The Case Against WikiLeaks is a Threat to All Journalists

Heather Wokusch

The Justice Department has prepared criminal charges against WikiLeaks founder Julian Assange and is working behind the scenes to have him extradited to the United States. Press freedom and the right to dissent may hang in the balance.

The criminal charges were accidentally revealed last week when Assange’s name was found on the court filing of an unrelated case, suggesting that prosecutors had copied a boilerplate text and forgotten to change the defendant’s name.

Barry Pollack, a U.S. lawyer on Assange’s team, told the New York Times: “The news that criminal charges have apparently been filed against Mr. Assange is even more troubling than the haphazard manner in which that information has been revealed.” Pollack continued, “The government bringing criminal charges against someone for publishing truthful information is a dangerous path for a democracy to take.”

Assange has been holed up in the Ecuadorian embassy in London since 2012, after seeking protection against sexual assault allegations in Sweden. While the initial arrest warrant has since been revoked, if Assange leaves the embassy he runs the risk of being apprehended by UK authorities and extradited to the United States, a process greatly facilitated by the recent criminal charges.

“Using free speech against us”

The U.S. government has targeted WikiLeaks and Assange for years. A confidential U.S. Army document from 2008 recommends “legal actions” and attacks on the livelihood and reputation of “current or former insiders, leakers, or whistleblowers” connected to WikiLeaks in order to “damage or destroy” its “trust as a center of gravity.”

WikiLeaks enjoyed a brief heyday among Republicans when it released hacked Democratic National Committee (DNC) emails during the 2016 presidential election. Then-candidate Donald Trump mentioned WikiLeaks over 160 times during the final month of the campaign, calling it “amazing” and saying “We love Wikileaks. Wikileaks. They have revealed a lot.”

During the campaign, Trump adviser Roger Stone often boasted about being connected to WikiLeaks, even claiming to have had dinner with Assange. Days before the dump of hacked Clinton campaign emails, Stone tweeted, “I have total confidence that @wikileaks and my hero Julian Assange will educate the American people soon #LockHerUp.”

Donald Trump Jr. was in repeated contact with WikiLeaks during the 2016 presidential election, and then-Congress member Mike Pompeo openly encouraged his social media followers to visit the WikiLeaks site for “proof” of various claims against Democratic candidate Hillary Clinton.

But it’s one thing to reveal information about the DNC and another thing entirely to expose a CIA hacking program with domestic spying implications — which is exactly what WikiLeaks did in March 2017 with its Vault 7 release. Just a month later, reports surfaced that U.S. authorities were preparing charges against Assange, with Attorney General Jeff Sessions calling his arrest a “priority.”

After being tapped to head the CIA in early 2017, Mike Pompeo actively began targeting Assange. In his first public speech as CIA director, Pompeo slammed WikiLeaks as a “non-state hostile intelligence service,” adding that “we can no longer allow Assange and his colleagues the latitude to use free speech values against us.”

“Use free speech values against us”? So much for the First Amendment.

The Espionage Act

Assange was granted Ecuadorian citizenship in late 2017, possibly part of a covert plan to relocate him to Russia in 2018. The British Foreign Office blocked that plan, however, so Assange remains in London.

The situation is untenable. Ecuador’s President Lenín Moreno sees Assange as an “inherited problem” impacting the country’s relations with the United States. Hanging in the balance for Ecuador could be a military base and an International Monetary Fund loan.

Assange’s recent legal case protesting new asylum conditions was rejected by a court in Ecuador. Meanwhile, his health deteriorates in what amounts to solitary confinement without access to sunlight or fresh air. His contact with the outside world remains severely curtailed.

While the exact criminal charges recently levied against Assange remain secret, the primary issue is whether WikiLeaks is portrayed as a news organization deserving of First Amendment protections or rather as a foreign government agent.

If the Justice Department takes the latter approach, then a World War One-era red-baiting law will probably be used against Assange. Originally intended for spies, the Espionage Act enjoyed a renaissance under President Obama, who used it more than all previous administrations combined — usually to pursue government officials who’d spoken to journalists.

The ACLU calls the Espionage Act “a fundamentally unfair and unconstitutional” liability law that treats whistleblowers exposing civil rights violations the same as spies selling damaging documents to foreign dictators. The Act enables leaked material to be retroactively categorized as classified, and with little justification.

It also makes the legal defense of whistleblowers almost impossible. As Jesselyn Radack, Director of the Whistleblower and Source Protection Program at ExposeFacts, wrote in a 2014 op-ed entitled “Why Edward Snowden Wouldn’t Get a Fair Trial“: “First Amendment arguments have failed, largely because they would criminalize the journalism made possible by the ‘leaks.’ The motive and intent of the whistleblower are irrelevant. And there is no whistleblower defense, meaning the public value of the material disclosed does not matter at all.”

The stakes of extradition

If extradited to the United States, whether prosecuted under the Espionage Act or not, Assange could become a dead man walking.

Former House Speaker Newt Gingrich has said Assange should be treated like an enemy combatant, while Hillary Clinton has wondered if he could be killed by a drone.

Pompeo recommended the death sentence for whistleblower Edward Snowden. Trump has joked about killing journalists.

Fox host Rush Limbaugh suggested that Assange “would die of lead poisoning from a bullet in the brain and no one would know who put it there!” Fox commentator Bob Beckel offered: “Dead men can’t leak stuff… there’s only one way to do it: illegally shoot the son of a bitch.”

Assange’s mother “shudders to think” what CIA Director “Bloody Gina” Haspel might do to her son. In a recent interview, Christine Assange said, “Once in the U.S., the National Defense Authorization Act allows for indefinite detention without trial. Julian could very well be held in Guantanamo Bay and tortured, sentenced to 45 years in a maximum-security prison, or face the death penalty.”

In February 2018, weeks before his internet access was cut, Assange participated in the Austrian Elevate festival. Via videostream he referred to the “Pompeo Doctrine” of criminalizing transparency seekers as a “serious threat to the press.”

Assange said authorities were using his situation as a “general deterrent,” and added “the more developed the society and economy, the more skill in installing that fear without resorting to assassinations.” He concluded by observing that those who have the luxury of living in peace must see through “the illusions of fear in order to ensure that those people in other countries don’t face the reality of war.”

Criminal Behavior: US May be Developing Biological Weapons

W.T. Whitney Jr.

The United States has great tolerance for wholesale killings. Think Hiroshima and Nagasaki. Think civilians killed in Korea, Vietnam, Afghanistan, Iraq – in U.S. wars. Think biological weapons.

An article appearing October 4, 2018 in Science magazine deals with a U.S. Defense Department project named “Insect Allies” which began in 2017 and runs for four years. The Defense Advanced Research Projects Agency (DARPA)is providing four U.S. Universities with $45 million in funding to enable researchers to alter the gene make-up of plants grown as crops on farms. DARPA claims to be “addressing national security challenges in agriculture domestically and abroad.” Genes are being “edited”, says DARPA, so that plants can resist diseases, drought, floods, excessive heat, or “natural or engineered harmful biological agents,”

Yet the five authors of the report, evolutionary biologists and lawyers at German and French Universities, see the U.S. Defense Department as probably developing offensive biological-warfare capabilities. The United States, they explain, actually may be working on an innovative mechanism of genetic modification programmed to reduce productivity rather than to maintain or increase it.

The authors write that the “knowledge to be gained from this program appears very limited in its capacity to enhance U.S. agriculture or respond to national emergencies.” They condemn the project “as probably in violation of the Biological Weapons Convention (BWC), which took effect under United Nations auspices in 1975.

The 182 nations ratifying the BWC as of 2018 are committed to prohibiting the “development, production, and stockpiling” of such weapons. In 1969 President Richard Nixon announced that the United States would no longer be making offensive biological weapons.

The Science magazine report focuses on a new delivery system Defense Department researchers are using to transfer altered genetic material to crops in the field. The authors cite the BWC which says: “certain developments in science and technology have the potential for use contrary to the provisions of the Convention now or in the future. These developments include, inter alia…to develop novel means of delivering biological agents and toxins.” The idea of a “novel means” is crucial to what follows here.

For the reader to understand why the United States may be non-compliant with the BWC, some familiarity with relevant science is necessary. We review it briefly.

DARPA researchers are trying to insert altered genetic material into viruses, arrange for those viruses to infect certain insects, and then transfer the insects with doctored viruses to plants being grown for food. They are relying on a horizontal – or lateral – approach instead of the traditional one, which is to transfer the inheritance of genetic material vertically, from one generation of living things downward to the next. Whether taking place in the laboratory or in the field, the vertical method consumes time and money. The new, horizontal method is relatively inexpensive and is quick. It fits into one growing season.

DARPA’s process rests on two biological systems. One of them, known by the acronym CRISPR, utilizes sets of DNA sequences originating from the genetic material of single cell organisms. These are composed of DNA fragments from viruses that had infected those organisms. Under CRISPR, the sequences are combined with certain enzymes to achieve “editing” of the genetic make-up of an entirely different organism. And CRISPR enables those altered genes to be transferred to yet another life form.

The other system involves a virus known as a “horizontal environmental genetic alteration agent” (HEGAA). It contains genes modified as per CRISPR. That virus infects insects, specifically aphids, whiteflies or leafhoppers, and the insects are transferred to crops where they feed. Doing so, they insert the virus into the cells of plants, thus endowing them – CRISPR at work again – with new genetic material.  The plants thrive or fail depending on how humans engineered such material at the beginning.

In the Science magazine report, HEGAA technology is cast as one of the “novel means” proscribed by the BMW. The authors hold that gene modification achieved through HEGAA doesn’t fit with the intention proclaimed by DARPA, that of protecting U.S. agriculture. Any discussion of a project with such a purpose ought to have dealt with methods and arrangements pertaining to agriculture.

If indeed the Insect Allies program had been programmed as advertised, then consideration might have been given to regulatory mechanisms applying to food produced through HEGAA and about to enter national and international markets. That didn’t happen. Nor was there discussion of the full range of practical impediments to achieving benefits for agriculture.

There is silence also on the likelihood that HEGAA gene modification will lead to inconsistent results. The insects, for example, won’t reach all plants in a field and the outcome will be “quite different” from situations involving “laboratory-generated genetic modifications.” Gene modification via insects will likely affect crops other than the targeted ones. HEGAA technology also could end up reducing or finishing off seed production and leave no seeds to be marketed.  Seeds necessary for perpetuation of plant species might disappear. DARPA researchers discussed none of this.

The article points out that for normal plantings – even of crops that are threatened – the delivery of viruses by insects would work less well than delivery of viruses by overhead spraying equipment. Lastly, the authors, having noted that the researchers are allowing the virus-laden insects to survive for only two weeks, suggest that through simple modifications the insects’ lives could be prolonged for use in war.

These discrepancies, the authors say, signal the intentions of DARPA and the researchers and they are not about problems of maintaining or increasing agricultural production. The implication is that DARPA is developing the HEGAA system as a weapon of war.

The article concludes: “[A] party engaging in the development of biological agents for which a hostile-use case is plausible (or even obvious, in the case of the Insect Allies program) must present acceptable explanations that its research is only serving peaceful purposes.” The authors demand “robust explanations for the necessity of mandating insect dispersion in routine agricultural or emergency applications.” Without them, “Insect Allies risks being widely perceived as an attempt to develop a means of delivering HEGAAs for offensive purposes.”

University researchers working on the Insect Allies program “have publicly identified the target species for their experiments as maize— a crop upon which hundreds of millions of people rely for their basic nutritional needs, mainly in Latin America and Africa.”

News outlets reflecting scientific opinion criticized the program, as evidenced here and here. The U.S. mainstream media have not. The Washington Post, for example, communicated the DARPA program manager’s opinion that, “I don’t think that the public needs to be worried.” “That seems a stretch,” declared a Post editorialist commenting on weapons-production motives.  The New York Times reassuringly quoted the project manager: “This is biology we understand very well.”

While offering no direct proof that the U.S. government is developing biological weapons capability, the article illustrates the difficulty in assigning war-making purposes to technology with peacetime applications. And to tease out offensive purposes from research on defensive capabilities is no easy task. But the history and current manifestations of U.S research and development on biological weapons tell their own story.

Wider perspective

Research and development on biological weapons continued within the United States after 1975 when the BWC took effect, as evidenced by a report appearing in 2007 that mentions 400 bio-weapons laboratories operating in the United States. It notes the refusal by 113 U.S. biologic research institutions to comply with mandatory reporting requirements as to purposes of their microbiological research.

Currently a plethora of places and institutions are studying biologic agents, and apparently not for humanitarian or peaceful purposes. An extensive report dated April 29, 2018 from Bulgarian investigative journalist Dilyana Gaytandzhieva documents research activities the U.S. military carries out abroad. Accessible on her website and elsewhere, the report titled “The Pentagon Bio-weapons” provides circumstantial evidence of U.S. violations of the BWC.

Gaytandzhieva begins:

“The US Army regularly produces deadly viruses, bacteria and toxins in direct violation of the UN Convention on the prohibition of Biological Weapons. Hundreds of thousands of unwitting people are systematically exposed to dangerous pathogens and other incurable diseases.  Bio-warfare scientists using diplomatic cover test man-made viruses at Pentagon bio- laboratories in 25 countries across the world. These US bio-laboratories are funded by the Defense Threat Reduction Agency (DTRA) under a $ 2.1 billion military program… and are located in former Soviet Union countries such as Georgia and Ukraine, the Middle East, South East Asia and Africa. [DTRA] has outsourced much of the work under the military program to private companies.”

Her report is replete with images of U.S. facilities, victims, and U.S. military and intelligence documents. Her documentation of generous funding for the various projects and description of some of the microbiological species and illnesses don’t appear in the following summary.

She highlights the [Senator] Richard Lugar Center located near Tbilisi in Georgia and staffed entirely by U.S. citizens, all enjoying diplomatic immunity. Biologic specimens arrive by diplomatic pouch. At least three U.S. companies do research there for the Pentagon, CIA, and other U.S. agencies.

CH2M Hill and Battelle Companies operate bio-laboratories also in Uganda, Tanzania, Iraq, Afghanistan, and South East Asia. The latter company works in Armenia and at Fort Detrick in Maryland. Metabiota has laboratories in Georgia and Ukraine and formerly in West Africa.  The contracted research teams study a variety of disease-causing micro-organisms.

The Lugar Center has housed an insect facility since 2014 and “as a result Tbilisi has been infested with biting flies since 2015” and “flies similar to those in Georgia have appeared in neighboring Dagestan (Russia).” Researchers there study tropical mosquito species that transmit deadly viral illnesses. Those species are now showing up in Southern Russia, Northern Turkey, and throughout Georgia.

Lugar Center researchers study the anthrax bacillus, especially the strain engineered by Soviet germ warfare specialists. Gaytandzhieva disputes Pentagon claims as to the defensive nature of such research.She points to investigation at the Center of the “Genome Sequences” of the Soviet strain of the bacterium and to a U.S. history of developing anthrax as a weapon.

Tularemia is a subject of investigation, as are local ticks that carry tularemia bacteria, which the United States had once converted into a weapon. Crimean-Congo Hemorrhagic Fever (CCHF) is another possibly tick-borne disease.  Gaytandzhieva claims that study of that disease at the Center caused a “sharp increase of CCHF human cases in 2014” in the surrounding area.  There were 237 cases of the disease in Afghanistan in 2017, “41 of which were fatal.”  Lugar Center researchers work there too.

The Defense Department funds 11 bio-laboratories in Ukraine, where U.S. personnel work under diplomatic cover. U.S. funding extends to the Science and Technology Center in Ukraine that, supposedly an international entity, “supports projects of scientists previously involved in the Soviet biological weapons program.” Gaytandzhieva attributes sicknesses and deaths among Ukrainians to leakage from U.S. bio-laboratories of organisms causing hepatitis A, swine flu, and cholera – from a new strain.  

The journalist reports that the Birmingham-based Southern Research Institute  constructed and has operated U.S. bio-laboratories in Ukraine, and also in Germany, Azerbaijan, Cameroon, Thailand, Ethiopia, Vietnam and Armenia. The Institute has sponsored anthrax research and for decades was a prime Pentagon biological weapons contractor.

Stopping at nothing

Gaytandzhieva mentions experiments on Botulinum neurotoxin, anthrax spores, and aerosol delivery systems that Metabiologics Company conducted for the U.S. Army at Dugway Proving Ground in Utah beginning in 2007.  She concludes with a survey of heavily funded U.S. studies of emerging viruses, synthetic viruses, and genetically engineered pathogens. The Defense Department is researching “binary biological weapons (a lethal combination of two viruses), host swapping diseases (animal viruses that ‘jump’ to humans, like the Ebola virus), stealth viruses, and designer diseases,” which target particular ethnic groups.

The probability that the U.S. government fashions weapons delivering deadly microorganisms or their products has dire implications. First, U.S. democracy is at great risk. National elections held on November 6 were supposedly about people weighing in on the people’s business. But biological warfare apparently is someone else’s business. The public knows almost nothing about this aspect of U.S. war-making.  People don’t get to judge.

Secondly, U.S. use of massively lethal weapons apparently serves the interest of those in charge. If so, U.S. leftists would do well to regard U.S. imperialism as involving more than just foreign interventions and wealth extraction by rich countries. Force itself, it seems, has its own place in the imperialist scheme of things. Biological warfare is an enforcement mechanism. It threatens the death of many, as do nuclear war, carpet bombing, and climate change. They are crimes for which the masters of capitalist imperialism are responsible.

Climate Change Action Would Kill Imperialism

Manuel Garcia, Jr.

Climate change action would kill imperialism, and that is why we can’t have it in America.

American political power is based on fossil fuels, and the US military is the engine that consumes those fuels to produce that power. So long as there is an American political elite that craves lucrative personal prestige and the ability to dominate internationally, the US economy will be fossil-fueled capitalism that maintains the military colossus that enables and protects those elite ambitions.

US military-enabled imperial power is of two varieties:

first: the hard power that overtly invades and seeks to control territory to impose American capitalist domination, as for example capturing pipeline routes south through Afghanistan and Pakistan–away from China–out of Central Asian oil fields; the guarding of sea lanes crucial for petroleum transport west, as at Suez and the Strait of Hormuz, and east to Japan, Korea and Australia (if they behave); and the securing of scarce metal ore and rare earth deposits in Afghanistan and Africa (for elements used in solid state electronics); and

second: the soft power of buying compliance to US hegemony from client states by gifting them with arms sales that enable them to exercise their own mini-imperialistic ambitions, as with Israel’s threat-projection in the Levant that is consistent with US aims of regional control, and Zionism’s own manifest destiny colonialist mania of persecuting the occupied Palestinians and shrinking their reservations; and with arms sales to Saudi Arabia enabling its genocidal war against Yemen, and giving the U.S. leverage to induce the opulent Saudi royalty to keep oil production high and oil prices low on the world market, so as to grease Western capitalism and also undercut the revenue streams supporting Venezuelan socialism and Iranian economic development.

Because of the fracking (oil shale) boom of the last two decades, the U.S. now produces as much oil as Saudi Arabia and is energy independent as a fossil fueled economy, but hegemonic ambition compels it to seek global control of petroleum distribution because to control the flow of oil around the globe is to throttle the imperial ambitions and economic development plans of all others.

American imperialism, mediated by its military, is intrinsically fossil fueled. It is impossible to power the trucks, tanks, gun-carriages, helicopters, airplanes, missiles, drones, ships and submarines of the US military with solar and wind power; only fossil fuels will do. Nuclear power–also based on a fossil fuel, fissile uranium–is used to propel particularly large destruction-projection platforms, specifically missile-carrying submarines and aircraft carriers. Military vehicles require high energy-density fuels, to provide a high amount of energy at a high rate of delivery from relatively small volumes of fuel-matter, in order to propel them quickly (and inefficiently) despite the weight of their armaments.

“Green” forms of energy–solar, wind, hydroelectric–are intrinsically of low energy-density; they are spread out over large areas from which they are collected rather slowly, rather than being chemically concentrated into relatively compact masses, like coal, petroleum, natural gas and fissile uranium, which can be ignited to release their stored energy explosively. 

Local sources of “green” electrical energy can power civilian infrastructure almost anywhere, because solar, wind and even hydro power are widely available around the globe. All that is required is investment in and installation of appropriate energy collection technology, and a local area distribution network for electrical power. Green energy is intrinsically a socialist form of powering civilization, because the energy to be used locally can be collected locally, which frustrates the capitalist impulse to monopolize narrowly-defined sites of high energy-density fuel deposits – like coal and uranium mines, and oil and gas wells – and tightly confined electrical generation plants that meter out their electrical power through a web of long distance transmission lines.

The United States can only address the existential threat of global climate change by disavowing the imperialistic and self-aggrandizing ambitions of its political and corporate elite. That means deflating American militarism and its vast war industries complex by abandoning capitalism, which is exclusionary (privatized, extractive) fossil-fueled and speculation-dominated economics, and transforming the US economy to nationally and rationally planned green energy socialism: people over profits, an equalizing domestic solidarity over classist international gamesmanship.

Transforming the American political economy to green energy socialism would be very good for the American people, but it would be the death of American fossil-fueled capitalism, and thus of America’s rulers’ ambitions and privileges.

What we know today is that America’s political and corporate elite would rather see humanity end within a century than disavow its imperialistic and self-aggrandizing ambitions. Their obsession is to rule to the bitter end, a bitter end hastened by their obsession to remain in control. America does not have a robust permanent national commitment to contain, ameliorate and possibly reverse climate change and ecological deterioration because that would necessarily require the overthrow of Imperial America’s capitalist elite and its classist and racist mentality.

The revolution necessary to overthrow American capitalism and enable a national response to the climate change crisis would first require an amazing degree of popular consensus, psychological and intellectual maturity, moral courage, popular solidarity and personal commitment throughout the public, to sustain it through whatever struggle would be necessary to overpower its ruling capitalist paradigm.

Will this ever be possible?, or would any popular American eco-socialist uprising be snuffed out as pitilessly as was the Syrian Revolution? Regardless, is CO2-propelled climate change now so far advanced that it is beyond any human ability to stop? No one can really say.

We are each left with a choice between: defeatist acquiescence to capitalist-dominated climapocalypse, or the dignity of rebellious aspiration and activism for green socialism, regardless of whether or not it will ever be realized politically, and even if it is now precluded by Nature’s implacable geophysical forces that humanity’s blind self-absorption has set into karmic motion.

Budget dispute between Italy and EU escalates

Peter Schwarz

On Wednesday, the European Commission decided to launch an “excessive deficit procedure” against Italy. This must be agreed upon by all the finance ministers in the euro zone, which is by no means certain. Then it can drag on for months. But in the end, there could be fines in the billions.

The Italian government is insisting on its planned deficit of 2.4 percent in the 2019 budget. This was announced by Finance Minister Giovanni Tria in a letter to the EU Commission on November 13. Four weeks ago, the Commission rejected the Italian budget and requested a revision. Tria has since made some corrections. More money than originally planned is to flow into investments, and debt reduction is to be accelerated through the sale of public property. However, he is sticking to the deficit target.

In the past, the Commission has repeatedly initiated excessive deficit procedures, including against Germany and France, who had violated the rules for years. But they all came to nothing. In the case of Italy, things are different. With debt at 132 percent of gross domestic product, the country has the second-highest debt in the euro zone after Greece. If the financial markets react with further interest mark-ups on Italian government bonds, it could lead to a chain reaction of bank bankruptcies that could spread to the whole of Europe.

Unlike Greece, where European governments and the International Monetary Fund (IMF) raised a total of €263 billion to save creditor banks while the Greek population had to bleed for it, Italy, with a ten times larger economy, is simply too big for such action. The euro zone is threatened with failure if the crisis continues to worsen.

The Italian governing parties, the fascist Lega and the populist Five-Star Movement (M5S), are deliberately fuelling the conflict with Brussels to present themselves as defenders of the Italian people against the EU’s austerity dictates. Lega head Matteo Salvini stands out in this respect. Not a day goes by when he doesn’t rage against Brussels. “All we need are the inspectors, the UN blue helmets and the sanctions against Italy,” he told radio station Rai. He has called for a demonstration against the policies of Brussels on December 8.

This has benefitted him in the polls. With 32 percent, the Lega is now the most influential party and almost twice as strong as in the parliamentary elections last March. It is followed by the M5S, with 27 percent. The Democrats (PD), the largest opposition party, continue to flounder at 18 percent.

Salvini can base himself on two factors. The first is the role of the PD and its left-wing appendages, which over the past two decades have consistently implemented the EU’s brutal austerity demands, with devastating consequences for the Italian population. Real personal income is at the level of two decades ago, official unemployment is ten percent and living conditions for middle-aged people and younger generations are “eroded”, according to the IMF’s latest regular report.

The second factor is the role of Brussels and Berlin, which brand any social concession, however small, as a violation of the sacred interests of capital, while supporting rapid increases in military spending.

Typical of the provocative arrogance of the German media is a comment in Handelsblatt, which accuses the Italian government of “jealously ensuring that the expensive election promises are implemented: earlier retirement, the basic income and tax simplifications and reductions.”

However, neither the Lega nor the M5S are genuinely concerned with social improvements. Salvini’s inhuman approach to refugees, which has massively raised the number of deaths in the Mediterranean, is symptomatic of the government’s attitude toward the entire working class. And the basic income, the central election promise of M5S, is nothing more than an Italian version of the German Hartz laws. It is associated with a duty to work and drastic sanctions if the recipients do not declare themselves willing to accept any work, however bad it may be.

Both parties unconditionally defend capitalist private property and rely on the bourgeois and petty-bourgeois classes. Many observers therefore assume that they will finally give in after the European elections in May at the latest, if the pressure of the financial markets increases.

It was only a matter of time before the government in Rome gives in on the debt issue, predicted Manfred Weber of Germany’s (Bavarian) Christian Social Union (CSU), who leads the slate of the conservative European People’s Party in the European Elections. “The realities, the facts will rapidly catch up with Rome.”

The populist government will likely pursue the same course as Greek Prime Minister Alexis Tsipras and his pseudo-left Syriza-led coalition, which first confronted Brussels in the debt crisis and then gave in and imposed the EU’s instructions. But even if this is not the case, the nationalist course of Salvini and Di Maio leads to a dangerous impasse.

“Attempts to save economic life by inoculating it with virus from the corpse of nationalism result in blood poisoning that bears the name fascism,” wrote Leon Trotsky in 1933 in his essay, “Nationalism and economic life.”

The growing conflict between Rome and Brussels is part of the breakup of the European Union along national lines, which is also reflected in Brexit and the conflicts with Poland and Hungary. Throughout Europe, the ruling class is pursuing a policy of dismantling social protections, police build-up and militarism, relying more and more openly on fascist forces. In nine EU states, far-right parties are already in government.

The EU itself plays the leading role in imposing these polices, including demands for austerity, the build-up of a police state and the sealing of borders. It generates the centrifugal, nationalist tendencies it claims to fight. The working class can only stop this dangerous development by opposing both nationalism and the EU and fighting for United Socialist States of Europe.

Global conditions fuel Wall Street sell-off

Nick Beams

The wave of selling that hit Wall Street for the first two days of this week eased yesterday, as markets remained flat. It was significant, however, that gains made during the course of the day, which saw the Dow Jones index up by as much as 200 points, were lost by the close of trading.

The Dow shed a total of around 900 points on Monday and Tuesday, while the S&P 500 index dropped by 3.5 percent, with an 8.5 percent fall in the value of Apple, the world’s largest company by market value.

The market has been trending down since the start of October, led largely by high-tech stocks, the so-called Faangs—Facebook, Amazon, Apple, Netflix and Google’s parent company Alphabet—but this week the sell-off widened.

One factor appears to be that while companies have reported higher earnings and sales so far this year, there are doubts about whether this will continue in 2019 as the impact of the Trump administration’s corporate and income tax cuts begins to wear off.

The fall in Apple, for example, has been triggered by cuts in the production of its three latest models, released in September, with the company saying it would no longer issue figures for individual unit sales. Companies that supply the tech giant have reported reduced orders for components in the new models.

Apple has fallen by more than 20 percent since its high in October, losing $265 billion in market value, more than the entire market capitalisation of firms such as the drug company Pfizer, the Wells Fargo bank and the retail firm Procter and Gamble.

Overall, the Faangs have lost $1 trillion in market value since their October peaks, equivalent to almost half the value of the companies that make up London’s FTSE 100 index.

In another indication of the extent of the sell-off, the tech-heavy NASDAQ index has shed all the gains it made this year, a situation that is close to being replicated across the broader market.

While many causes are at work, the market turbulence is being fuelled by three broad global processes: signs of a slowing global economy after an upturn in 2017, the intensification of the trade war that centres on, but is not confined to, the conflict between the US and China, and tightening monetary conditions.

Last year, on the back of growth rate increases in a number of key global regions, the prospect was held out for “synchronised” world growth and a return to levels, if not reaching, then at least trending toward, those attained before the 2008 financial crisis. This has not eventuated. After a brief upturn, euro zone growth recorded its lowest level in the third quarter of 2018 for more than five years, with an actual contraction in the leading economy, Germany.

A further indicator of falling global demand and output is the fall in oil prices in recent weeks.

Following the 2008 crisis, the continued expansion of the Chinese economy, fuelled by government spending and a major expansion of credit, played a key role in propping up global capitalism, particularly commodity-exporting countries.

Now, China’s growth rates are down to their lowest levels since 2009, with little sign of any upturn as the government and financial authorities try to rein in debt growth. Financial markets have also fallen sharply, with the Shanghai Composite Index down 27 percent for the year.

While the Trump administration’s tariff measures have not yet had a major impact, the threat of their escalation hangs over the global economy. Senior US officials, such as US Trade Representative Robert Lighthizer, maintain that China must suffer more economic pain and bow to US demands.

Following the reports earlier this month that Donald Trump and Chinese President Xi Jinping had held a phone conversation on trade—after months of no communication between the two sides—and Trump’s tweets that he was hopeful of a deal, there was some guarded optimism of at least a limited agreement when the two met at the G20 summit at the end of next week.

But with US Vice-President Mike Pence’s attacks on China at the Asia Pacific Economic Cooperation (APEC) summit in Papua New Guinea last weekend, that is now considered unlikely, and the US will press ahead with an escalation of the 10 percent tariff on $200 billion worth of Chinese goods to 25 percent at the start of 2019.

The Financial Times reported yesterday that all eyes were now on the G20 meeting. “Combined with rising interest rates, clouds over global economic growth and political tensions elsewhere, investors are awaiting the meeting with a degree of trepidation,” it said.

Tai Hui, JP Morgan Asset Management’s chief Asia-Pacific market strategist, told the newspaper the divisions between the US and China revealed at the APEC meeting meant a “material breakthrough” on the trade tensions was “highly unlikely.”

The G20 summit preparations indicate the organisers expect that trade conflicts will dominate the agenda. In an effort to appease the US, the final communiqué’s initial draft omits a long-standing reference to resisting protectionism, while promising to “recognise the importance of the multilateral trading system” and work to “keep markets open and ensure a level playing field.”

If no agreement is reached to at least delay the planned tariff hikes, this will have a major market impact, especially on high-tech companies because of fears that an intensified trade war will adversely affect both their global supply chains and markets.

The third major factor in the market turmoil is rising interest rates and tightening conditions. The bull-run on Wall Street, which started in March 2009, when the market reached its low point after the financial crisis, is now the longest in history. It has been sustained principally by the supply of ultra-cheap money by the US Federal Reserve and other major central banks. The slogan during previous sell-offs has been “buy the dips,” based on the assumption that cheap credit would lead to an upturn.

But with the US Fed, together with the European Central Bank to a lesser extent, pulling back on cheap money policies, interest rates are starting to rise. According to an equity analyst cited by the Wall Street Journal, the “buy-the-dippers are getting concerned” and increasingly saying, “let’s sell everything.”

The Fed is expected to go ahead with a further 0.25 percent increase in its base rate when it meets next month and that expectation largely has been priced into market valuations. The key question will be whether, with official US unemployment rates at historic lows and fears that wages may start to rise, the Fed indicates that it will continue the rising-rate path next year.

If further rate rises coincide with a fall in revenues and profits as the Trump tax measures’ effect wears off, this could be the trigger for a recession. JP Morgan Chase now rates the probability of a recession in 2019 at one in three, compared with its assessment of between 8 and 27 percent a year ago.

Interest rate increases and tightening credit conditions are affecting the stock market already. Bloomberg reported that for “investors with a sense of history the most stomach-churning spectacle has been the deterioration of credit,” with a widening gap between the yield being demanded on corporate bonds and the return on US Treasuries.

Federal Reserve Bank of Minneapolis President Neel Kashkari, a long-time proponent of an easier monetary policy, has called for caution by the Fed. He told National Public Radio one of his concerns was that “if we preemptively raise interest rates, and it’s not in fact necessary, we might be the cause of ending the expansion,” thereby triggering the next recession.

If that were to occur, it would take place under uncharted conditions. No one knows what effect the unwinding of the historically unprecedented cheap money policies of the past decade could have both on financial markets and the economy as a whole.

Chinese president visits the Philippines

Joseph Santolan 

On Wednesday, Chinese President Xi Jinping concluded a two-day visit to Manila, where, in meetings with Philippine President Rodrigo Duterte, he signed a number of agreements which markedly increased diplomatic and economic ties between the two countries.

Among the deals signed was commitment to begin conducting joint exploration and exploitation of the oil resources of the South China Sea. Xi visited Manila in the midst of Washington’s continued escalation of economic warfare against Beijing and advanced preparations for direct military conflict.

Xi arrived in Manila from the Asia Pacific Economic Cooperation (APEC) summit where US Vice President Mike Pence issued a series of bellicose declarations against China, preventing the summit from arriving at a joint communique for the time in its history.

As it has throughout the Asia-Pacific region, Washington’s attempt to contain the rise of China and to reduce its massive economy to a semi-colonial status subordinate to US interests has riven Philippine politics. The dispute over increased ties with China and the intense pressure which Washington brings to bear upon any such moves within its former colony, have been at the heart of every major political dispute and corruption scandal over the past decade.

Former President Gloria Macapagal-Arroyo during her second term in office, from 2004 to 2010, sought to re-orient Philippine economic and diplomatic ties toward Beijing. She signed the Joint Marine Seismic Undertaking (JMSU) with China, a deal allowing for the joint exploration of the disputed South China Sea.

President Benigno Aquino III, of the Liberal Party, took office in 2010. Through a series of provocations against Beijing in the South China Sea and the filing of corruption charges against Arroyo and her political allies, he came to serve as one of Washington’s foremost proxies in the region.

The Aquino administration filed suit against China’s claim to the South China Sea in a case drawn up and argued by Washington before The Hague, and arranged for the return of US military bases to the country through the Enhanced Defense Cooperation Agreement (EDCA).

Duterte’s administration is a return to, and escalation of, the orientation of the Arroyo administration under conditions in which Washington has qualitatively intensified the danger of a global war. Whatever stance Duterte takes, it is being made on the frontlines of a rapidly worsening US-China confrontation. The personal and political volatility of the fascistic populist is, fundamentally, an expression of just how sharp the social and geopolitical crisis has become.

Speaking in Singapore to the Association of Southeast Asian Nations (ASEAN) Summit on November 15, Duterte stated that if war were to erupt in the South China Sea, “my country will be the first to suffer.” China, he declared “is already in possession” of the disputed waters, and the United States, with its repeated military exercises and Freedom of Navigation Acts, was “creating tension.”

Xi’s trip to the Philippines was the first state visit by a Chinese president to the country in 13 years, when Arroyo signed the JMSU deal. Speaking to the press in Manila, Xi described the relations between Beijing and Manila under Duterte as “like a rainbow after the rain.” At a banquet in his honor, Xi stated, “After President Duterte took office, our two sides have worked together to remove many obstacles. Our relationship has been turned around and put on the right trajectory.”

In addition to his talks with Duterte, Xi met with members of the Philippine legislature, holding a half-hour discussion with Gloria Macapagal-Arroyo, who is now Speaker of the House. Arroyo told the press that Xi’s visit would “provide a major boost to President Duterte’s envisioned massive infrastructure program.” She told Xi, “Infrastructure will be very important for the Philippines in the coming years. And there is no country in the world that matches China’s recent track record and capability in this area.”

Meeting with the members of the Philippine Senate and Congress, Xi stated that the deals which he was signing with Duterte would see increased traffic between China and the Philippines. He spoke of plans to bring more Chinese tourists to the Philippines and more Filipino teachers and nurses to China. More significantly, he declared that the agreements which they reached would transform the South China Sea into “a sea of friendship and cooperation.” Xi specifically called for a “maritime and air liaison mechanism” to allow the two countries to coordinate their naval and air movements in the disputed waters.

Over the course of his two-day visit, Xi signed 29 economic agreements, most for joint infrastructure projects and Overseas Development Assistance (ODA) loans from Beijing. Duterte has announced that the flagship project of his administration is a massive infrastructure project, which he has named “Build, Build, Build,” and which is officially projected to cost $US155 billion by 2022. The cornerstone of the proposal is Chinese investment.

The deals signed by Xi included the construction of a 639-kilometer railway linking Manila and Bicol, along with a number of other infrastructure projects, most slated to be funded by Chinese loans. The Chinese Steel Company, Panhua Group, signed a deal on the sidelines of the visit with Department of Trade and Industry (DTI) Secretary Ramon Lopez for the investment of $3.5 billion in the construction of a steel manufacturing plant to be based on the southern island of Mindanao, which is currently in its second year of martial law.

The most significant deal was a Memorandum of Understanding (MOU) which effectively revitalizes the JMSU, allowing for the joint exploration and exploitation of oil and gas resources in the South China Sea. According to a draft released to CNN by opposition Senator Antonio Trillanes, the deal calls for joint work between the state-owned China National Offshore Oil Corporation (CNOOC) and an as-yet-unnamed Philippine counterpart. Senate President Vicente Sotto III, tied to the Duterte administration, said that the Malacanang presidential palace had stated that the MOU agreed to a 60–40 sharing of mineral resources, with the majority share going to the Philippines.

The bourgeois opposition, gathered around the Liberal Party of former President Aquino, has raised an immense outcry over Xi’s visit and have denounced Duterte as a “puppet” of China. The hue and cry over national sovereignty in the “West Philippine Sea,” has reached a fever pitch.

Not one of these political figures cares a scrap for Philippine sovereignty, nor is there an anti-imperialist bone in their bodies. Washington established its direct colonial rule over the country in a bloody war of conquest that led to the death of over one million Filipinos. The politicians posturing in outrage over sovereignty are in their majority the heirs of the oligarchies brought to power by their former colonial master. Many of them likewise embraced the brutal wartime Japanese occupation. Aquino’s grandfather served as vice president of its puppet government. The hullaballoo over sovereignty and the vicious denunciations of China are being mobilized in service to US imperialism.

Opposition Senators Trillanes and Pangilinan declared that the MOU on the South China Sea violated the Philippine Constitution. Trillanes alleged that the deal had been drawn up by China. Presidential spokesperson Sal Panelo responded with a statement that it did not really matter who drew up the deal, but Duterte’s Secretary of Foreign Affairs Teddy Locsin, adopting the language of the president, declared, “Of course it f..king matters. I wrote it.”

Among the forces generally opposed to Duterte’s establishment of ties with China are the military brass, which have long historical ties to Washington. Duterte has stated his intention to defuse tensions with China by decreasing military exercises targeting Beijing in the South China. However, his Defense Secretary Delfin Lorenzana has, according to the New York Times, “quietly expanded the number of exercises it will conduct with the United States military next year.”

During Xi’s visit, Lorenzana oversaw a provocative live fire drill in the waters off the South China Sea, launching recently purchased Israeli missiles at “enemy ships.” He told the press, “We will use this technology to protect our seas.” When asked if he had deliberately timed the demonstration to coincide with Xi’s visit, Lorenzana ridiculously stated, “No. The weather was good.”

Arrest of Nissan chairman Ghosn roils global auto industry

Shannon Jones 

The arrest Monday by Japanese authorities of the leader of one of the world’s largest automotive alliances has drawn in the governments of France and Japan and shaken investors.

On Wednesday, a Japanese court extended the detention of Carlos Ghosn for an additional 10 days on charges of financial malfeasance, including hiding tens of millions in income from tax and other government authorities. Ghosn presides over an alliance of Japanese-based Nissan and Mitsubishi and French-based automaker Renault.

Prosecutors allege that Ghosn understated his income by about five billion Yen or $44 million in securities filings and that he used company assets for personal purposes. Authorities also arrested another Nissan executive, Greg Kelly, who they say helped in the scheme.

Under Japanese law suspects can be held for a period of time without the filing of formal charges and questioned by authorities without the benefit of legal counsel, though detainees can meet with attorneys.

Ghosn, who was credited with saving Nissan from bankruptcy, became a celebrity in corporate, media and political circles in Japan and around the world for his ruthless cost cutting. After a stint at Renault, Ghosn was assigned to Nissan where he carried out a restructuring involving the elimination of 21,000 jobs and the closure of five factories. Forbes anointed Ghosn “Businessman of the Year” in 2002 for his work at restoring Nissan to profitability. Later he carried out a similarly brutal restructuring at Renault earning him the appellation “Le Cost Killer.”

Ghosn stepped down as CEO of Nissan last year but remained the company’s chairman. He became CEO of Renault in 2005 and in 2016 he became chairman at Mitsubishi, receiving hefty compensation packages from all three companies.

The alliance sells some 10.6 million vehicles annually and if considered as a single entity was the largest auto producer in the world in 2017, ahead of Toyota, Volkswagen and General Motors.

The future of the Nissan, Renault, Mitsubishi alliance is now in question following Ghosn’s arrest. Nissan shares fell 15 percent on the news.

By some reports a full Nissan-Renault merger spearheaded by Ghosn was in the works, possibly just months away.

Opposition had emerged to the proposal for a Nissan-Renault merger. For one, the French government is a large shareholder in Renault and is unlikely to in effect cede control to Japanese-based Nissan, the most profitable of the three. There was also reported strong opposition on the Nissan board.

The arrest of Ghosn comes at a time when global automakers are under pressure because of slowing sales and the threat of disruptions due to trade war measures being enacted by the Trump administration in the United States and countermoves by the other major economic powers.

Moody’s credit ratings agency said that the arrest raised questions about Nissan’s governance and could affect its borrowing costs. Standard and Poors said it could lower the company’s credit rating. S&P said that Nissan’s profitability could suffer if it turned out that Ghosn’s alleged misconduct had hurt the company’s alliance with Renault and Mitsubishi.

The development of new technologies, including electric cars and autonomous vehicles, is sucking up enormous amounts of capital for research and development. It presages major changes in the auto industry whose ramifications are hard to foresee at this point. Whatever changes take place will entail sharp attacks on autoworkers.

Ghosn, a French citizen, was born in Brazil to Lebanese parents and was educated in France. His foreign heritage is unusual among CEOs in Japan.

There is speculation in some circles that Ghosn’s arrest may involve behind the scenes machinations by various parties, including possibly factions within Nissan. In a statement issued after Ghosn’s arrest, the Nissan board of directors said that CEO Hiroto Saikawa would introduce a motion to remove Ghosn and Kelly from their positions.

The Nissan board of directors is due to vote Thursday on the removal of Ghosn, and as of this writing appears to be divided on the issue. Many Renault senior executives are standing behind Ghosn and French President Macron indicated the government would not seek Ghosn’s ouster from leadership at Renault without proof that his illegal actions involved activities in France.

Meanwhile, Renault appointed an interim chairman and CEO to take over Ghosn’s duties while charges are pending.

The Lebanese foreign minister, Gebran Bassil, issued a statement saying he had instructed the Lebanese ambassador in Tokyo to follow the case and ensure fair treatment for Ghosn. Bassil said Ghosn “represents a model of Lebanese success abroad, and the Lebanese Foreign Ministry will stand by him in his crisis to make sure he gets a fair trial.”

There were apparently differences at Nissan over Ghosn’s focus on sales volume instead of profitability and quality. In particular, Ghosn sought to increase Nissan’s presence in the American market through heavy discounting. The new CEO at Nissan has questioned that approach.

The Ghosn affair is the latest of a number of scandals involving Nissan. In July the company admitted it had found that the majority of its factories in Japan had reported falsified emissions data. In 2017 the company acknowledged that it had allowed unqualified personnel to carry out preproduction tests at some of its plants, leading to the recall of vehicles.

Similar emission-rigging scandals have hit VW, Fiat Chrysler, GM, Daimler and Mitsubishi and Renault themselves.

Ghosn’s lifestyle illustrates the rapacity so typical of top-level corporate executives. He maintained homes in Paris, Amsterdam, Beirut and Rio de Janeiro and traveled around the world on a corporate jet. In 2016 he rented out the Grand Trianon at the Versailles Palace in France to celebrate his marriage to his second wife. The theme was based on Sofia Coppola’s film “Marie Antoinette” with guests dressed in pre-revolutionary costumes of the doomed nobility and featured extravagant desserts in homage to the queen’s supposed penchant for cake.

Nissan and Mitsubishi paid Ghosn some US$8.5 million in cash and stock and he received $8.4 million from Renault, enormous sums of money but still relatively modest in comparison to American CEOs. However, Ghosn’s compensation generated controversy in both Japan and France, where CEOs typically earn much less. Takeshi Uchiyamada, chairman of Toyota, for example, received $1.6 million in 2017.

In 2018 Ghosn agreed to take a 30 percent cut in compensation at Renault in order to ensure the backing of the Macron administration for another four-year term as head of the automaker.

According to a piece in the Washington Post one reason Ghosn may have sought to hide his income was to avoid further such problems.

Japanese broadcast organization NHK reported Nissan had paid Ghosn “huge sums” for luxury residences that were not for legitimate business purposes. The purchases were not declared on stock market filings while Ghosn did not pay, or underpaid, rent on the residences.

NHK alleged that nearly $18 million had been funneled through a Dutch subsidiary of Nissan to buy properties on the Copacabana strip in Rio de Janeiro and in Beirut. It went on to claim that Ghosn had secretly siphoned off money meant as compensation for other Nissan executives.

Kelly, Ghosn’s alleged accomplice and a reported “mastermind” of the scheme, is an American and the first US citizen to sit on Nissan’s board of directors. He first joined the company in 1988 as senior manager and associate legal counsel at Nissan North America. He was later named director of human resources.

These revelations only highlight how, under capitalism, the wealth produced by the sweat and blood of workers is squandered each day on to satisfy the grotesque appetite of the corporate and financial oligarchy.