in Brazil back behind the discredited Workers Party (PT) and, in particular, the candidacy of Luiz Inacio Lula da Silva, the former metalworkers union leader who occupied the presidency from 2003 to 2010. Lula is himself facing multiple trials over corruption charges. His PT government was instrumental in creating the system of corruption through its funneling of state resources to promote the growth and profits of Brazilian capitalist corporations like JBS, Odebrecht and OAS, with political payoffs coming back in return.

A return to power by Lula and the PT would mean a continuation of the capitalist austerity policies initiated by his government, continued under Rousseff and deepened under Temer. The mission of another Lula government would be to contain the growing militancy of the Brazilian working class and keep it subordinated to capitalist interests.

Productivity figures and job cuts expose Trump’s growth fraud

Nick Beams

One of the factors that led to the election of Donald Trump to the US presidency was his commitment to boost the growth rate of the US economy, striking a chord in industrial states hit by job losses and factory closures.

Just four months into his presidency these promises lie in tatters. Underlying US economic trends continue to worsen, amid increased financial parasitism. The announcement by Ford that it will cut 10 percent of its global workforce is an expression of this process—the ruthless and relentless demands by finance capital for job destruction and cost-cutting to boost “shareholder value.”

The Ford decision is only one manifestation of the parasitic processes in the US and major economies internationally. Some of the effects were highlighted in the results of research conducted by the Conference Board think tank published in the Financial Times earlier this week.

Labour productivity in the US—one of the main drivers of economic expansion—will rise this year by only one-third of the rate that prevailed before the financial crisis of 2008. While the expected increase for 2017 is 1 percent, compared with an increase of only 0.5 percent last year, it is still well below the level of 2.9 percent recorded between 1999 and 2006.

Trump said his policies of lower taxes and deregulation would lift growth in US gross domestic product (GDP) to at least 3 percent, compared with its present level below 2 percent. But their only real effect, if enacted, will be to shovel more money into the hands of the financial elites.

The prospects for growth are no better in the longer term. Even barring the eruption of another crisis, the Congressional Budget Office estimates that the potential growth for the US economy is 1.9 percent from 2012 to 2017, compared to average annual growth of 3.1 percent from 1981 to 2007.

Conference Board chief economist Bart van Ark told the Financial Times: “Even an optimistic productivity scenario would not get close to the Trump administration’s target of 3 percent GDP growth.”

The US figures are part of an international trend. According to the Conference Board, the European Union will experience an increase of 1.1 percent in productivity for 2017, up from 0.8 percent last year, but well below the 1.9 percent level in the years before the financial crisis.

Japan is expected to record a 1.1 percent growth in productivity, up from 0.5 percent in 2016, but less than half the pre-crisis rate.

Commenting on the data, van Ark said the weakness in productivity reflected the impact of the global financial crisis on business investment and the “sluggishness by which new technology has been translated into faster productivity.” Companies would need to lift rates of investment to keep productivity and growth rising. Now was the time to make the investments planned for a long time.

Such expressions of hope run counter to the dominant trends in the US economy and elsewhere. The days when companies used profits to make new investments and expand production, giving rise to economic growth and improved wages, have long gone.

The road to increased profits is now savage cost-cutting in order to free up cash, which is then disbursed to shareholders—predominantly banks and hedge funds—in the form of increased dividends and share buybacks. And those firms deemed by financial markets not to be sufficiently engaged in this process come under intense pressure to change course.

As one recent Australian study noted, financial institutions exercise their power not primarily by holding directorships but “through exit”—the continual threat of withdrawal of funds if the rate of return is not sufficient. Managements, which in an earlier period were concerned with expanding and growing a business through productive investment, must now carry out the dictates of financial markets to strip resources from the firm or be removed.

The Trump administration’s claims that it will boost jobs have also been shattered by figures coming from the retail sector.

According to a report in the Financial Times on Monday, since the election of Trump last November, the retail sector has lost 89,000 jobs—more than the total employment in either coal mining or steel—with more to come. The article began: “Anyone seeking the contemplative peace of a graveyard could do no worse than park at one of America’s strip malls.”

By some estimates, the US retail sector could lose up to one third of its 16 million jobs within Trump’s term, on a par with the scale of job losses in manufacturing industry since the turn of the century.

The job shedding is the result of two factors. First, there is the general stagnation of consumer spending, flowing from the suppression of wages and rising household debt. The US economy grew at an annual rate of only 0.7 percent in the first quarter of this year, largely as a result of the weakest increase in consumer spending in seven years.

Second, there is the impact of online buying or ecommerce, epitomised by the rise of Amazon.

Amazon’s business model is not based on general economic expansion but at driving more traditional outlets to the wall, resulting in major job losses. In earlier times of general economic expansion, the job losses would have been offset by the growth of employment opportunities in other areas of the economy. But this is not taking place.

It is estimated that for every three retail jobs lost, only one is created in ecommerce. Those displaced from the retail sector are either moving out of the workforce altogether or into lower paid and more precarious jobs in other service industries.

It is this essentially parasitic business model that has made Amazon such a darling of the financial markets.

Over the past 20 years its shares have risen almost 64,000 percent—$100 invested in Amazon stock at the time of its initial public offering would have accumulated to $64,000. Amazon’s market value is now more than $450 billion, compared to $230 billion for Wal-Mart.

The rise and rise in Amazon’s market value, unlike the rise of the giants of a previous era, is not an expression of economic strength. Rather, it is a manifestation of the parasitism, based on an appropriation of real wealth produced elsewhere, that has become the mainstay of profit accumulation in the US economy, and increasingly globally.

Technological innovations in transport and information systems have fueled this rise. But they are not utilised to facilitate economic growth, but rather to enable the sucking up of wealth into the coffers of finance capital.

Trump administration education budget proposes $10.6 billion in cuts

Shelley Connor 

Documents obtained earlier this week by the Washington Post outline the Trump administration’s first Department of Education (DoED) budget detail plans to dramatically slash federal funding for public education.

Among the most egregious measures included in the proposal is the complete elimination of a student loan forgiveness program designed to help teachers, social workers, and other public servants with their student debts.

The proposed budget takes aim at student borrowers in other ways, as well. For example, it would eliminate over $700 million in Perkins Loans for disadvantaged students. The budget would also reduce funding for the work-study program, which allows students to work their way through college, by $490 million. And it would put an end to subsidized federal loans, in which the government pays the interest on the loan while the student is still attending school.

Another cut affecting low income college students would eliminate a $15 million program that provides childcare for low-income parents attending college. Funding for Pell Grants, based upon student need, would be maintained—but it would not be increased to meet the needs left by cuts to the Perkins Loan program. An estimated 12 million Americans depend upon financial aid to help with college; these cuts will affect them profoundly.

In K-12 education funding, 22 programs would be eliminated. Among these are a $1.2 billion program for after school programs. These programs serve almost two million children, most of whom are from poor families. Other cuts include $2.1 billion for teacher training and class-size reduction, a $12 million program for gifted students, $12 million allocated for Special Olympics programs, a $27 million arts program, $72 million allocated for foreign language and international studies programs, and $65 million allocated to programs for Alaskan and Hawaiian Native populations.

While other programs will continue, their funds will be cut significantly. Promise Neighborhoods, an initiative designed to support children in impoverished communities, would lose $13 million. An adult literacy program would lose $96 million. Grants for career and technical education would be cut by $168 million; paired with the cuts to college financial aid, such cuts will drastically reduce options for a significant number of students who wish to pursue either a university degree or a career in the skilled trades.

The Trump administration budget also dedicates no money to a fund earmarked for student enrichment and support. This fund assists schools with mental health services, physical education, Advanced Placement courses and Science, Technology, Engineering, and Mathematics (STEM) instruction. While Congress authorized up to $1.65 billion for the fund, the Trump administration has budgeted zero dollars for the fund in the next fiscal year.

Title I funds, which help poor children, and special education funding will neither be increased nor cut by the budget. Yet while the budget does not explicitly cut these programs, impoverished schools will likely still see a reduction in Title I funding; new laws allow states to spend up to 7 percent of their Title I funding upon school improvements before they disburse the funds to qualifying districts.

In addition, the budget would channel $1 billion of Title I funding to a new grant program. FOCUS, or Furthering Options for Children to Unlock Success, would channel these grants to school districts that allow families to choose which public schools their children attend—the federal, state, and local funds set aside for those children would travel with them to the new school they choose. In such a way, Title I money, along with other school funds, will migrate into wealthier districts at the expense of the districts for which the program was designed.

As the budget makes brutal cuts to public education spending, it allocates $500 million for charter schools—this represents an increase of 50 percent over the current charter school spending by the federal government. Another $250 million will be spent on “Education Innovation and Research Grants,” which would be dedicated for expanding school vouchers for private schools and for studying the impacts of these vouchers. Thus far, the budget does not clarify how much of the $250 million would go towards the studies as opposed to the actual vouchers.

Altogether, the proposed budget cuts $10.6 billion from public education. At the same time, $158 million is proposed for salaries and expenses at the DoED; among these expenses are expanded student loan “servicing” (i.e., collections) and increased security for education secretary Betsy DeVos, who spurned the in-house security team, contracting instead with the US Marshals.

In the meantime, the entire DoED will see workforce reductions of about 4 percent; about 150 positions will be scrapped by the proposed budget.

This budget demonstrates Trump and DeVos’ well-documented disdain for public education. DeVos has previously characterized federally-funded public education as “arcane” and ineffective; she has also headed an organization, the Acton Institute, that advocated for the repeal of child labor laws. The Trump administration’s budget proposal is but a first, coordinated attack upon public education while benefiting the privatized school companies, for whom George W. Bush and Barack Obama opened the door, at the expense of quality education for working class children—and most especially for impoverished children.

French government prepared coup if Le Pen won presidential election

Alex Lantier

According to an extraordinary report published yesterday in L’Obs magazine, top members of France’s Socialist Party (PS) government prepared to launch a coup d’état if Marine Le Pen of the neo-fascist National Front (FN) won the May 7 presidential run-off.

The purpose of the coup was not to keep Le Pen from taking office. Rather, it was designed to crush left-wing protests against Le Pen’s victory, impose martial law, and install Le Pen in power in an enforced alliance with a PS-led government.

“No one dared imagine what would happen the day after the run-off if Marine Le Pen won. A social explosion could be expected,” wrote L’Obs. It explained, “The strategists who conceived this plan B supposed that after the National Front victory, the country would be on the verge of chaos: state of shock, Republican demonstrations, but above all extreme violence, especially coming from the ultra left.”

“The plan was never written down black on white, but everything was really ready,” L’Obs wrote. “Its execution was so precisely planned that a handful of members of the government, chiefs of staff, and top state officials can still describe it from memory, step by step. … To be sure of the details, L’Obs verified its report with three different sources in the outgoing government and in institutions of the state.”

The plan reportedly entailed launching massive police operations to put France on lockdown, and a PS power grab set into motion by a refusal of Prime Minister Bernard Cazeneuve to step down. A top state official involved in the plan told L’Obs, “The country would have been totally shut down. The government would have had only one priority: ensuring the security of the state.”

To be clear, this signifies the imposition of a police-military dictatorship in France. Basic democratic rights are already suspended under the terms of the PS government’s state of emergency, which has been perpetually extended since it was first imposed after the November 13, 2015 terrorist attacks in Paris. Police are authorized to arbitrarily detain individuals, ban protests and consign individuals to house arrest. The plan clearly entailed the full use of these powers to impose martial law and permanently suspend the normal functioning of the state.

Police authorities in each of France’s 100 departments had been in contact with the Interior Ministry to prepare for a post-election crisis. These discussions indicated that police were “afraid” of the situation after a Le Pen victory, L’Obs writes, citing a domestic intelligence memo already reported in Le Parisien: “Far-left movements that are more or less rooted in the population will doubtless try to organize protests, some of which could lead to serious disturbances.”

As these discussions were unfolding, L’Obs reports, police officials and police trade unions were demanding total freedom to use potentially deadly weapons against protesters, apparently including stun grenades and rubber bullets. “The instructions given not to use one or another weapon have become intolerable,” wrote one police trade union official.

Within the state machine itself, Cazeneuve’s refusal to step down was intended to “freeze the political situation,” according to one of the sources of L’Obs and, exploiting a loophole in the French constitution, launch a constitutional coup against the newly elected president.

“At first,” L’Obs writes, “it was planned that the head of government would not submit his resignation. Of course, for a prime minister to remain in his position is contrary to Republican tradition, but his resignation is not in fact imposed by the constitution. In the next step, the parliament would be assembled in extraordinary session. A date was even chosen: May 11. The agenda would have been the national crisis provoked by the violence that followed the elections. The deputies would have been asked to give the government a vote of confidence.”

In short, the National Assembly would have been told to give a pseudo-legal stamp of approval to a coup hatched by the police and intelligence services behind the backs of the French people. This transitional government was to last as least as far as the legislative elections of June 11 and 18, assuming that the new authorities would have allowed those to proceed.

What L’Obs is describing would have been the most serious suspension of normal democratic procedures in France by the security forces since the Algerian war, when officers loyal to the Algerian colonial lobby seized power in Algiers in May 1958. They then launched a coup, Operation Resurrection, to topple the government in Paris. General Charles de Gaulle stepped in, seized emergency powers and ordered his supporters to hastily rewrite the French constitution, laying the basis for France’s current Fifth Republic.

The media silence on this report in L’Obs yesterday evening was deafening, even though the magazine is a well-respected publication, and there is little reason to doubt its reporting. However, the report has the most far-reaching political implications and immediately raises serious questions about the administration of incoming President Emmanuel Macron.

Are there other scenarios besides the election of Le Pen in which the police and intelligence agencies would suspend constitutional rule and impose martial law?

If the Interior Ministry now treats as existential threats all left-wing protests at which violence might occur—whether by protesters or by police provocateurs—are similar plans being made to repress protests that will erupt against Macron’s policies, whether on war or social austerity? Will police react to constitutionally protected rights to strike and protest with attempts to suspend constitutional rule and install a dictatorship?

The quarter century of relentless austerity in France and across the European Union (EU) since the Stalinist dissolution of the Soviet Union has profoundly transformed European capitalism. As economic inequality and social anger reach unprecedented levels, the old political and social relations are breaking down. The brutal repression of protests against the unpopular PS labour law, imposed without a parliamentary vote amid the longest-running state of emergency in France’s history, is a sign that French democracy is in an advanced state of collapse.

Under these conditions, the attempts to downplay the significance of the L’Obs story by PS officials contacted by the magazine, as well as by L’Obs itself, are complacent and false. Their assurances that the planned operation was constitutional and would have rapidly led to a restoration of the normal functioning of the Fifth Republic are not worth the paper they are printed on.

Outgoing PS Prime Minister Bernard Cazeneuve himself has given credibility to the L’Obs story of a coup plot by the PS, as he said he had “no intention to desert the front at Matignon [Palace, the prime minister’s residence] if Marine Le Pen won the presidential election.” Contacted by L’Obs about the coup plot, his staff said he had “never ever mentioned such a plan” to them.

As for L’Obs itself, it insisted that the coup plan was constitutional. Taking as good coin the coup plotters’ assurances that they would have handed over power, the magazine concludes that it would have led to a “brief interim period without precedent in the history of the Republic.”

In fact, if the police-intelligence apparatus attempted to put such plans into effect, they would be openly breaking with the constitutional order and paving the way for an even more extended break of the ruling class with democratic forms of rule. It would be a prelude to a violent confrontation with the working class, where there is still a profound commitment to democratic rights.

Fund managers earned billions in 2016 even as hedge funds underperformed

Shelley Connor

A report published this week in Institutional Investors’ Alpha Magazine reveals that hedge funds in 2016 hemorrhaged investors, who took with them an estimated $70 billion from the $3 trillion hedge fund industry. Despite this multi-billion dollar exit, hedge fund managers continued to enjoy extraordinary compensation; the 25 top earning hedge fund managers pocketed a combined total of $11 billion last year.

James Simons, a former National Security Agency (NSA) code cracker and the head of Renaissance Technologies, made about $1.6 billion. Bridgewater Associates founder Ray Dalio brought in $1.4 billion. Robert Mercer, Renaissance Technologies’ co-chief executive and one of the biggest contributors to Donald Trump’s presidential campaign, earned $120 million.

Hedge funds have consistently yielded disappointing returns over the past eight years, even as the stock market as a whole has thrived. Some managers only brought in single-digit returns for their investors last year; some lost billions of dollars. Many investors shut down and offloaded their funds at the fastest rate since the 2008 financial crisis.

Hedge fund managers’ compensation, however, has continued to soar over the past decade. Even though the top 25 hedge fund managers earned less in 2016 than they did in 2015 (when they collectively earned $13 billion), the total is still more than double what the top earners in 2000 made, the first year that Institutional Investors published its list.

The lowest ranking manager among top-50 richest managers made more money in 2016 than any bank executive, including the executives of J.P. Morgan and Goldman Sachs.

Many of the hedge fund managers on Alpha’s top 25 and top 50 lists actually posted subpar returns. Among these is Kenneth C. Griffin, a major Republican donor, who netted his investors returns of just 5 percent in 2016. He earned $600 million. Daniel Loeb of Third Point finished the year with an income of $260 million, even though he made his investors just 6 percent.

Hedge fund managers are able to make such exorbitant paychecks, regardless of whether their investors make money or lose it, because of what is known as the 2-and-20 fee system. Hedge funds generally charge their investors 2 percent of their investments annually, irrespective of the investments’ performance. In this way, whether their investors lose, break even, or make a profit, managers have an enormous guaranteed income. When an investment makes a profit, the hedge fund manager typically commands 20 percent of the earnings.

John Paulson, the hedge fund manager who reaped a windfall by betting on the collapse of the housing market in 2008, called 2016 “the most challenging year.” Paulson has earned $15.45 billion since 2000, yet he was bumped off of Institutional Investors’ top hedge fund managers’ list because of double digit losses last year. Other hedge fund managers, citing “industry headwinds,” closed their doors last year. Wild swings on the stock market, such as occurred after Donald Trump’s election and Britain’s vote to exit the European Union, caused other wary hedge fund managers to withdraw from the business.

Many of the managers who persisted in 2016, including some of those on Institutional Investors’ list, were able to continue bringing home their outrageous earnings by negotiating fees and percentages with nervous investors. Despite this, they earn significantly more in a year than the average American ever will, even after a lifetime of work.

The hedge funds that managed to make a profit last year are worth noting. Renaissance Technologies, worth about $42 billion, employs cryptographers, physicists, and even astronomers to analyze massive amounts of data that the company uses to inform investment choices. Founded by the former military and NSA codebreaker Simons, the firm jealously guards the precise details of its investment analysis and strategy. The company was able to maintain profits for its investors, in both domestic and foreign equities, even as other hedge funds teetered in the wake of Brexit.

Hedge funds have garnered distaste, wariness, and outrage amongst the public, which politicians have leveraged to their advantage. Scott M. Stringer, the New York City comptroller, accused hedge fund managers of collecting fees “without adding value.”

New York City pension funds were, in many cases, withdrawn from hedge funds last year, although Stringer added about $170 million in police and firefighter pension funds to hedge funds. The comptroller’s office requested that the remaining hedge fund managers lower their cut of the investments and waive their management fees.

President Trump played upon the public’s outrage at hedge fund managers in his presidential campaign. Trump accused hedge fund managers of “getting away with murder” and vowed to close the loopholes that allow them to pay lower taxes. His proposed tax plan, however, does nothing of the sort. To the contrary, while it closes the “carried interest” loophole, it lowers the income tax rate on profits earned by investment managers.

The contradictions rife in any serious look at hedge funds--underperforming investments coupled with outrageously high earnings for managers--highlight the seething ferment of the global capitalist crisis.

Workers worldwide face greater and greater uncertainty about wages, food security, and health care access. The stock market remains highly volatile, subject to upheavals in the face of geopolitical tensions. Yet hedge fund managers continue to “earn” exorbitant fees, betting on risky ventures with workers’ retirement accounts.

The disgruntlement among investors concerning hedge funds further reveals the tensions amongst the numerous parasitic layers of the bourgeoisie and the upper middle class, who fight, not for the responsible spending of workers’ 401ks and pensions, but for their own cut of profits in the face of diminishing returns.

Stringer rightly accuses the top-earning managers of earning massive profit without adding value, but he fails to recognize that the only real value rests in what workers produce--and when workers have been reduced to poverty by declining wages and by unemployment, the ever rising value of the stock market is illusory.

Both the lackluster performance of hedge funds and the obscene wealth of their managers underscore the illusory nature of the stock market’s performance. They also signify the need, greater, perhaps, than at any time in history, for workers to unite internationally to wrest the value produced by their labor away from the Wall Street gamblers and the politicians who cater to them.

Macron names government to implement social counterrevolution in France

Francis Dubois

Prime Minister Edouard Philippe, named May 15 by newly elected French president Emmanuel Macron, made public his cabinet choices yesterday. It is a government in which all the dominant factions of the political establishment, particularly the so-called moderate wings of the Socialist Party (PS) and The Republicans (LR), come together to prepare a social counterrevolution.

The presentation of the cabinet had been delayed 24 hours to make certain that none of the nominations would embarrass Macron, who has pledged to “moralise” public life and end tax evasion by officials. He wants to give a veneer of legitimacy to his policies, which continue and intensify those of his discredited Socialist Party predecessor, François Hollande: austerity, war and attacks on democratic rights.

The strategic ministries (the interior, foreign affairs, defence, justice and economy) will be occupied by longstanding pillars of the political establishment and proponents of the policies implemented in France under right-wing President Nicolas Sarkozy of LR or Hollande and the PS.

In the second round of the presidential elections, a race between Macron and neo-fascist Marine Le Pen, the Parti de l’égalité socialiste (PES) stressed that workers could not stop the rise of militarism and police state rule by voting for Macron, whose programme was profoundly reactionary. The PES proposed instead an active boycott to arm workers with an independent, revolutionary and socialist perspective for the struggles against Macron that were to come.

The team presented by Macron and Philippe confirms this analysis of Macron’s presidency against all those, like Jean-Luc Mélenchon or the New Anti-capitalist Party, who signaled their sympathy for arguments that voters should pick Macron to block Le Pen. The new government is preparing imperialist war abroad and class war against the workers at home.

At the beginning of the week, Macron announced that Patrice Strzoda, the former chief of staff of PS Interior Minister Bernard Cazeneuve, would be his own chief of staff.

Strzoda organised the brutal police repression of protests against Hollande, including the systematic and deadly use of “flash-ball” rubber bullets. As prefect in Brittany from 2013 to 2016, he oversaw the police operations and the use of assault grenades that in 2014 cost the life of ecological protester Rémi Fraisse. His nomination is a sign that Macron and Philippe will stop at nothing to repress the explosive opposition that their policies will provoke.

Jean-Yves Le Drian (PS) is France’s new minister of foreign affairs. As defence minister under Hollande, he played a critical role in French imperialism’s aggressive policy in Syria and Africa, and against Russia as part of the NATO alliance. He also supervised the deployment of the army on French soil in the context of the prolonged state of emergency, which suspends basic democratic rights.

According to press reports, Le Drian worked closely with Hollande to identify and approve targets of the PS’s “homicide operations.” These extra-judicial murders, “targeted assassinations,” including of citizens, were carried out by the French state abroad in flagrant violation of the French constitution, which forbids the death penalty. His chief role in a new government will be to carry out the reorganisation and remilitarisation of European foreign policy, carried out in close collaboration with Berlin.

Gérard Collomb, the PS mayor of Lyon, is now interior minister. He is a founding member of the PS. According to Luc Rosenzweig, a former journalist at Le Monde and Libération, Lyon under Collomb—due to the close collaboration between the PS and business circles—was “a laboratory of Macronism even before Macron tried to play in the big leagues of the political arena.” After the November 13, 2015, attacks in Paris, Collomb decreed the arming of Lyon’s municipal police.

Another pillar of the political establishment, right-wing politician François Bayrou of the Democratic Movement (MoDem), is now justice minister. Bayrou has regularly been a minister of reactionary governments since the 1980s. A practising Catholic, he tried as education minister to introduce a law that would allow stepped-up financing of private schools. In 1994, nearly a million protesters marched to oppose this plan.

He will be tasked with implementing Macron’s “zero tolerance” plan, which includes 15,000 more prison berths, increasing the number of youth detention centres and toughening sentences for petty crime, including with the introduction of so-called immediate fines levied by police.

The defence ministry has been given to Sylvie Goulard of Bayrou’s MoDem, who has close ties to the European Union after advising European Commission chief Romano Prodi between 2001 and 2004. She is charged with implementing Macron’s militarist programme, including increasing military spending to 2 percent of GDP and reintroducing the draft.

Macron has done everything to indicate that preparing for war and supporting the army are among his highest priorities, traveling down the Champs-Élysées on his inauguration day on a military vehicle. He will participate in the NATO summit in Brussels on May 25 and visit, either today or tomorrow, French troops deployed in Mali and the broader Sahel zone in Africa.

The new labour minister, Muriel Pénicaud, is close to Macron. She was the CEO of many major public and private French enterprises. The Voix du Nord daily called her “the salesman of France to foreign investment.” She has the job of coordinating Macron’s attempts to attract foreign investment via historic attacks on wages, employment and social spending based on massive deregulation.

Pénicaud will supervise the destruction of the Labour Code announced by Macron, based on Hollande’s deeply unpopular labour law, imposed without a vote in parliament and after the harsh repression of protests against it.

India-Sri Lanka: A Grim Tale of Economic Cooperation

Husanjot Chahal


On 11 May, Prime Minister Narendra Modi visited Sri Lanka to attend the International ‘Vesak Day’ celebrations, just two weeks after Sri Lankan Prime Minister Ranil Wickremesinghe’s five-day visit to New Delhi. PM Modi’s visit marked the 7th interaction between the Indian and Sri Lankan heads of state since 2015, which is suggestive of vigorous high-level political engagement. This political activism has mostly aimed at enhancing bilateral relations through increased economic, investment, and development cooperation. Even though the need for engagement has remained strong, in practice, very little has been achieved on the economic front. Given the current trajectory, even less is expected to materialise on the ground. 

Cumulatively, the only significant economic arrangement realised by India and Sri Lanka in the past two years is the ‘Memorandum of Understanding (MoU) for cooperation in economic projects’, signed recently during PM Wickremesinghe’s visit to India. Media reports and official interviews, prior to his visit, highlighted the likelihood of an India-Sri Lanka deal for the development of the Trincomalee area as a regional hydrocarbon hub in the Bay of Bengal and eastern Indian Ocean. What ensued instead was the MoU – essentially in the nature of a “roadmap for the future.”

Apart from outlining a few broader agendas (on the development of the transportation sector, agriculture and livestock, etc), the roadmap sketched out agreements in the power sector (a 50MW Solar Power Plant in Sampur, a regasified 500MW LNG Power Plant, an LNG Terminal/Floating Storage Regasification Unit in Colombo/Kerawalapitiya). With Sri Lanka facing an acute power crisis, the emphasis on energy projects is no surprise. The spotlight on the proposed joint venture to develop the World War II-era oil storage facility in Trincomalee remains. While listing agendas, however, the roadmap remains oblivious to past trends and current realities.

The history of Indian involvement in Sri Lanka’s power sector provides a grim picture held back by domestic political concerns and a sluggish bureaucracy. For instance, the Sampur power plant, originally proposed as a coal-based project, has been in the pipeline since 2006 and still awaits execution. It has witnessed a series of delays for various reasons, including repeated requests by Colombo to change the location of the project due to changes in local socioeconomic conditions, mainly related to resettlement of Tamil families displaced by war. With most of the resettlement work still remaining, any new venture in Sampur will have a guaranteed pool of opposition from at least one section of the Lankan population. 

A major roadblock for Indian economic engagement in Sri Lanka is, and has been, the prevailing trust deficit amongst its people vis-à-vis India. There have been negative perceptions about India’s role on the island; for instance, with regard to tying “their only supply of cooking gas or petroleum” to New Delhi’s geopolitical games. The April 2017 strikes by the workers of the Ceylon Petroleum Corporation (CPC) against the joint development of the Trincomalee oil farms serves as another instance indicating entrenched resistance to economic cooperation with India. The fact that it practically prevented PM Wickremesinghe from signing the Trincomalee deal during his India visit, followed by President Sirisena’s official assurance that no deals would be signed during PM Modi’s visit to Sri Lanka, indicates the political strength of such resistance.

With particular reference to Trincomalee, besides tackling apprehensions, there is a serious need to address stakeholder concerns about project ownership and operation. In 2003, as part of an MoU signed by the CPC and the Indian Oil Corporation (IOC), India’s oil subsidiary in Sri Lanka - Lanka IOC (LIOC) - obtained a 35-year lease to develop the China Bay (Trincomalee) tank farm, with a total of 99 tanks. However, implementation of the MoU was marred with reservations expressed by the CPC on the procedural aspects of implementation and against providing exclusive right to LIOC to run the installation. Due to internal political reasons, the lease agreement was not implemented in totality, such that LIOC has been able to use only 14 tanks in the lower farm area, and the remaining 84 are unused. 

The Common Workers Union (CWU) of the CPC alleges that since the lease agreement had to be signed within a period of six months, and was not signed, it is not legal. On the other hand, while speaking about the recently signed MoU, India’s Ministry of External Affairs has been clear in stating that Lanka IOC has had the rights to develop the tank farm since 2003, and the agreement to now develop the upper tank farm as a joint venture comes in light of “our spirit of partnership.” These differences in the narrative could be a recipe for conflict, and needs to be addressed sensitively if a fruitful partnership is intended.

The India-Sri Lanka roadmap for cooperation in economic projects is, at best, a good first step since 2015 that has come after significant initial delays. Implementing its agenda will be a complex process. Nothing short of a serious attempt to pace the process of concluding agreements, learning from past lessons, reaching out to bridge the trust deficit, and addressing stakeholder concerns in various projects, will enable forward movement.

IDB Scholarships for Muslim Communities in Non-Member Countries 2017/2018

Application Deadlines: 

• May-July: Deadline for submission to the IDB (for abroad studies)
• June to December: Deadline for submission of applications to the IDB  (for in-country studies)

Offered annually? Yes

Eligible Field of Study

• Medicine
• Engineering
• Agriculture
• Other fields related to above disciplines

About Scholarship: The objective of the Programme is to improve the socio-economic conditions and to preserve the cultural and religious identities of Muslim Communities in Non-member Countries through developing their human capital resources. The Programme provides scholarship to the academically meritorious but financially needy young Muslim students to pursue undergraduate or first-degree study in professional courses.

The concept of the Programme is to build a team of professional and committed Muslims as a tool for the improvement of the socio-economic conditions of their communities. Under this Programme, the scholarships are given as interest-free loan to the students but grants to the communities to which they belong. After graduation and gainful employment, all graduates are obliged to repay their loan amount to the community (IDB Local Trusts) for recycling and awarding additional scholarships to the local needy students.

Offered Since: 1983

Type: Undergraduate studies

Selection Criteria: Each year, the Programme follows the following selection procedures:

• The Counterpart Organization announces the Programme in the country and invites applications from potential candidates who fulfill the criteria of the Programme.
• The Scholarship Selection Committee (SSC) conducts the interviews of eligible candidates and recommends them through the Counterpart Organization to the IDB.
• The IDB makes the final selection and informs the Counterpart Organizations.

Eligibility: To be eligible for this scholarship, the student/applicant must be able to meet the following basic criteria:

• Age not over 24 years.
• Completed senior secondary / pre-university education with good grades in major science subjects and language of instruction.
• Secured admission in one of the disciplines covered under the Programme at a recognized college or university in their own countries (for in-country study).
• Not in receipt of any other scholarship.
• Committed and needy Muslim.
• Recommended by the Counterpart Organization.

Number of Scholarships: Several

Value of Scholarship: The Programme covers all relevant expenses during students’ study period, including tuition fees, health and living costs as determined by the IDB.

Duration of Scholarship: for the period of study

Eligible Countries: developing countries

To be taken at (country): Consistent with the concept of the Programme, students must get admission or be in the first year in their own countries.
On exceptional basis and where admissions in professional courses are not possible or not available in any particular country, the IDB assists to place students from these countries in IDB member countries, which have been generous enough to provide places for the IDB students in their universities.

How to Apply

In countries, where the Programme is being implemented, inquiries can be made and application form obtained from Counterpart Organization in the country.

In a country, where the Programme has not yet been implemented, inquiries may be directed to the Scholarship Division, Department of Communities in Non-Member Countries, IDB.

Visit scholarship webpage for more details

Sponsors: Islamic Development Bank

Important Notes: To help students prepare themselves for their future leading role in the development of their communities and countries, the IDB also provides them with extra-curricular activities under a special programme called Community Development Programme comprising the following three components: Guidance and Counselling Activities, Post Study Activities and Capacity Building Activities.

OSISA Scholarships for African Women Media Leaders at Rhodes University 2017

Application Deadline:  Wednesday, 1st November. 2017

Offered Annually? Yes

Eligible Countries: Angola, Botswana, the Democratic Republic of the Congo (DRC), Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe.

To be taken at (country): Rhodes University, South Africa

About the Award: OSISA is an African institution committed to the creation of open societies through support for democracy, human rights and good governance and it works in Angola, Botswana, the DRC, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe.

The PGDip in Media Management, popularly known as the PDMM, equips participants with critical knowledge, understandings and work competencies that emerging media leaders need to perform more effectively, strategically and ethically in their organizations and to fast-track their careers to management positions.

The programme combines rigorous theoretical and practical grounding. It has a mid-year practical media management internship and a comprehensive reflective academic portfolio at the end of the year.  It is composed of eight compulsory modules covering media management contexts, policy and institutions; financial management and media economics; management of media markets, audiences and advertising; management of media content; management of circulation and distribution; media management and leadership; human resources management for media; and management of digital and social media and media convergence.

Type: Postgraduate

Eligibility: Applicants should be women who are already practising journalists or are working in various fields of the media industry in Angola, Botswana, the Democratic Republic of the Congo (DRC), Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe.

Successful applicants will register for the SPI’s intensive, one-year-long fulltime Postgraduate Diploma in Media Management (PGDip in Media Management), the only formal qualification in media management in Africa and the developing world. The PGDip in Media Management is pegged at the honours degree level.

Candidates must already possess an undergraduate degree from a recognised university in order to pursue postgraduate study.

Number of Awards: Not specified

Value of Program: The OSISA scholarships cover:

• The full cost of tuition
• Accommodation and meals in one of Rhodes University’s residences
• Course materials
• A monthly subsistence allowance
• Medical aid cover
• Mid-year media management internship costs.

Employers of the successful scholarship applicants or the scholarship winners themselves have to cover their travel costs to and from Rhodes University, including during the University’s holidays, to encourage greater ownership and appreciation of the scholarship programme by the beneficiaries and their media organizations.

How to Apply: Only women candidates who are already working in the media industry in the 10 Southern African countries of OSISA listed above are eligible to apply for these scholarships. Candidates should already have an undergraduate degree in any discipline from a recognised university.

Students wishing to apply for these scholarships need to:

• Complete the Rhodes University’s standard Honours Application form (available at www.ru.ac.za/applying/  under the section ‘Postgraduate Studies’  which must be submitted directly to the Registrar’s Division at Rhodes University and a copy emailed to Wendy Dyibishe (w.dyibishe@ru.ac.za)  at the Sol Plaatje Institute.
• Submit a detailed Curriculum Vitae, including contact details, to Wendy Dyibishe.
• Submit certified academic transcripts of ALL tertiary qualifications. These are sent to both Wendy Dyibishe at the SPI and to the Registrar’s Division at Rhodes University; and
• Submit to the SPI — through Wendy Dyibishe at W.dyibishe@ru.ac.za — a 1,000-word letter of motivation which explains why the student is interested in doing the PGDip in Media Management, how the course will assist the student’s career and why the student believes she/he qualifies for the OSISA scholarship.

Visit Program Webpage for details

Award Provider: Sol Plaatje Institute (SPI) for Media Leadership, Open Society Initiative for Southern Africa (OSISA)

Young Africans Social Entrepreneurship Fellowship (YASEF) Program 2017 Nigeria Cohorts 1 & 2

Application Timeline:

• Application Opens 10th May, 2017
• Application Closes 10th June, 2017
• Applicant Admission Process and Confirmation of Participation June 11th-July 1st 2017
• Commencement of Fellowship July 18, 2017

Eligible Countries: Nigeria

About the Award: This program is looking for participants who are passionate about becoming facilitators for sustainable social change through social entrepreneurship and enterprise initiatives. We are keen on admitting participants who are determined and are seriously committed to oxygenate their social transformation vision and aspirations in their communities and nation. Interested applicants

The duration of this program will be 5 Months at the end of which the successful participants who have met all the requirements of the fellowship will be inducted as Social Entrepreneurship Fellows.

Type: Entrepreneurship, Fellowship

Eligibility: 

• Must be college Graduates
• Between the ages of 20-35 years of age
• Must have good communication skills (written, spoken English)
• Must have a compelling social entrepreneurship story or idea that has or can impact their community
• Must be willing to complete the 6 months program

Number of Awardees: Not specified

Value of Fellowship: This program is a non-residential one and it is partly funded by the partner organizations but each participant will be expected to also contribute a token commitment and counterpart fee which is 20% of the cost of the program to confirm their admission on this program.

Duration of Fellowship: 5 months

How to Apply: In addition to completing the registration form (whose link has been included below) to confirm their interest in becoming a participants on this fellowship, applicants are expected to send a page personal letter of motivation that describes their current social entrepreneurship footprints and the social transformation impact they envisioned,

Applicants who have uploaded evidences of their social entrepreneurial footprints either on instragram, facebook or uploaded videos (you tube) should also include the link for such activities to enhance the possibility of participating in this fellowship.

Register Here https://goo.gl/VWYYJZ

Visit Fellowship Webpage for details

Award Provider: African Sustainable Social Economic Transformation Support (ASSETS)