Deaths caused by Leptospirosis reported in Puerto Rico

Benjamin Mateus

Three weeks since Hurricane Maria hit Puerto Rico, relief efforts have been woefully inadequate, as cries for rapid assistance and support continue to go unheeded. Hospitals are running low on medicine, while the number of patients being admitted keeps rising. Many medical personnel have not been able to return to work. Hospital generators, used to produce electricity, are low on fuel. More than 85 percent of the island remains without electricity, 45 percent lacks running water and only limited information from remote regions is available to assess the dire conditions plaguing the island’s population.

According to the New York Times, the mayor of Canóvanas, a region in the northeast of the island, reported that several people in her city had died of Leptospirosis, a bacterial infection caught from the floodwaters. Puerto Rico usually sees about 20 to 30 cases a year, with possibly one death per year. Officials are extremely concerned about a spike in such waterborne infections.

The authorities are urging people to only drink bottled water, wear protective shoes and avoid handling potentially contaminated water or soil. Despite FEMA reporting the distribution of 7 million liters of water, there is a scarcity of clean water in rural communities, whose residents are resorting to washing and bathing in local rivers and springs. According to a story published in Metro US, in Comerío, a town in the mountainous interior, the floods destroyed the sanitation pipelines and took all the drinking water. In a town with 7,000 families, there are only two tank trucks that can distribute water to approximately 200 families per day.

As of last week, only four mobile hospitals had been set up and 10 Disaster Medical Assistance Teams have been sent in by the federal government. The USNS Comfort, a Navy hospital ship with 1,000 beds and 11 operating rooms, arrived more than a week ago, but they are still not seeing the number of patients they expected. According to the Times, the Puerto Rico Department of Health only sent 82 patients to the Comfort over a six-day period. Given the nearly complete failure of island’s infrastructure, it is not surprising that authorities have limited capacity to mobilize help for people in need of medical assistance and attention. Many of the local residents report they have yet to see FEMA.

Leptospirosis is a widespread and prevalent zoonotic disease occurring in some temperate but predominately tropical regions. The World Health Organization’s Leptospirosis Burden Epidemiology Group has estimated 873,000 cases per annum, with 48,600 deaths.

The bacterium causing the disease is a spirochete of the genus Leptospira. The disease is synonymous with Weil’s disease, Swineherd’s disease, rice-field fever, waterborne fever, cane-cutter fever, swamp fever, etc., highlighting its connection with field work in wet environments. The spirochete can infect a variety of both wild and domestic animals, especially rodents, which are important reservoirs for maintaining the transmission in most settings.

Once the rodents are infected, they shed the organism in their urine, resulting in contamination of the water and soil. The bacteria can remain viable for days to months. Human infections occur through exposure to contaminated environmental sources via cuts, skin or mucosal abrasions, conjunctiva and possibly oral ingestion.

Leptospirosis has ceased being a notifiable disease nationally since 1995, with the exception of Hawaii. In the tropics, endemic infections are related to poverty, where lack of sanitation and poor housing conditions lead to infections. Occupational exposure such as subsistence farming and living in rodent-infested and flood-prone urban slums are the main causes of infection. Large outbreaks affecting thousands occur during the rainy seasons and flooding.

Observational studies from Salvador, Brazil, noted elevated antibodies of previous exposure among low-income and black populations, citing proximity to open sewers, accumulated refuse and rat sightings as risk factors. They also noted that an increase in 1 US dollar per capita of household income was associated with an 11 percent decrease in infection risk. In developed countries, sporadic outbreaks occur from participation in activities such as freshwater swimming for triathlons or recreational travels to high endemic areas.

The clinical course of the disease is most often limited or mild, but can evolve into a severe and potentially fatal infection. With the transmission of the spirochete, there is a 2- to 26-day incubation period (usually about 10 days) before symptoms abruptly begin, which is on par with the recent reports. These include high fevers, rigors, muscle and joint pain and headaches. Conjunctival suffusion (redness of the eyes without the discharge seen in conjunctivitis) is a finding that occurs in about 55 percent of patients and should raise the suspicion of Leptospirosis.

Complications in a small subset of infected individuals include jaundice and renal failure, pulmonary hemorrhage, acute respiratory syndrome, inflammation of the eyes, neuropathy, inflammation of the heart and skeletal muscles. Renal failure may lead to electrolyte abnormalities requiring supportive care. These complications can carry a high mortality rate, even in hospitalized patients.

Antibiotics can help with mild to moderate infections. Patients with severe manifestations need hospitalization for supportive care and intravenous antibiotics. Prevention control follows the logical measures through avoiding stagnant water and animal farm water runoff, rodent control, and protection of food from animal contamination. In endemic areas, prophylaxis with the antibiotic doxycycline seems to reduce cases of Leptospirosis.

The immediate dramatic events of a hurricane garner much media attention: the news correspondent leaning into the gale force winds trying to describe the storm into his microphone while the wind howls; or residents of the devastated communities emerging from the shattered homes wading in chest-high water. However, the most concerning aspects of these catastrophes develop long after the storm has subsided. The public health infrastructure is often dismantled by the storm and delays the immediate care needed to prevent problems from injuries, exposure to hazards and drownings. Initial infections are mainly gastrointestinal and wound-related.

Flood waters are heavily contaminated by sewage waste and toxic chemicals. These can lead to issues such as severe and prolonged diarrhea. These conditions can be lethal for the very young and elderly. In Haiti after the 2010 earthquake, cholera introduced by UN aid workers became a serious epidemic. Small wounds can become readily infected, leading to sepsis.

Tetanus, for which a vaccine is readily available, can become a serious concern as puncture wounds are likely when wading in contaminated water and soil. Waterborne mosquito infections can spread viruses like Zika, dengue and West Nile disease. Orthopedic injuries are also more common in this phase of the recovery as people set to rebuild their lives again.

These are only the more immediate physical impacts. Later, the anxiety and depression from those traumatized and displaced permeate into the community.

What is alarming in Puerto Rico is the discrepancy between optimistic official reports and the desperate urgency with which local officials are requesting assistance. Without establishing direct lines of communications throughout the region and triaging the appropriate services to these regions, matching resources with needs will remain a dire problem.

Suffering from such destructive processes can be reduced and communities made whole again. Such storms are predictable, and a network of islands and countries could prepare material, personnel, and finances to come to each other’s aid and assistance.

Necessary internationally based emergency organizations could be assembled to respond to these devastations. The technological expertise is more than possible. An effective humanitarian response would entail the rapid deployment of the resources of the country to mitigating the disastrous consequence of the hurricane.

However, the subordination of the needs of those suffering from the effects of Hurricane Maria, and Harvey and Irma before it, to the capitalist market means that the relief effort is deplorably underfunded and bureaucratically mismanaged. President Trump’s response—demanding that aid to the island be predicated on repayment of debt—is the most honest expression of the contempt on the part of US authorities for the plight of the Puerto Rican population.

Deadline looms for Catalonia to confirm or deny independence declaration

Alejandro López

The Popular Party (PP) government, backed by the Citizens party and the Socialist Party (PSOE), is preparing to seize control of Catalonia if regional premier Carles Puigdemont confirms today that he has declared independence from Spain.

Last Tuesday, Puigdemont told the Catalan parliament that he had “accepted” the mandate for independence based on the results of the October 1 referendum, but then suspended it for “a few weeks” to pursue negotiations with the Spanish government. Puigdemont’s Catalan European Democratic Party (PDeCAT), the Republican Left of Catalonia (ERC), and the pseudo-left Popular Unity Candidacy (CUP) then signed a document declaring Catalonia’s independence from Spain.

On Sunday, Puigdemont did not disclose what he is planning to do, stating that “we want to reiterate our commitment to democracy and peace as the inspirers of the decision we have to make.”

The secessionists have spent the past week seeking to strike a deal with Madrid, but no deal is on offer. Spanish Prime Minister Mariano Rajoy has stuck by his provocative ultimatum, demanding Puigdemont clarify by today at 10:00 a.m. whether he declared independence.

If he says yes, or declines to respond, Rajoy promises to invoke Article 155 of the Spanish constitution. This allows Madrid to suspend the authority of the Catalan regional government and seize control of the region’s finances, administration and police forces.

Such an unpopular measure would necessarily involve the army and the potential invocation of Article 116 to impose a state of emergency. The army has already drawn up an attack plan, code-named Cota de Malla (Chain Mail), in which the army will back police and civil guards in occupying Catalonia.

Sections of the PP are already indicating the reactionary implications of Article 155. Catalan PP leader Xavier García Albiol said that if 155 is invoked “it will be the time to rethink certain things,” such as the educational system in Catalonia and the role of the regional police, the Mossos d’Esquadra. Albiol said, “The majority of the Catalan public school, instead of dedicating themselves to teaching, educate children to hate Spain” and accused regional police of having become “an instrument in favor of the independence.”

His remarks, which are associated with the far-right, are a clear indication that the government is preparing to roll back substantial concessions to the regional bourgeoisie given to them after the end of the Franco regime to ensure their loyalty to the state.

To underscore the type of repression being planned, the leaders of the main pro-secessionist organisations, Jordi Sànchez of the Catalan National Assembly (ANC) and Jordi Cuixart of Òmnium Cultural, along with Josep Lluís Trapero, the Catalan police chief, are in court today charged with sedition. There is already talk of them being placed in preventative custody.

While the immediate target of 155 is Catalonia, the broader target is the working class of Spain and Europe. Madrid is now openly discussing which technocrat would rule a new non-elected administration in Catalonia under Article 155, another indication of how class tensions have reached extreme levels incompatible with democratic forms of rule.

El Español provided some names being discussed under the provocative title, “Who will be the Pich and Pon of 155? Six candidates for ‘governor’ of Catalonia.” Juan Pich y Pon was named Governor General of Catalonia after the Catalan self-government was crushed in October 1934.

The names listed are Enric Millo, the current delegate of the Spanish government in Catalonia, who led the repression during the independence referendum on October 1 that left over 800 injured; Soraya Sáenz de Santamaría, the PP’s current deputy prime minister of Spain; Dolors Montserrat, the current Minister of Health; Jesús María Barrientos; the current president of the High Court of Justice of Catalonia; Socialist Party member and former Spanish Minister of Work, Celestino Corbacho and Duran i Lleida, a former leader of the Democratic Union of Catalonia, a nationalist party opposed to separatism.

The PP’s preparations for a military-police crackdown enjoy the support of the major European powers and the United States, which fear the break-up of a member of the European Union and the NATO alliance. Last Friday, the EU made its endorsement of Rajoy clear once again, with European Commission President Jean-Claude Juncker declaring, “If we allow Catalonia—and it is not our business—to separate, others will do the same… I do not want that. I wouldn’t like a European Union in 15 years that consists of some 98 states.”

Faced with the prospect of a military crackdown, the Catalan bourgeoisie and its middle-class allies of the CUP are in crisis. Puigdemont cannot simply back down. If he does, the CUP has threatened that it would withdraw its parliamentary support, the key to Puigdemont’s minority government.

In a letter delivered to Puigdemont on Friday, the CUP demands an immediate “proclamation of the republic”, adding, “If [the central government] mean to keep applying the provisions of Article 155 of the Spanish Constitution, let them do so with the republic already proclaimed.”

The CUP withdrawing support would imply snap elections, in which the secessionist parties might lose a majority in parliament against the forces backed by Madrid.

Avoiding answering the CUP, regional vice premier and leader of the ERC, Oriol Junqueras, said, “What we are doing is the republic, and the best way to do it is through dialogue, dialogue to make the republic, and to do it effectively we need to preserve unity.”

Hostile to any mobilization of broader opposition to Madrid’s crackdown in the Spanish working class, the separatist forces are instead busying themselves preparing a set of measures in an independent Catalonia which would work as tax incentives for companies.

On Sunday, the Catalan News Agency reported that the regional government sees independence as “an opportunity in the mid-term to improve the market conditions which companies have faced until now.”

It added that a Catalan state should have a more advantageous fiscal framework for the economy so as to create “incentives to new investments, job creation”.

Such remarks confirm the correctness of the World Socialist Web Site ’s statement on the independence referendum, which explained, “The separatist parties aim to create a new mini-state through which they can claw back taxes presently paid to the central government, while establishing direct relations with global banks, transnational corporations and the European Union. They hope to transform Catalonia into a low-tax free trade area based on stepped-up exploitation of the working class.”

Such pro-capitalist politics only serves to divide the working class against itself, under conditions where the critical task is the political unification and mobilization of the Spanish and European working class against the repression planned by Madrid and in a struggle for socialism.

The pseudo-left Podemos has until yesterday continued its task of demobilizing all opposition to the PP and disarming the Spanish working class in the face of a massive state build-up by continuing its empty appeals to Rajoy.

Podemos spokesperson to the Senate, Ramón Espinar, said on Saturday that Rajoy should dialogue with Puigdemont “before applying any exceptional measures,” adding that “Rajoy has to think about it” and that he is still “on time” to do so: “Before applying any exceptional measure on Catalonia, what he has to do is to sit with Puigdemont: I do not know what better things Rajoy and Puigdemont have to do than sit down and talk”.

Far-right poised to enter government following Austrian election

Peter Schwarz

Sunday’s election in Austria has produced a sharp shift to the right. It is expected that a right-wing government of a kind not seen since the fall of Hitler and the restoration of Austrian independence will be installed.

The consensus view is that the election campaign was the filthiest in the country’s history. Incapable of addressing the devastating social consequences of the global capitalist crisis, the major parties sought to outdo one another with attacks on refugees and mutual mud-slinging. One commentator spoke of a “hysterical Austria-First atmosphere” dominating official politics.

As of this writing, the conservative Austrian People’s Party (ÖVP), with 31.4 percent of the vote, has emerged from the balloting with a clear lead. It gained 7.4 percent over its result in the last national election, in 2013. The final result will not been known until Monday, when the postal vote is counted.

Thirty-one-year-old Sebastian Kurz, who is currently foreign minister in the grand coalition with the Social Democrats (SPÖ), is likely to become the new prime minister. Kurz assumed the leadership of the ÖVP in May in what amounted to an internal party coup. He centered his campaign around his personality. Its sole political focus was hostility to immigrants, refugees and Muslims. Kurz attempted to outflank the far-right Freedom Party (FPÖ) from the right.

Kurz boasted that he secured the closure of the Balkan route used by refugees fleeing the catastrophic conditions in the Middle East, Central Asia and North Africa resulting from the US-led and NATO-backed wars in Afghanistan, Iraq, Syria and Libya. He touted his close ties to Hungarian Prime Minister Viktor Orbàn and promised a range of discriminatory measures against refugees. He vowed to restrict the number of immigrants, reduce social benefits for asylum seekers and close Islamic kindergartens. He also pledged to massively strengthen the police and security apparatus.

In second place is the far-right Freedom Party (FPÖ). It has increased its vote by 6.9 percent to 27.4 percent and overtaken the Social Democrats (26.7 percent), who received the same vote as four years ago. Since neither the Conservatives nor the Social Democrats want to continue the grand coalition, which has governed the country for ten years, it is likely that the right-wing extremists will be part of the next government.

The FPÖ entered the government in Vienna once before, from 2000 to 2007, when the party was led by Jörg Haider. At the time, its acceptance into government triggered Europe-wide protests and the European Union imposed sanctions. Since then, the party has moved significantly further to the right.

Forty-eight-year-old Heinz-Christian Strache, who broke with Haider in 2005 and took over as party leader, was, according to the Süddeutsche Zeitung, part of the militant neo-Nazi scene when he began his career in the FPÖ.

As a 17-year-old, Strache joined the German nationalist student fraternity Vandalia in Vienna. He maintained close contact with well known right-wing extremist Norbert Burger and was the partner of his daughter for seven years. He had ties to the neo-Nazi Viking Youth, which was banned in Germany in 1994, and participated in paramilitary exercises with well known neo-Nazis. Since photos exist of him in uniform, Strache later tried to dismiss his paramilitary activities as harmless paintball play-acting.

Strache joined the FPÖ in 1989, but the FPÖ’s youth organization, Youth Circle of Freedom (RFJ), turned him away. “At that time, Strache was too right-wing for us and blustered too much,” future Defence Minister Herbert Scheibner said of the decision.

A government alliance between Kurz and Strache—the most likely outcome of the election—would be roughly equivalent to a coalition between the Christian Social Union’s Markus Söder and the Alternative for Germany’s Bernd Höcke in Germany; or between Nicolas Sarkozy and Marine le Pen in France. In a country that was annexed by Hitler in 1938, all inhibitions about the crimes of the past are being dropped.

This development can be understood only in the context of the bankruptcy of the organisations that once described themselves as “left” or representative of the working class.

At the beginning of the 20th century, Austrian Social Democracy was among the most powerful sections of the Second International. Even after the First World War, which the Austrian Social Democracy supported, the party dominated “red Vienna,” where one in four residents was a member. In the 1970s, by which time the party had declared its unconditional defence of the bourgeois order but still carried through limited social reforms, SPÖ leader Bruno Kreisky was one of the most well known figures in international Social Democracy.

Now the SPÖ has paved the way for the rise of the right-wing extremists by abandoning even the pretense of defending workers’ rights. Instead, it has adopted xenophobic slogans, pledging prior to the election its readiness to form a coalition with the FPÖ.

Like the other parties, the Social Democrats called in the election campaign for the strengthening of borders against refugees. They supported the closure of the Balkan route by the region’s right-wing governments and pushed for a tougher stance against refugees in the Mediterranean, claiming that they were engaged in “economic migration.”

In June, Chancellor and SPÖ leader Christian Kern, a former rail industry executive, abandoned the more than 30-year-old “Vranitzky doctrine,” according to which the Social Democrats would not cooperate with the FPÖ. Leading SPÖ officials openly called for an alliance with the right-wing extremists. This was particularly the case among representatives of the influential trade union wing, such as construction union chief Josef Muchitsch and the leader of the metalworkers union, Rainer Wimmer. At the state level, the SPÖ already formed a coalition with the FPÖ in Burgenland in 2015. Both parties have hailed their close cooperation.

In the election, the SPÖ resorted to a filthy campaign that blew up in its face after it was exposed. In August, Tal Silberstein, a highly-paid SPÖ campaign consultant, was arrested in Israel on corruption charges and it was revealed that he operated anonymous Facebook pages that spread lies about ÖVP candidate Kurz, painting him as an anti-Semite.

There is no possibility of forming a majority in the new parliament by aligning one of the three major parties with one or more of the smaller parties, because the votes recorded by the latter were too low.

The neo-liberal Neos, a protest party made up of well-off middle-class elements, which adapted itself to the anti-refugee campaign, will reenter parliament with 5.0 percent of the vote, the same result as in the last election.

The Greens, whose former chairman Alexander Van der Bellen was elected Austrian president in December of 2016, lost 9.1 percent. With a total of 3.3 percent, they have fallen short of the 4 percent needed to enter parliament. The list of Peter Pilz, a former member of the Pabloite Revolutionary Marxist Group, who split from the Greens because their policies on refugees and Turkey were not sufficiently right-wing, received 4.1 percent.

The Team Stronach, set up by a right-wing businessman, which received 5.7 percent in the last election, did not stand in Sunday’s election.

The rightward shift in Austria is symptomatic of Europe as a whole. In the Alpine republic, with its close to 9 million residents, the full extent of the rot of bourgeois politics is on display. In the face of deepening international and social tensions, all of the parties defending capitalism are turning to policies of nationalism, xenophobia, militarism and the strengthening of the repressive state apparatus.

The dissatisfaction and social needs of the masses find no expression in the traditional ruling parties, allowing them to be exploited by far-right demagogues. This is true not only in Austria, where the FPÖ is winning support in former SPÖ strongholds, but also in France, where the National Front won votes in run-down industrial areas, and in Germany, where the AfD’s strongholds are in impoverished parts of eastern Germany.

Trump, Iran and the US drive for world hegemony

Keith Jones

At the conclusion of a bellicose and dishonest speech on Friday, US President Donald Trump vowed to blow up the 2015 Iran nuclear accord unless it is rewritten in accordance with US demands.

The speech epitomized the arrogance and criminality of America’s ruling elite. Trump denounced Iran for spreading “conflict, terror and turmoil throughout the Middle East and beyond.” This from the leader of a country that has subjected the people of the Middle East to untold horrors, waging aggressive wars that have destroyed entire societies, causing the deaths of millions of people in Afghanistan, Iraq, Libya and Syria and forcing many millions more to flee their homes.

Trump denounced the 1979 Iranian revolution, painted Iran’s bourgeois-clerical government as an international outlaw regime, and cast the United States as the protector of the democratic rights of the Iranian people.

As if the Iranian masses have forgotten that the CIA organized the 1953 coup that overthrew Iran’s elected president, Mohammad Mossaddegh, and installed the Shah’s savage dictatorship, which Washington maintained in power for the next quarter-century. Or that for the past four decades the US has carried out an unrelenting campaign against Iran, repeatedly threatening it with attack, supporting Baghdad in the eight-year Iran-Iraq war (1980-88), and imposing punishing economic sanctions that culminated, under Obama, in all-out economic warfare.

Trump made clear that his demands for “correcting” the nuclear accord’s “many flaws” are nonnegotiable. They amount to an ultimatum that Tehran unilaterally disarm while the US maintains an armada in the Persian Gulf and arms its Saudi and Israeli allies to the teeth. They would require Iran to accept permanent incursions on its sovereignty and its de facto reduction to the status of a vassal state.

The demands include: making permanent the stringent restrictions on Iran’s civil nuclear program, which are set to lapse in the agreement’s eleventh year; allowing unfettered International Atomic Energy Agency inspections of Iranian military sites; and dismantling Iran’s ballistic missile program.

European leaders responded by angrily denouncing Washington for acting as a law unto itself, inciting a global nuclear arms race, and heightening the danger of war in the Middle East and on the Korean Peninsula. German Foreign Minister Sigmar Gabriel warned that if the US persists on this path it “will drive us Europeans into a common position with Russia and China against the USA.”

What happens next is unclear. Much of the US political and military-security establishment, including Trump’s own top advisers—Defense Secretary James Mattis, Secretary of State Rex Tillerson and National Security Adviser H.R. McMaster—have counseled Trump against jettisoning the Iran deal. Both Mattis and Joint Chiefs of Staff Chairman Gen. Joseph Dunford, testifying last week before Congress, acknowledged that Iran is in compliance with the nuclear accord and said they believed upholding the agreement is in the United States’ interests.

This is not because Trump’s generals are any less determined to bring Iran to heel and secure US hegemony over the Middle East, the world’s most important oil-exporting region and the strategic pivot between Asia, Africa and Europe.

Trump’s Democratic Party and media critics are no different. The New York Times and the Washington Post have repeatedly urged a more aggressive US military and diplomatic offensive against Iran, beginning in Syria, where Tehran has played a major role in the defeat of the US-supported Islamist forces. In an editorial Saturday, “Trump has charted a perilous course on Iran,” the Washington Post accused the president of “geopolitical folly” and chastised him for “having no clear plan to address Iran’s military entrenchment in Syria, which is threatening to touch off a new conflict with Israel.”

The disagreements, while sharp, are entirely tactical. They revolve around the question of the appropriate target and timing of the next US war, amid widespread fears that a showdown with Iran will undercut Washington’s military-strategic offensives against China and Russia, and inflame relations with America’s traditional European allies, which, through NATO, continue to play a major role in projecting US global power, especially against Russia.

Opposition to Trump’s plan to trash the Iran accord is a factor in the unprecedented political warfare in Washington, which has now reached the point of public discussion about using the 25th Amendment to the US Constitution to remove Trump.

With Trump planning to use Wall Street’s dominance of the global banking system, and access to the US market, to bully the Europeans into imposing new economic sanctions against Tehran, the Iran issue threatens to further envenom the already fierce commercial struggle between the US and Europe, especially Germany. Already the European powers are talking of retaliatory action.

The European imperialists are no less predatory than Washington. They were key partners in the economic war against Iran. But the renewed US drive against Tehran threatens their plans to invest billions to economically exploit Iran, which has the world’s fourth largest oil reserves and the largest natural gas reserves. Moreover, given their proximity to the Middle East and their dependence on Mideast oil, they fear the destabilizing fallout from another US war—one that could quickly involve nuclear powers such as Russia and China.

While Trump is an accelerant, the basic source of the divisions within the US ruling elite over America’s policy toward Iran and its broader imperialist strategy lies in the failure of the drive Washington initiated, in the wake of the dissolution of the Soviet Union, to offset the erosion of its economic power by waging wars of aggression.

In the pursuit of global hegemony, the US has razed the Middle East. Iran has been a principal target of US aggression, with American troops invading two of its neighbors, Afghanistan and Iraq. Yet Iran has been able to expand its influence, while both Russia and China are now major economic and geopolitical players in the Middle East, combining to frustrate Washington’s plans to use Islamist proxy forces to overthrow Syria’s government, as it successfully did in Libya.

US imperialism’s response to these reversals is to accelerate its war plans, directly targeting its major rivals, beginning with China and Russia. Europe and Japan, for their part, are furiously rearming to assert their own imperialist interests in opposition to the US.

Mankind is faced with the real and present danger of being dragged by the imperialist powers into a Third World War, this time employing nuclear weapons.

There is no “peace” faction in the ruling class of any of the major powers. The social force that can halt the descent into a nuclear holocaust is the international working class, mobilized on the basis of a socialist and internationalist program directed at the overthrow of capitalism, the source of war, social inequality and dictatorship. The International Committee of the Fourth International is fighting to build a mass international antiwar movement on this revolutionary basis.

UK school funding crisis worsens

Tom Pearce

The majority of schools in the UK are facing an unprecedented funding problem. Many schools are being forced to ask for parent contributions for essential resources.

According to the National Education Union (NEU)—recently created from the merger of the National Union of Teachers and Association of Teachers and Lecturers—88 percent of schools face a real terms cut despite the announcement from the ruling Conservatives that there will be more funding by 2019.

Over the last five years, the ever-worsening situation has been opposed by campaign groups and teachers, who have demanded equal allocation of funding among schools as well as increased funding. In response to criticism, in July the government promised an additional £1.3 billion in a package of “fairer funding.”

With the extra money, total budgets are to increase to £2.6 billion for schools in England over the next two years. This was described by Education Minister Justine Greening as a “historic reform.” The truth is that no extra spending at all is being allocated by the Department of Education (DoE) as the £1.3 billion is coming from “efficiency savings” from its existing budget.

Some £420 million of the savings will be cut from the DoE’s capital budget. Further savings of £250 million will be made in 2018-19 and £350 million in 2019-20 from the Department’s resource budget, with £200 million to be taken away from its central school improvement programme.

Despite the hype from the Tories as they announced the details of the new package last month, the money being provided falls far short of what is needed and will hardly make any difference to the situation facing the majority of schools. The increase equates to just 0.5 percent per pupil from the next school year, and a one percent increase from 2019-20. Some schools will receive extra funding but the average primary school will still lose £52,546 per year and the average secondary school £178,321 per year.

According to the Association of School and College Leaders, schools require a further £2 billion a year between now and 2020 if they are to be able to deal with previous budget cuts. Since 2015 alone, schools have suffered a real terms cut in funding of £2.7 billion.

Many inner city areas of the UK will lose out in the new funding formula. This is because the funding is largely being redistributed from schools in one area of the UK to top up another. The borough of Tower Hamlets in London is set to lose a projected £19 million by 2020.

Figures provided by the Department of Education show a total of 9,438 schools, or one-in-three, are already in the red. In east London alone, over 200 schools were in deficit in 2015-16.

A new survey by the National Education Union found that primary pupils will in fact attract five percent less funding in real terms by 2020, compared with 2015—a £201 cut per pupil.

Like other public-sector services, state education is being pushed to a breaking point as a step towards further privatisation and the establishment of a two-tier system.

A report by the Parent Teacher Association found that out of 1,507 families, a third of parents regularly gave money to school to subsidise funds in the past year. More than half the schools surveyed were asking parents to contribute. This is not something that parents are legally required to do in the UK, but schools asking for funds has become commonplace.

Parents report that they are contributing money to provide the essentials, which many expect to be provided by the state. Some examples include asking parents to provide stationary and books. Almost a fifth of parents have been asked to provide essentials such as toilet paper.

Some schools are asking for voluntary contributions of around £10-£30 a month to top up their funding. Geoff Barton, general secretary of the Association of School and College Leaders (ASCL) said, “This takes us to the very edge of what state education should be doing, if we are starting to ask parents for [toilet paper].”

Schools have also asked for donations from businesses to provide basic necessities, resulting in further reliance on the private sector.

A survey of teachers by the Times Educational Supplement (TES) found that nearly four-in-ten (39 percent) respondents said their school asked parents for money to help with school funding last year. More than two-thirds (68 percent) said their school asked parents to pay to attend school concerts and sports events. Over a fifth (22 percent) of schools asked parents to pay for books. Some 22 percent of parents were paying for design technology and 21 percent for art materials.

Workers employed in schools are also picking up the bill. A survey, carried out by the NEU in August and September of just over 1,800 school staff in England, revealed that 94 percent “paid for classroom resources or equipment from their own pocket in the last school year, with a third (33 percent) saying they spent more last year than in previous years. Nearly two-thirds (61 percent) said they did so because their school did not have enough funds.”

It also noted, “Over a quarter (26 percent) of them spent between £101 and £500 of their own money on school resources last year and nearly a third (31 percent) between £51 and £100. Seven-in-ten (73 percent) said they paid for stationery, nearly six-in-ten (58 percent) said they bought books and four-in-ten (43 percent) bought art materials.”

While the NEU carries out such surveys, the teaching unions have done nothing to mobilise their members, who are angered by the dire crisis in school age education. Apart from the NEU creating and updating their website School Cuts, the only action they are planning is a lobby of parliament on October 24.

The “campaign” of the NEU is encapsulated in all of 90 words on its website and is aimed at telling its members to appeal to the good graces of a government which has imposed over a hundred billion in austerity measures in the last seven years to desist!

It states, “MPs will be asked to put pressure on the Chancellor to find the funding needed to reverse the cuts and invest in our children and young people, a month before he is set to deliver his budget statement.”

The only call on its members to do anything is that they “Use the form [on the NEU’s website] to request a meeting with your MP and tell us you will attend the lobby …”

Included in the MPs that NEU members are being asked to arrange meetings with are the 316 Tory MPs who openly support the cuts.

At its annual conference in April, the then National Union of Teachers (NUT)—now the NEU—backed industrial action over the education funding crisis. The union, however, took no action in the summer term. This was despite a motion being passed which led to General Secretary Kevin Courtney—a supporter of the pseudo-left Socialist Workers Party—declaring that strike action would be considered. This was to be confined to regions of the country where schools are the worst hit by funding cuts.

Since then, talk of action has disappeared altogether, despite the newly created union being able to count on the backing of 450,000 teachers, lecturers and support staff.

Youth suicides at a record high in the UK

Alice Summers 

According to a study by the Institute of Public Policy Research (IPPR), 134 students committed suicide in the 2014-15 academic year. This figure, an all-time high, represents an increase of 79 percent since 2007, when 75 students took their own lives.

The IPPR’s research findings come amid a worsening mental health crisis in the UK and worldwide, which is particularly affecting young people under the age of 25. Approximately one-in-four people in the UK suffer from a mental health condition each year, with around three-quarters of adults with a mental illness first experiencing symptoms before the age of 25, according to the report.

The proportion of 16-to-24-year-olds experiencing a mental health condition in England is rising, with 19 percent in this age group suffering from some form of mental health problem, up from 15 percent in 2003. Young women under 25 are hit hardest by the mental health crisis, with 28 percent affected.

In the past ten years, the number of students disclosing a mental health problem to their university has skyrocketed. In the 2015-16 academic year, 15,395 UK-domiciled first-year students reported a mental health condition, a fivefold increase since 2006-07.

Nearly all (94 percent) universities in the UK have reported an increase in the number of students seeking counselling, with 61 percent of campuses seeing a rise of more than 25 percent. At some institutions, as many as one-in-four students are using, or are on a waiting list for, mental health services.

Even these figures do not tell the whole story. Due to fear of being stigmatised or feeling that help or support would not be available, nearly half (48 percent) of students who have experienced mental health problems do not disclose it to their university.

Many students fear that admitting to a mental health problem would have a negative impact on their social relationships with peers or academic staff, or that it would adversely affect their chances of getting a good job after they graduate.

The IPPR report stated that due to the lack of support and treatment “poor mental health can lead to increased risk of students dropping out of university, or in the most severe and tragic cases, death by suicide.” Although suicide is intimately linked to mental health conditions, only 25 percent of people who die by suicide in the UK were in contact with mental health services in the year before their death.

While the rate of student suicide is increasing, it is in fact lower than the population as a whole. However, suicidal thoughts are prevalent within universities. The charity YouthSight and the National Union of Students report that the proportion of students thought to have experienced suicidal thoughts is between 8 and 13 percent respectively.

Young adults between the ages of 20 and 24 are the least likely of any age group to report high levels of well-being, the indicators of which are: life satisfaction, feeling that things done in life are worthwhile, happiness and low anxiety. Students experience lower rates of well-being than young adults as a whole—with less than one-in-five students reporting high levels in each of these four main well-being indicators in 2017.

Austerity cuts have reduced the capacity for prompt intervention to prevent mental health problems developing, and are a significant factor in the increased rates of mental illness and in the rise in demand for mental health services among young people. Students also experience specific risk factors that can lead to poorer mental health and well-being, according to the study, including academic demands and pressure to achieve high marks, social pressures and financial worries.

According to Ruth Caleb, a well-being consultant at Brunel University, the increase in students suffering from mental health problems could be attributed to the fact that more students are now arriving at university already anxious and worried about their degree, as well as feeling anxious about the obscene levels of debt they will incur before even starting work.

With average debt at around £57,000, and with living costs spiralling upwards in most cities, worries about not having enough money are one of the factors causing students the most stress. According to a survey by education charity Teach First, 44 percent of students said this caused them stress in their first year.

Disadvantaged students are significantly more likely to drop out of university in their first year than their wealthier peers. According to the Office of Fair Access, in the 2014-15 academic year, 8.8 percent of full-time undergraduates below the age of 21 coming from disadvantaged backgrounds did not continue with their studies beyond their first year, compared to less than 5 percent of wealthier students.

Figures from the Higher Education Statistics Agency published in May revealed the impact that poor mental health is having on student retention. A record 1,180 students dropped out of university in 2014-15 due to mental health problems such as anxiety. This has more than trebled since 2009-10—in the aftermath of the global financial crash—when 380 students were forced to leave university for this reason.

Pressure to achieve high marks also has more of an adverse effect on poorer students than on their wealthier peers, with nearly half (47 percent) saying that keeping up with academic work caused them stress.

Exam pressures and fears of not getting good grades are factors taking the highest tolls on youth mental health. They are some of the common reasons for suicide among young people, and not just those at university age.

According to a study by the University of Manchester, suicides among children and young people peak every year around exam season. In England and Wales, an average of 96 young people under the age of 25 take their own lives each year in April and May during the period when most exams are held. The next highest number of youth suicides takes place in September—the start of the academic year—when an average of 88 young people die by suicide every year.

The University of Manchester research revealed that 47 percent of the young people who took their own lives in 2014-15 were experiencing “academic pressures overall” before their death. Nearly one-in-three (32 percent) either had exams at the time, would be sitting exams soon, or were waiting to receive exam results.

This appalling rise in mental health issues and youth suicides is not just a phenomenon affecting the UK, but can also be seen in the US, the wealthiest country in the world.

Suicide rates among young girls in the US have reached a 40-year high. Children between 10 and 14 in the US are now more likely to die by suicide than by car accidents.

Germany: The significance of the election in Lower Saxony

Ulrich Rippert

Tomorrow’s election in the state of Lower Saxony has far greater importance than appears at first sight. Germany’s federal (Bundestag) election took place three weeks ago, but negotiations on the formation of a “Jamaica” coalition—comprising the conservative Christian Democratic Union (CDU), the Christian Social Union (CSU), the neo-liberal Free Democratic Party (FDP) and the Greens—have been postponed until the outcome in Lower Saxony is known.

Influential circles of the ruling class intend to use tomorrow’s result to facilitate a complete realignment of the government at the federal level. If the Social Democratic Party (SPD) emerges as the front-ranking party in Lower Saxony, as polls are predicting, then SPD leader Martin Schulz’s announcement that the Social Democrats would not participate in the next federal administration would be called into question.

Former SPD chairman and acting Foreign Minister Sigmar Gabriel has stated already that the decision to rule out participation in government was somewhat premature, and influenced by the party’s miserable election result. Gabriel, whose political base resides in Lower Saxony, said: “The hangover is yet to come.” The SPD, he inferred, would regret its decision.

The SPD-Green state administration in Lower Saxony collapsed at the beginning of August, almost two months before the Bundestag election. A Green deputy, Elke Twesten, announced she was switching parties and joining the conservative CDU. This meant the state government in Hanover headed by SPD premier Stephan Weil lost its slender majority of one seat and was forced to call an early election.

There were many indications at the time that Twesten’s switch of parties was the result of political intrigue. She held talks with the CDU some weeks before her decision and rumours circulated that her change of faction was bound up with career prospects and lucrative job offers.

Right-wing elements in the CDU and the media saw an opportunity to further weaken the SPD on the eve of the Bundestag elections and thereby prevent any continuation of its “grand coalition” with the conservative CDU-CSU. A “business as usual” attitude was no longer permissible was the mantra of many comments. The grand coalition was described as too cumbersome and incapable of fulfilling Germany’s ambitious domestic and foreign policy agendas. The same accusation was levelled against Chancellor Angela Merkel, who has governed for two-thirds of her 12-year term in an alliance with the SPD. A new coalition and a charismatic leader were necessary.

Three months later, the media, which applauded the fall of the SPD-Green state government, has little to say about the SPD election campaign in Lower Saxony. The Bild newspaper commissioned an opinion poll and ran the headline a few days later: “SPD leads CDU in Lower Saxony.” The CDU had lost a 12-point advantage in Lower Saxony within two months. For the first time since April, the SPD was leading the polls with 33 percent.

The main reason for the media about-turn is the dramatic intensification of the international crisis and the growing danger of war.

In this context, a comment by Gabor Steingart in the Handelsblatt is noteworthy. The editor of Germany’s leading business newspaper warned that the “political hurricane” raging between the US State Department, the White House and Capitol Hill would affect Europe very soon and very powerfully. He wrote: “It is an issue of war or peace, even if is obscured behind a smokescreen of personal accusations.”

US President Donald Trump’s uncontrolled verbal attacks on other countries, Steingart declared, risked opening the way “to a Third World War.” In the face of this “coming storm,” Germany appeared drugged with the “narcotics” known as party politics, and petty interests and bickering dominated. As a result, he wrote, “the American storm petrel, which presages the coming disaster, remains unobserved.” For the sake of convenience, the German establishment was underestimating Trump and minimising the danger of war.

Steingart ended by citing the well-known author Sebastian Haffner, who described the atmosphere of the pre-World War II years in his memoirs, TheStory of a German. Haffner’s references to the “deliberate ignorance” which prevailed at that time, Steingart concluded, “recalls our present situation.”

The article demonstrated that sections of the ruling class want to keep open the option of a continued CDU-SPD grand coalition. A “Jamaica” coalition of four parties has never been attempted before in post-war Germany. It could prove extremely unstable due to internal conflicts. In addition, FDP leader Christian Lindner and Green leader Cem Özdemir, who expect to fill leading ministerial posts, are considered to be weak and inexperienced when it comes to dealing with the challenges posed by the growing danger of world war.

There are also foreign policy differences within the ruling class. Foreign Minister Gabriel and the SPD regard close cooperation with France as the best prerequisite for developing Germany into a military and political world power. They therefore support President Emmanuel Macron’s proposal to establish a European finance ministry and a budget for the eurozone. They are also looking at the advantages of collaboration with a state that has nuclear weapons.

This spring, Die Zeit, wrote that “non-nuclear states like Germany face a deep dilemma” should the US no longer unconditionally guarantee their security. The newspaper, which is close to the SPD, raised the possibility of Germany co-financing the planned modernisation of France’s nuclear arsenal in exchange for the German government having limited powers to influence French policy.

The FDP, the CSU and sections of the CDU, on the other hand, strongly reject Macron’s plans. They fear Germany will be swept into the vortex of the next financial crisis if it has to provide financial support to France and other European Union countries. German Finance Minister Wolfgang Schäuble (CDU) expressed his opposition to Macron’s proposal and instead demanded sharper control of finances by a European Monetary Fund.

Gabriel sharply criticised Schäuble over his statements. The Greens tend to be closer to the SPD on this issue, while Chancellor Merkel has so far remained silent.

All parties agree that the next federal government must engage in a massive program of rearmament at home and abroad. The dispute, however, is how to best realise this policy and the associated attacks on the working class. Should the SPD go into opposition and open the way for a coalition of the CDU/CSU, FDP and the Greens? Or should it participate in government in a coalition of the conservative Union parties in a kind of national unity government, in close collaboration with the German Federation of Trade Unions?

In 1999, a SPD-Green coalition paved the way for Germany’s first ever post-war foreign military mission. In 2014, former foreign minister and the current German president Frank-Walter Steinmeier took the lead in further militarising the country. Today, his successor, Sigmar Gabriel, is the chief advocate of an aggressive German foreign policy.

Whatever federal government emerges after the election in the Lower Saxony on Sunday, it will be a right-wing government, focused on military rearmament, preparation for war and police repression.

Sri Lankan government enforces UN sanctions against North Korea

Nanda Wickremasinghe 

On October 6, the Sri Lankan government issued extraordinary gazette notifications enacting the September 11 UN Security Council measures against North Korea. This announcement also followed US President Trump’s September 21 executive order imposing further crippling sanctions on Pyongyang.

The decision is an expression of the Colombo government’s backing for US intervention in the Korean Peninsula and for Washington’s aggressive policies more broadly. Like other countries in the region, Sri Lanka is under intense pressure to fall into line with US war plans.

The government issued the sanctions gazette without even notifying the parliament. It prohibits Sri Lankans from providing or receiving assets, financial services, technical training, advice, services or assistance related to North Korea’s nuclear program.

Also banned are bunkering services, supplies, servicing, leasing or chartering of vessels or crew services of vessels to North Korea. Moreover, North Korean financial institutions cannot open new branches, subsidiaries or offices in Sri Lanka.

A government-appointed Competent Authority (CA) will oversee the implementation of the regulations and may recommend the expulsion of North Korean diplomats. This authority has the power to freeze funds and other financial resources belonging to persons or institutions of the North Korean government and the ruling Korean Workers Party.

On September 15, the government sent its implementation report on sanctions imposed last November, noting its tough visa requirements on all North Korean nationals. Colombo refused to allow four delegates from North Korea to attend a Sri Lanka-North Korea Friendship Association meeting in March.

The government had been under pressure to take tougher measures. A UN report early last month noted that Sri Lanka was among several countries that allegedly violated sanctions by importing commodities from North Korea, including coal and iron. Other countries cited included China, India, Malaysia, Indonesia, France, Pakistan and Ireland.

The new UN sanctions intensify restrictions that have already compounded North Korea’s economic problems and the suffering of the masses. They have banned North Korea’s exports of coal, iron ore and seafood. A US official said more than 90 percent of North Korea’s reported exports are now blocked.

The increasing military pressure on North Korea is part of a US strategy to encircle China, which Washington considers a major obstacle to its global domination. This week, US supersonic bombers, joined by Japanese and South Korean fighter jets, flew near North Korea, threatening to trigger a conflict that would draw in China and Russia.

The government of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe has increasingly moved Sri Lanka into line with Washington’s war preparations against China and North Korea.

Sirisena was installed in office in January 2015 via a Washington regime-change operation to replace former President Mahinda Rajapakse. The US supported Rajapakse’s war against the separatist Liberation Tigers of Tamil Eelam (LTTE) and his anti-democratic rule. However, Washington wanted him removed because he developed close relations with China to procure arms and finances for his war.

Since Sirisena took office, there has been a pro-US foreign policy shift, including on North Korea. In 2008 and 2009, Sri Lanka abstained when a resolution against North Korea’s “human rights violations” was presented in the UN Human Rights Council (UNHRC). Again 2014, Sri Lanka voted against a similar resolution.

In 2015 and 2016, however, Sirisena’s government voted for UNHRC resolutions directed against North Korea.

In September last year and July and September this year, the government condemned ballistic missile tests by Pyongyang. Echoing the US, a September 13 Colombo statement declared that North Korea’s sixth missile test violated UN Security Council resolutions and was “a threat to peace and stability in the region and beyond.”

After the government imposed sanctions on North Korea, the leader of the opposition Janatha Vimukthi Peramuna (JVP), Anura Kumara Dissanayake, criticised the procedure involved. He declared that foreign ministry officials had failed to inform parliament and called for a “detailed account on why the government arrived at the decision to impose sanctions.”

In reply, Foreign Minister Thilak Marapana said the country’s legislation required the foreign minister to promulgate regulations when the UN Security Council ordered sanctions on a particular country.

The JVP, which at times resorts to radical sounding phrasemongering, falsely claims that North Korea is socialist. The regime in Pyongyang, was never socialist but was based on the reactionary Stalinist perspective of “socialism in one country” from the outset. Its chief aim for decades has been a rapprochement with the US so as to open up the country as a cheap labour platform for foreign investors.

Dissanayake’s procedural criticism was simply to obscure the fact that the JVP did not oppose the substance of the government’s sanctions or its lining up behind the US preparations for war against North Korea. He was silent on another serious step, which directly ties Sri Lanka to the US military.

Before the government’s decision on sanctions, Prime Minister Wickremesinghe announced in parliament on July 22 that the government would extend the Accession Cross Services Agreement (ACSA) with the US without specifying a time period.

The original agreement was signed by the previous Rajapakse regime in March 2007 for a period of 10 years. The ACSA allows the US and Sri Lanka to transfer and exchange logistics supplies, support and re-fuelling services, either in kind or at cost, during peacekeeping missions, humanitarian operations or joint exercises.

Wickremesinghe said: “Extending the agreement with the US will be of the utmost importance given the global situation today … considering the current international political situation and developments it [the agreement] would be favorable to the country.”

The Sirisena-Wickremesinghe government is dragging the country into Washington’s war plans, with potentially catastrophic consequences for workers in the region and internationally.

IMF report points to financial dangers lurking beneath global growth

Nick Beams

The International Monetary Fund (IMF) has forecast the best year for global economic growth since the 2008 crisis, but a rather different picture emerges from its analysis of financial conditions.

In its Global Financial Stability (GFS) report issued earlier this week, the IMF points to the build-up of $135 trillion of debt in the G20 economies. It also highlights the difficulties facing the world’s major central banks in trying to wind back the quantitative easing programs that have pumped trillion of dollars into the global financial system.

Presenting the report, Tobias Adrian, the head of the IMF’s financial department, said while the financial system was stronger, thanks to growth and low interest rates, “dangers in the form of rising financial vulnerabilities are starting to loom.”

Central bankers were maintaining easy policies to support growth and this was “breeding complacency and allowing a further build-up of financial excesses,” he stated.

“Non-financial borrowers are taking advantage of cheap credit to load up on debt. If left unattended, these growing vulnerabilities will continue to mount, threatening to derail the economic recovery when shocks occur.”

Adrian noted that before the financial crisis there were $16 trillion in relatively safe investment-grade bonds yielding more than 4 percent. “That has dwindled to just $2 trillion today. There is simply too much money chasing too few high yielding assets. The result is that investors are taking more risks and exposing themselves to bigger losses if markets tumble.”

Further details were provided in the report. It pointed out that today only 5 percent of investment-grade bonds yield more than 4 percent, compared with 80 percent ($15.8 trillion) before the crisis.

“Asset valuations are becoming stretched in some markets as investors are pushed out of their natural habitats, and accept higher credit and liquidity risks to boost returns,” it stated.

Indebtedness in major economies is increasing and now stands at 235 percent of gross domestic product for the G20 group of countries that make up about 85 percent of the world economy. Debt servicing pressures and debt levels in the nonfinancial sector were already high in several major economies, with Australia, Canada, China and South Korea singled out for specific mention.

Significantly, given its high and growing debt levels, Australia was one of the few major economies for which the IMF revised its growth outlook downwards.

While the IMF lifted its global growth forecast from 3.5 to 3.6 percent, it slashed its Australian figure to just 2.2 percent, compared to the 3 percent growth anticipated six months ago.

One of the report’s key aspects was to draw attention to the contradictions confronting central banks as they move to “normalise” monetary policy and pull back on the stimulus provided by quantitative easing that pumped trillions of dollars into global financial markets.

Central banks, it said, envisaged having to provide continuing economic and financial support with interest rates rising only slowly and the “gradual normalizing” of monetary policy expected to take years.

The “unconventional” monetary policies of the past period—ultra-low, and in some cases even negative interest rates, and the buying of financial assets by central banks under the quantitative easing program—had changed the working of financial markets. They were now “much less predictable than in previous cycles.”

That is, the very policies of the central banks have created completely uncharted territory as far as the workings of financial markets are concerned, with no historical precedents to provide a guide. In other words, these key institutions are, to a great extent, flying blind.

According the GFS report: “Abrupt or ill-timed shifts could cause unwanted turbulence in financial markets and reverberate across borders and markets. Yet the prolonged monetary support envisaged for the major economies may lead to the build-up of further financial excesses.”

The IMF analysts examined a downside scenario in which the “repricing of risks,” that is, rising interest rates, was combined with falling asset prices and a pullback of investment in emerging markets.

Such a situation would lead to a “significant” tightening of financial conditions and a fall in global output of about 1.7 percent relative to current predictions. According to this model, the impact would be about one-third as severe as the global crisis of 2008-2009.

However, given the new conditions that have emerged as a result of the policies since the global meltdown, the outcome could be more severe. In reality, the estimate is not much more than an educated guess.

As far as the banking system is concerned, the report said the health of what it called globally systematically important banks (GSIB) was continuing to improve because of stronger capital and liquidity requirements.

But banks representing about $17 trillion in assets, around one-third of the GSIB total, “may continue to generate unsustainable returns” even by as late as 2019. That is, they still do not have a sound business model and “problems in even a single GSIB could generate systemic stress.”

The report drew attention to the state of Chinese banks, warning that the “size, complexity and pace of growth” in the country’s financial system “point to elevated financial stability risks.” Chinese banking sector assets have risen from 240 percent of GDP at the end of 2012 to 310 percent at present.

Publicly, central banks and financial authorities more generally try to portray themselves as being in control of the capitalist economy. But behind the scenes a very different picture emerges.

For the past three decades and more, central bank monetary policy has been based on the so-called Phillips curve. This purports to establish a relationship between unemployment and inflation: as the jobless rate falls, inflation starts to increase because of increased wage demands. Based on this model, interest rates should be increased as inflation starts to rise.

However, in the period since the global financial crisis, while the headline official rate of unemployment has fallen, wages have either stagnated or declined and inflation remains persistently below the targets adopted by central banks of around 2 percent. This is largely due to the fact that the labour market has undergone a major transformation in all advanced economies with the replacement of full-time jobs with part-time, contract and casual employment.

The perplexity in ruling financial circles under post-2008 conditions was summed up in a major article published in the Financial Times (FT) this week. It reported that as central bankers gathered in Washington for the annual IMF meeting “there was a crisis of confidence.”

“Their models are failing and there are doubts whether they understand the effects of interest rates and other monetary policies on the economy.” The FT warned that the new “masters of the universe” might not understand the workings of the economy and “their well-intentioned actions could prove harmful.” While the central banks had always had their critics, “such profound doubts have never been so present in their narrow world.”

This assessment points to the fact that, in the period since 2008, far from having overcome the contradictions in the system over which they preside, the ruling financial elites have simply created the conditions for a new and potentially even bigger disaster.