US refuses to ground Boeing jet despite second crash in five months

Barry Grey

Two days after the crash of a Boeing 737 Max 8 commercial jet in Ethiopia that took the lives of all 157 passengers and crew members, the US government and American carriers that use the plane have refused to ground the recently introduced plane.

Boeing 737 MAX 8

This is despite the fact that another 737 Max 8 crashed in Indonesia just five months earlier under what appear to be similar circumstances, killing all 189 people on board, and that virtually every other major country around the world has decided to ground the aircraft and/or ban it from its airspace pending the results of investigations into the cause of the disaster. Only Canada has to this point joined with the US in refusing to ground the plane.

Ethiopian Airlines Flight 302 from Addis Ababa, bound for Nairobi, Kenya, crashed at high speed about six minutes after takeoff early Sunday morning, in clear weather with good visibility, after ascending, then descending, then ascending sharply again while accelerating to speeds in excess of what is standard during a takeoff. The CEO of the airline reported that the pilot, an experienced senior pilot with the company, radioed air traffic control that he was having “flight control problems” and asked permission to return to the airport before losing control of the plane.

The investigation is in only its initial stage and no definitive answer can be given at this time to the question of the cause or causes of the crash. The data recorder and cockpit voice recorder have both been recovered, but have not yet been read. However, the circumstances are ominously similar to the crash of a Lion Air Boeing 737 Max 8 last October, which plunged into the Java Sea only minutes after taking off from the airport in Jakarta.

Investigators have blamed that crash on a faulty sensor and automatic feature in the 737 Max models that points the nose down to avoid a stall, but about which the pilots had not been informed and which they were unable to override. As a result, the plane alternated between sharp descents and ascents until it dove into the water at 450 miles an hour. After the crash, pilots in both Indonesia and the US said they had no knowledge of the new autopilot program that Boeing had installed in the updated 737 model, and had not been trained in its use.

Boeing evidently installed the new automated program to compensate for problems connected to the new and much larger engine in the revamped 737. Boeing built the more fuel efficient model in order to compete with its archrival for control of global markets and profits, European-based Airbus, which had introduced its own A320neo to capture a bigger share of the lucrative medium-range commercial flight market. One of Boeing’s major selling points against the A320neo was the claim that the 737 Max 8 required virtually no additional training for pilots who had flown a previous version of the 737, and was therefore cheaper to bring into service.

The context for the introduction of the 737 Max 8 and Max 9 (a longer version) was a ruthless war for control of markets against Airbus, particularly the soon-to-reach $1 trillion Chinese air travel market, combined with a brutal cost-cutting drive within the United States. Since becoming CEO and chairman in 2015, Dennis Muilenburg (2017 compensation of more than $18,450,000) cut the workforce by nearly 7 percent in 2016 and another 6 percent in 2017. Airbus, for its part, announced 3,700 job cuts in 2018.

Muilenburg has also been squeezing Boeing suppliers, demanding price cuts of 10 percent or more, which has led them to intensify attacks on their own workers.

Given the circumstances of the two crashes of 737 Max 8 jets, it is clear that concern for the safety of passengers and staff and the general public, not just in the US but internationally, would dictate at least a temporary suspension of flights until mechanical flaws or other design defects could be ruled out. But Boeing and the US carriers that fly the 737 Max 8 and Max 9—Southwest Airlines, American Airlines and United—have all refused to pull the planes, insisting that they are perfectly safe.

Late Monday, after China and a number of international carriers had grounded the plane, the US Federal Aviation Administration (FAA) issued a “continued airworthiness notification” to Boeing 737 Max operators. At the same time, Boeing announced that it would implement a software update on the 737 Max 8 in the coming weeks to “make an already safe aircraft even safer,” by making changes to “flight control law, pilot displays, operation manuals and crew training.”

The US government is maintaining this position in the face of growing calls for a ban on 737 Max flights in the United States. The flight attendants’ union at American Airlines, which flies 24 of the Max 8 jets, took the token step Tuesday, undoubtedly under massive pressure from below, of calling on American CEO Doug Parker to ground the plane. The Association of Professional Flight Attendants also told its members they would not be forced to fly on 737 Max 8s if they felt unsafe. The pilots’ union at American, the Allied Pilots Association, told its members as well they did not have to work on these aircraft.

Among those individuals who have demanded that the FAA ground the plane are Jim Hall, former chairman of the National Transportation Safety Board, who said in an interview, “Because this is a new model and there are similarities with the two accidents, Boeing should put safety first and ground the aircraft.”

Also calling for a ban are Ray LaHood, transportation secretary under Obama; Democratic senators Dianne Feinstein, Elizabeth Warren and Richard Blumenthal and Republican Senator Mitt Romney; and consumer advocacy groups such as Consumer Reports and FlyersRights.org.

However, the priorities of the capitalist system have nothing to do with the safety and preservation of human life. There are immense financial interests bound up with the profitability and stock price of Boeing that far outweigh the danger of more destruction of human life and suffering for the victims’ friends and family. Further shifting the scale in the direction of cover-up and deception are the geo-political and economic imperatives of defending US national industry against foreign challengers.

Boeing stock accounts for a huge portion of the run-up in share prices since the election of Trump in November of 2016. This makes the protection of the company a matter of the greatest concern for the entire US financial elite. Shares of Boeing have tripled since the election, making it the highest priced stock in the Dow Jones index. From November 2016 through last Friday, when Boeing stock surpassed $422 a share, the Dow added 7,000 points, and Boeing’s rise accounted for more than 30 percent of the increase.

In the aftermath of the Ethiopian crash, Boeing stock fell 5.3 percent on Monday and another 6.1 percent on Tuesday. Even so, it is up 25 percent year-to-date. It has doubled since the beginning of last year. Under the cost-cutting drive and aggressive marketing overseen by CEO Muilenburg, Boeing set company records for earnings, cash flow and commercial deliveries in 2017 and pledged to do better.

It is the United States’ biggest single exporter, which makes it a central player in Trump’s trade war policy. Trump has repeatedly hailed Muilenburg, who has returned the praise.

During his recent trip to Hanoi, Trump posed for a photo with the Boeing CEO to celebrate a new order from a Vietnamese airline that included 100 737 Max jets.

And if Boeing is central to US imperialism’s global ambitions as well as the fortunes of the country’s banks, hedge funds and speculators, the 737 Max 8 is critical to the success of Boeing. It is the century-old company’s best-selling plane ever. It accounts for almost a third of Boeing’s operating profit. It is estimated that a full halt to deliveries could cost the company $5.1 billion, or 5 percent of annual revenue, within two months.

As of January, Boeing had more than 5,000 orders for the various versions of the 737 Max. According to the Wall Street Journal, analysts estimate that the Max 8 represents two-thirds of Boeing’s future deliveries and 40 percent of its profits. As far as the American ruling elite is concerned, it must be protected at all costs!

These facts point to the fundamental irrationality of capitalist private ownership of the airline industry and the division of the world market into hostile and competing national camps. It is a system that is incompatible with the provision of safe, affordable and comfortable air travel for the entire population.

The latest tragic and preventable air crash is further proof of the urgent need to expropriate the corporate ruling elite and transform the major corporations into public utilities operated under the democratic control of the working class so as to satisfy human need, not private profit.

Amid rising protests, Moreno government lays off thousands in Ecuador

Cesar Uco

The government of President Lenin Moreno, besieged by corruption charges, has embarked on an IMF-dictated austerity program entailing mass layoffs that is bringing it into increasingly open confrontation with the Ecuadorian working class.

The first round of layoffs, targeting 10,000 part-time and hourly workers, took effect on March 1. The most affected areas are education and healthcare. Agustín Lindao, leader of the National Union of Public Health Ministry Workers (Osumtramsa), reported layoffs of “2,500 to 3,500 between casual and temporary contractors, doctors, EMTs, nurses, pharmacy assistants, social workers and operation personnel.”

At least 1,000 workers saw their jobs terminated at the Ministry of Education, 200 of them in Guayas. At the Institute of Social Security (IESS), 500 employees were fired.

The layoffs are the first step by the Moreno government in meeting the demands of the International Monetary Fund (IMF) for sweeping austerity measures in return for a $4.5 billion deal signed with the financial agency on February 20.

The total cuts demanded under the agreement amount to 10 percent of the public workforce, or 50,000 jobs.

Last month, thousands of workers marched in the capital of Quito to denounce the threat of massive layoffs bound up with the IMF deal, as well as privatizations and a punishing rise in fuel prices.

The march was followed by a national strike called by the Ecuadorian trade unions on February 13 in the face of mounting anger among the workers.

Thousands of workers and peasants blocked traffic at several main arteries, burning tires, in Quito, Manabí, El Oro and Zamora, where they managed to partially stop commercial activities. Hispantv said the protest was “against Moreno for violating his government plan ... [which does not contemplate privatization of strategic areas] ... and supporting interventionism in Venezuela.”

Moreno became president in May 2017 and has seen his popularity plummet, from 77 percent when he first took office to 30 percent today, according to Reuters.

Moreno was the vice president and hand-picked successor of his predecessor Rafael Correa, who was first elected in 2007 after running as a self-proclaimed socialist on a populist program. The government’s reformist promises, made during the commodities boom, ran into the realities of falling oil prices and the deceleration of the Chinese economy.

The turn towards austerity measures directed against the working class begun under Correa has been rapidly accelerated under Moreno, who has broken with and turned against the former president.

The evolution of the Ecuadorian government, formerly included in Hugo Chavez’s “Bolivarian Alliance,” is part of the general receding of Latin America’s so-called “Pink Tide” of nationalist-populist bourgeois governments and the rise of right-wing administrations, including those of the fascistic former army captain Jair Bolsonaro in Brazil and the extreme right wing multimillionaire Mauricio Macri in Argentina.

Conditions for the working class in Ecuador are steadily deteriorating. A report issued this week revealed that the share of the country’s workforce employed in the so-called informal sector—without regular work, wages or benefits—rose to 46 percent last year.

Moreno’s turn to the right has been accompanied by a shift in policy towards Julian Assange, the founder of WikiLeaks, who has lived as a refugee in the Ecuadorian embassy in London since 2012. The increasingly onerous conditions imposed upon Assange, which began under Correa, have accompanied a bid by the Moreno government to achieve a rapprochement with US imperialism, including through support for the regime change operation in Venezuela. The threat is that Assange will become a bargaining chip in in this process, under conditions in which he faces espionage and/or conspiracy charges in the US that could result in his execution.

In the midst of carrying out the attacks demanded by the IMF on the working class, Moreno has been accused by the opposition, his formal allies in the bourgeois populist Revolución Ciudadana (Citizens Revolution) party, of embezzlement and corruption. Since he took office in May 2017, he has had three prime ministers. The first two resigned to face corruption charges; the current one is Jorge Glass, also out of the ranks of Revolución Ciudadana.

Representative Ronny Aleaga of Revolución Ciudadana House has filed a complaint against the president before the Ecuadorian prosecutor’s office over the purchase of a holiday property in Alicante, Spain.

Aleaga accuses Moreno of having established in March 2012 INA Investments, an offshore company based in the tax haven of Belize that was owned by his brother Edwin Moreno Garcé until it was dissolved in 2016. INA bought real estate, fancy cars, crocodile leather wallets and other luxury items.

However, what is significant about the investigation is that INA Investment did not limit itself to moving money so that Moreno’s family and its associates could live in wealth. The corruption case takes on a greater dimension in that INA was used to facilitate contracts with the state. The complaint filed by Representative Aleaga estimates that this was an operation involving about US$65 million.

Meanwhile, investigative reporters Christian Zurita Ron and Fernando Villavicencio revealed a transfer of US$18 million from Sinohydro, a Chinese state company, to the company Recorsa – managed by Lenin Moreno’s close friend, Conti Patiño, together with the president’s wife, Rocio Gonzalez – and Sinohydro received a contract from the Ecuadorian government for the construction of the Coca Codo Sinclair dam, east of Quito, the largest public infrastructure project in the country’s history, cost estimated at US $ 2.8 billion.

“We are seeing how the presidential family of Ecuador has given itself a great life with money coming from Sinohydro bribes, while the people suffer mass layoffs, fuel hikes, insecurity, ineptitude and indifference from the authorities,” Aleaga said in a recent radio interview.

Meanwhile, Moreno has accused his predecessor Correa of corruption, denouncing him for having paid close to US$5 billion for four projects whose real dollar value should have been about half that. Correa is also charged in Ecuador with responsibility for the botched kidnapping of an opposition lawmaker in Colombia. He has denied the charges, insisting that they are part of a political witch-hunt mounted by the Moreno government.

Mark Zuckerberg’s “Privacy Manifesto”: A brief for intensifying Internet and social media censorship

Kevin Reed

On March 6, Facebook founder and CEO Mark Zuckerberg published a statement entitled “A Privacy-Focused Vision for Social Networking” on the Notes tab of his personal page. Widely described as a “manifesto,” the document is a brief for ending the mass public exchange of ideas on social media platforms like Facebook, Instagram and WhatsApp, as well as across the Internet as a whole, under the guise of “protecting privacy.”

The manifesto begins with Zuckerberg emphasizing that he is “taking positions on important issues concerning the future of the Internet,” not just social media. He says that he is “working openly and consulting with experts across society as we develop this.” In other words, Facebook—which has grown to 2.7 billion users across the globe and has a Wall Street value of nearly $500 billion—is working with consultants at the highest levels of the tech industry and US intelligence establishments to develop its plan.

The core of the new strategy is the idea that an open and public social media environment—where all users can freely communicate with one another and share each other’s posts—must be replaced by a structure of one-on-one private communication between individuals. As Zuckerberg wrote, “Over the last 15 years, Facebook and Instagram have helped people connect with friends, communities, and interests in the digital equivalent of a town square. But people increasingly also want to connect privately in the digital equivalent of the living room.”

A second aspect of replacing the “town square” with the “living room” is dispensing with the Facebook timeline feature of stored posts. He writes, “I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever.”

In sum, Zuckerberg’s proposal amounts to a gigantic about-face for Facebook. The company that was founded in the 2004 with the mission “to give people the power to build community and bring the world closer together” will now be replaced by “a world where people can speak privately and live freely knowing that their information will only be seen by who they want to see it and won’t all stick around forever.”

Zuckerberg then elaborates on six technical and policy principles for putting the social media genie back in the bottle: private interactions, encryption, reducing permanence, safety, interoperability and secure data storage.

He makes clear that the new plan is being implemented on all of Facebook’s services and writes, “We understand there are a lot of tradeoffs to get right, and we’re committed to consulting with experts and discussing the best way forward.” He never gets around to explaining precisely what the “trade-offs” are that need so much attention.

After three years of continuous battering by the corporate media and Washington political establishment over “fake news,” unsubstantiated claims of Russian interference in the 2016 elections and numerous data privacy violations, Zuckerberg has dutifully drafted a plan intended to mollify his critics. However, from the standpoint of the ruling class, the real problem with Facebook is none of the above-mentioned transgressions.

The advisors that Zuckerberg is collaborating with—such as The Atlantic Council—are responsible for decades of false news, political meddling and mayhem in countries around the world and covering up public privacy violations. Meanwhile, the Wall Street valuation of Facebook is predicated upon the company’s ability to scrape social media profile information and tidbits of user behavior for sales and marketing purposes. Something much bigger and more threatening to the interests of imperialism and the stock market is behind Zuckerberg’s manifesto.

Under conditions where workers and young people around the world are using social media to communicate and organize their strikes and struggles—especially coordinating across industries and national borders—the ruling class has concluded that these open platforms are a significant menace and must be shut down as soon as possible. Thus Zuckerberg’s “trade-offs” involve a direct attack on online freedom of speech that he and his advisors must now repackage in the form of privacy protection.

Since Zuckerberg’s March 6 post, some in the corporate media have focused on skepticism that the plan can deliver on its ostensible goals. Others, such as Facebook critic Roger McNamee, have argued that the manifesto is a public-relations stunt designed to shore up investor confidence and push back calls for government regulation that would break-up big tech companies like Facebook, Google and Apple.

Nowhere in the official media response is there any connection drawn between Zuckerberg’s new vision and the blatant political censorship that Facebook has been engaged in for over two years. Under the guise of fighting “fake” accounts and implementing “harm prevention,” Facebook’s army of 30,000 censors and artificial intelligence bots have removed millions of user accounts and posts arbitrarily identified as inauthentic or misinformation.

As explained by the World Socialist Web Site in its Perspective of December 29, Facebook is today the global censor that decides what information is to be seen and read by billions of people all over the world. In particular, Facebook has specifically targeted accounts, pages and posts of a left-wing character, including those of writers of the World Socialist Web Site and members of the Socialist Equality Party.

The latest proposals from Zuckerberg are of a piece with these past practices. They represent a deepening of the collaboration between the tech industry—references to encrypted communications notwithstanding—and the military-intelligence establishment. Workers and young people should not accept the claims by Zuckerberg, the media or the political establishment that they will protect the privacy rights of the public. The new Facebook vision is part of ongoing efforts to track what people are talking about on social media and, at the same time, to prevent them from using the platform to organize and coordinate their struggles.

Boeing jetliner crashes in Ethiopia, killing all 157 passengers and crew

Eddie Haywood

On Sunday, a commercial aircraft carrying 157 passengers from Ethiopia’s capital city of Addis Ababa bound for Nairobi, Kenya crashed shortly after takeoff, killing all on board. The aircraft, a 737 MAX 8, was an upgraded 737 model manufactured by Boeing. The Ethiopian air disaster is the second such catastrophe for the Boeing model. Five months ago, last October, an Indonesian Lion Air jetliner, also a Boeing 737 MAX 8, went down, killing all 189 on board.

Informing the public of the crash, Ethiopian Airlines posted to its Twitter account: “The group CEO who is at the scene right now deeply regrets to confirm there are no survivors.” The message was posted next to a photo of Ethiopian Airlines CEO Tewolde GebreMariam at the site of the crashed aircraft holding a piece of the jet’s debris.

Ethiopian Airlines Flight 302 was bound for Nairobi, taking off from Bole International Airport in Addis Ababa at around 5:30 a.m. Flight conditions were reported as good with clear visibility. Almost immediately after takeoff the aircraft struggled to ascend at an adequate and stable speed, and according to FlightRadar24, the aircraft fluctuated wildly in vertical speed, going from zero feet to 1,472 feet per minute to dropping down to minus 1,920 feet, an extremely unusual pattern for takeoff.

The pilot of the aircraft sent out a distress call to air traffic controllers, who then cleared the jetliner for a return descent to the airport, before losing contact with air traffic control six minutes later and plummeting to the ground near Bishoftu, a town 47.9 kilometres (30 miles) southeast of Addis Ababa. As it slammed into the ground, the aircraft shattered into pieces, leaving a large, smoking crater.

What should have been a two-hour flight from Addis Ababa to Nairobi carried passengers from four continents, including a contingent of United Nations delegates who were traveling to a week-long United Nations Environment Assembly scheduled for today.

Among the passengers killed were 32 Kenyans, 18 Canadians, nine Ethiopians, eight passengers each from the United States, China, and Italy, seven from Britain, nine from France, and a small number from Egypt, Sweden, and the Netherlands.

The Boeing 737 MAX 8 aircraft involved in the disastrous crash was recently added to the Ethiopian Airlines fleet as part of the company’s expansion of its flights and updated aircraft.

Ethiopian Airlines is the largest airline in Africa, and has enjoyed a reputation for its low accident record compared to other competitor airlines across the continent. Up to 2014, Ethiopian Airlines had experienced only 322 fatalities due to various incidents since 1965.

Speaking to the media regarding the cause of the crash, Ethiopian Airlines chief executive Tewolde GebreMariam said, “At this stage, we cannot rule out anything.”

Personnel from the US Federal Aviation Administration, accompanied by staff from the National Transportation Safety Board were at the crash site on Monday, aiding the Ethiopian-led investigation of the disaster. The FAA told media representatives that Boeing would be part of the investigation, and the agency promised it would issue an update to operators of the 737 MAX 8.

On Monday, Ethiopian Airlines reported that the aircraft’s digital flight data recorder and cockpit voice recorder were recovered. An airline official stated that one of the recorders was partially damaged.

While investigators have not determined the cause of the disaster, according to the Associated Press , a witness to the crash reported that he saw smoke billowing from the aircraft before it hit the ground.

The witness, Tamrat Abera, told the Associated Press, “Before falling down, the plane rotated two times in the air, and it had some smoke coming from the back, then it hit the ground and exploded. When the villagers and I arrived at the site, there was nothing except some burning and flesh.”

Under similar circumstances, in October, a Lion Air flight departing Jakarta, Indonesia, Flight JT610, also a Boeing 737 MAX 8, went down minutes after takeoff. Before JT610 went down into the Java Sea, its crew sent a distress call to air traffic control reporting a malfunctioning of the aircraft’s data system, which caused the plane to suddenly descend. Moments after the distress call, air traffic control lost contact with its crew.

Amid fears of a widespread equipment defect peculiar to the 737 MAX 8 sparked by the two air disasters in quick succession, airlines in Ethiopia, China and Indonesia grounded all such aircraft pending further investigation. Late Monday, an official with Royal Maroc Air said that Morocco grounded its sole 737 MAX 8 aircraft.

On Monday, Boeing’s stock dropped 12 per cent on the news of the air disaster, recovering slightly by the end of the trading day to minus 7 per cent.

Attempting to assuage fears, Boeing stated that it saw no reason for the company to recall any of its 737 MAX 8 aircraft and declared the model was among its most popular aircraft and used around the world.

Boeing is one of the world’s largest aircraft manufacturers, and the biggest US exporter, posting $10.5 billion in profits in 2018.

While the direct cause for the air disaster in Ethiopia remains under investigation, the World Socialist Web Site in reporting last year’s Lion Air crash documented several equipment issues peculiar to the 737 MAX 8, particularly its automated mechanism Maneuvering Characteristics Augmentation System, equipment aimed at preventing the aircraft from stalling. If the flight’s data system indicates that there is a risk of stalling, the mechanism can automatically force the plane’s nose down independent of any action on the part of the pilots of the aircraft.

Along with the largest airlines carrying out a coordinated attack to slash wages and benefits of airline staff, the upgrade of obsolete and aging equipment is being put off in the effort to increase profits, contributing to numerous air disasters over the last several years.

What can be stated for certain is the Ethiopian crash is part of a broader crisis plaguing the transportation industry, as airlines slash operating costs to the bone, risking the lives of airline workers and passengers in order to increase corporate profits.

Algerian regime pledges fraudulent political “transition” as strikes spread

Will Morrow 

As mass strikes spread across Algeria for the second day, the regime issued a statement in the name of figurehead president Abdelaziz Bouteflika yesterday evening, postponing elections indefinitely and pledging that Bouteflika will not seek a fifth term.

The regime’s announcement is a fraud, meeting none of the demands of the workers and youth. While it claims Bouteflika will not stand again for re-election, this is to be achieved by extending his current term indefinitely. Elections previously scheduled for April 18 are to be postponed to at least after 2019.

The regime will appoint what it calls an “inclusive and independent national conference,” which is to draft a new constitution and set the date for new elections. An unspecified “government of national unity is to be formed.” Bouteflika—a political corpse who has not spoken publicly since a 2013 stroke and is widely seen as a figurehead for the ruling cabal in the military, security services and his family—is to oversee the new “constitutional institutions to ensure they adhere scrupulously to the accomplishment of their mission.”

The letter states that the postponement of elections is aimed at “appeasing tensions that have been revealed in order to open the way to generalised peace, quiet and public security.” It adds that the reshuffling of Bouteflika’s cabinet and a change in prime minister “constitute an adequate response to the expectations you have placed upon me.” These are implicit threats that an escalation of the strikes and demonstrations will be met with fierce repression.

Gen. Gael Salah was reported to be in the discussions prior to last night’s announcement. Last week, he threatened that the army stood ready to defend “security and stability” against “anything that could expose Algeria to unpredictable threats.”

The announcement was immediately hailed by the French government, the former colonial power, which maintains close ties with the regime and its security forces. The minister of foreign affairs, Yves Le Drian, said he “salutes the declaration of president Bouteflika, in which he announces he will not seek a fifth mandate and will take measures to renovate the Algerian political system.”

The ruling class in Algeria and internationally has been terrified by the direct entrance of the working class into the movement against the Bouteflika regime with the eruption of a general strike on Sunday, which deepened yesterday. The strikes have developed largely independently and outside the control of the trade unions, spread by workers online via social media.

Oued Ezzine gas workers enter the strike on Monday

Of particular significance is yesterday’s expansion of strikes in the oil and gas industry, which accounts for over 90 percent of Algeria’s export revenues. On Sunday, employees of GTP, a subsidiary of the state gas company Sonatrach, walked off the job in the Hassi Messaoud oil fields. A video on Facebook of the strike was viewed more than 100,000 times.

Yesterday, they were joined by workers at ENGAGEO, another Sonatrach subsidiary in the same region. One picture of ENGAGEO workers marching off the job shows a striker’s sign stating, “Un grand merci à Facebook!” Hundreds of workers at the Oued Ezzine gas complex in Adrar, central Algeria, entered the strike on Monday. Sonelgaz workers in Guelma carried out a sit-in outside their offices.

Sonatrach (ENGAGEO) workers enter the strike on Monday

The port city of Bejaia remained completely paralysed yesterday, with strikes closing the ports and every state administrative building and private company, excepting some medical facilities. The city of Tizi-Ouzou in the Kabylie region was also reportedly completely closed.

At the industrial complex in Rouiba, autoworkers at both Mercedes and the car and bus maker SNVI remained on strike. A report published yesterday by L’Expression revealed that the strike was initiated on Sunday when workers began picketing inside the plant and organised a vote to walk out. It reported that a march by the workers at both plants was tear-gassed by police.

Much of the capital Algiers remained shut down. The industrial complex at Baba Ali was closed. The metro was partially reopened, but trains to and from outside the city remained paralysed. Yesterday, a group of 15 major agri-food companies in the heavy industrial zone of Taharacht issued a joint statement demanding workers return to their posts at 5 a.m. today in order to avoid “a dangerous disruption to the” food market.

The trade unions responded to the eruption of strikes on Sunday by scrambling to regain control in order to suppress the movement. In Rouiba, the union covering workers at SNVI announced that it was calling a “four-day” strike beginning Monday, after workers independently initiated a five-day strike beginning Sunday.

In Tizi Ouzou, more than 20 trade unions gathered late Sunday night to pass a resolution declaring, the day after a general strike, that they “supported the movement.” They announced they were now “retracting their confidence” in Sidi Said, the long-time president of the General Union of Algerian Labour (UGTA), the main national trade union federation that has openly supported Bouteflika.

Sonelgaz workers in Guelma on strike for second day on Monday

The ruling class is particularly terrified at the emergence of working class strikes because it knows that such actions can rapidly spread throughout the entire Maghreb region and internationally, after a decade of escalating assaults on living standards, and under conditions of a resurgence of workers’ struggles around the world.

Benin Web TV reported yesterday that “on social media networks” in neighboring Morocco, “the support for the protest is visible.” Tunisia, to Algeria’s east, was shaken by a general strike of 700,000 workers last month. The protests in Algeria have been met by demonstrations of tens of thousands in Algerian communities around the world, including in Montreal, Canada, and in multiple cities in France.

The trade unions and the capitalist class that they defend know that the workers are entering into struggle not only against Bouteflika and his immediate gang of cronies. They are fighting against the social inequality, poverty and unemployment that they preside over, and are driven by the determination that their lives should actually materially improve.

That is why the trade unions are issuing nervous warnings that the workers should not raise “sectional” and “divisive” demands—i.e., for wage rises, social services, and jobs. Amar Hadjout, the president of the National Federation of Workers in Textiles, Leather and Clothing, told El Watan yesterday that “the demands must remain within the limits that are respectful of others, to have the capacity to overcome and defeat any divisions. We cannot lose sight of what has been achieved in the economic sphere.”

What is driving the working class into struggle? A report by the Algerian Human Rights League in 2015, based on a survey of 4,500 households, found that 35 percent of the population, or some 14 million people, live on a poverty wage of less than US$1.25 per day. Over 90 percent of households reported that their living standards have fallen since the decline of oil prices in 2014, and the average purchasing power of a family fell by 60 percent over that period. The unemployment rate for youth is almost a third, and more than two thirds of the population is below the age of 30.

Meanwhile, wealth has been concentrated in the hands of a tiny class of billionaires and multimillionaires that controls the regime and the opposition parties. The report stated that 10 percent of the Algerian population owned 80 percent of the country’s wealth.

Every faction of the political establishment, including the fraudulent “opposition” parties claiming to support the movement against Bouteflika, such as Louisa Hanoune’s Workers’ Party, is opposed to any struggle by the working class for its own interests. They all want to maintain the domination over society by the super-rich and seek only to secure a greater position for themselves in the regime and the distribution of the money taken from the working class.

The struggle developing in Algeria has an objective logic that is bringing the working class into conflict with the profit system itself and all of its political defenders. The only progressive solution to this situation lies in the seizure of political power by the working class in Algeria and internationally, and the overthrow of the capitalist system, and its replacement with socialism.

A US budget for worldwide war

Patrick Martin

The budget request made public Monday by the White House must be taken by the international working class as a serious warning. The US government is preparing for full-scale war abroad and savage attacks on the living standards and social benefits of working people at home. The most powerful imperialist state is seeking a record level of military spending, while demanding unprecedented cuts in spending on social necessities such as healthcare, education and the environment.

The Trump administration proposes to give the Pentagon an increase nearly double that sought by the military establishment itself—a 4.7 percent rise over current spending, double the 2.4 percent increase for which Defense Department officials had been planning. The dollar amount of the increase is $34 billion, while the Pentagon asked for only $17 billion.

Total US military spending of $750 billion would be larger than the 2018 military spending of the next 14 countries combined—China, Saudi Arabia, Russia, India, Britain, France, Japan, Germany, South Korea, Brazil, Australia, Italy, Israel and Iraq.

Perhaps the most startling and ominous figure in the budget request is the proposed increase for Overseas Contingency Operations (OCO), the all-purpose war-fighting category that includes funding for the US interventions in Afghanistan, Iraq and Syria, drone warfare across the wider Middle East and North Africa, and the US military buildup on the borders of Russia (European Deterrence Initiative). While the fiscal year 2019 budget provides $69 billion for OCO, the request for FY 2020 balloons to a staggering $164 billion.

Initial press reports, citing White House sources, claim that this is an accounting gimmick, reclassifying a significant portion of the regular Pentagon budget as OCO in order to allow the military nominally to comply with spending caps set in 2011 under a bipartisan budget agreement between the Obama administration and congressional Republicans, but routinely evaded in congressional budget deal-making since then. Under that scenario, the Trump administration would declare that it was now observing the caps, imposing them on domestic spending through a savage across-the-board cut of at least five percent. Meanwhile, overall military spending would soar, since money for the OCO is not counted towards the spending caps.

Whatever the truth of such assertions, funneling almost $100 billion more into Overseas Contingency Operations has implications far beyond Trump’s maneuvers with Congress, and would surely provoke alarm in Tehran, Moscow and Beijing. It would give the Pentagon more than enough money to fight a major war, such as an invasion of Iran or Venezuela, both targets of Trump fist-shaking in recent months, or North Korea, if the current talks between Washington and Pyongyang collapse completely. This vast sum could even be used to finance the initial stages of a war with China or Russia, if such a conflict did not immediately escalate into a world-destroying nuclear holocaust.

Moreover, given Trump’s ongoing effort to use the declaration of a bogus “national emergency” on the US-Mexico border to redirect Pentagon funds towards the building of his border wall, the creation of a gigantic $164 billion OCO slush fund would give the commander-in-chief virtually free rein for military operations around the world, or within the United States itself. For a sense of the scale of the war allocation, the $164 billion OCO fund by itself is roughly equal to the total military budget of China, at $168 billion, and nearly three times the $63 billion military budget of Russia. It would pay for Trump’s border wall many times over.

Specific military spending categories that have been reported include $104 billion for research and development, with the main focus on hypersonic weapons (missiles and planes flying much faster than sound), on artificial intelligence systems (cyberwarfare and automated battlefield weapons), and “space-based technologies.” The Navy will contract for two new Gerald Ford-class supercarriers, costing upwards of $13 billion apiece. The Air Force will buy upgraded F-15 fighter jets from Boeing and more F-35s from Lockheed Martin. Tens of billions will go to update and modernize US nuclear weaponry.

Then there is a $9.2 billion “emergency requirements” item that would “address border security and hurricane recovery.” The portion devoted to “hurricane recovery” is for past and future damage to US military facilities and the cost of deploying US military resources during and after a storm, not for civilian needs. And “border security” would give Trump yet another pot of money to fund the US-Mexico border wall, in addition to the $8.6 billion formally requested in the budget for that purpose.

While proposing this bonanza for the Pentagon, the Trump budget would impose the biggest cuts in Medicaid and Medicare in history, nearly $2 trillion over 10 years. Medicaid would be converted into block grants to the states, with spending increases limited to the rate of overall inflation, not the much higher rate of health care cost inflation, forcing almost immediate cuts by the states. In addition, the expansion of Medicaid under Obamacare would be repealed, cutting off health coverage for more than 10 million people. The total savings over 10 years are estimated at $1.1 trillion. Another $845 billion would be slashed from Medicare by slashing reimbursements to hospitals and other health care providers and eliminating “waste, fraud and abuse.”

According to a White House summary reported by the Washington Post, other federal social spending would be slashed even more in percentage terms, although by smaller dollar amounts: $327 billion over 10 years from food stamps, housing assistance and other means-tested programs; $200 billion from retirement programs for federal and postal workers; $207 billion from college student loan programs, including those that provide food and housing assistance; cuts of 32 percent from the Environmental Protection Agency, 22 percent from the Department of Transportation, 11 percent from the Department of the Interior, 12 percent from the Department of Education and 12 percent from the Department of Health and Human Services.

The response by congressional Democrats and the media to the Trump budget has been to focus on the $8.6 billion request for the border wall—the issue that was the trigger for a 35-day partial shutdown of the federal government that ended in late January. This is a deliberate diversion, allowing the Democrats to posture as intransigent opponents of Trump while they quarrel with him over a sum that represents less than two one-thousandths of a $4.6 trillion budget.

The Democratic leadership fully embraced Trump’s military budget as part of a bipartisan deal last year, and it is just as enthusiastically in support of the Pentagon this year. In fact, the Democrats have generally attacked Trump from the right on foreign policy, demanding a more aggressive stance toward Russia in Syria and Eastern Europe, against North Korea, and in opposition to China, particularly on trade.

Even on border security, the Democrats are in full support of further massive spending increases to deploy more technology and hire more Customs and Border Protection and Immigration and Customs Enforcement thugs to persecute immigrants, so long as it isn’t labeled as money for Trump’s wall.

The delivery of Trump’s proposed budget begins an entirely predictable and cynical sham fight in Washington. The Democrats will denounce the proposed cuts in Medicaid, Medicare and other social programs and vow to fight them to the death. They will ultimately do a deal with Trump that includes major new cuts in social programs, which do not, however, go as far as the White House proposals, in return for full funding for the US military-intelligence apparatus, the most reactionary and dangerous force on the planet.

Lawyer charged for exposing Australian war crimes in Afghanistan

Mike Head

A former Australian military lawyer, once a captain in Britain’s Special Air Service (SAS), has been charged over the alleged leak of documents to journalists containing evidence of war crimes committed in Afghanistan by Australia’s Special Forces.

David McBride, 55, appeared in the Australian Capital Territory Magistrates Court last Thursday, accused of leaks to Australian Broadcasting Corporation (ABC) and Fairfax Media reporters during 2014 to 2016.

The charges relate in part to an ABC investigation published in 2017, called “The Afghan Files: Defence leak exposes deadly secrets of Australia’s special forces.” It provided some detail­ about long-suppressed official investigations into alleged war crimes.

Most of the documents, which the ABC did not release, reportedly covered “at least 10” incidents between 2009 and 2013 in which military investigators summarily cleared Special Forces soldiers of killing civilians, including children, or other war crimes.

Among the investigations mentioned were cases relating to the death of a man and his six-year-old child during a raid on his house, and the killing of a detainee who was alone with a soldier.

In 2013, troops commanded by Australian SAS officer Andrew Hastie, now a Liberal Party member of parliament who chairs the Joint Parliamentary Committee on Security and Intelligence, severed the hands of alleged dead Taliban fighters. This followed a training session where soldiers were told such methods could be used for identification purposes.

Some of the atrocities, such as the killing of the captured detainee, were already known. Despite some derisory compensation payments, each incident inflamed popular hostility in Afghanistan to the Australian and other occupying forces. They also underscored the inherently criminal character of the US-led Afghanistan war.

McBride entered no pleas. Instead, speaking to the media outside court, he said he had admitted handing over the documents but would defend his actions on legal grounds.

“I saw something illegally being done by the government and I did something about it,” he said. “I’m seeking to have the case looking purely at whether the government broke the law and whether it was my duty as a lawyer to report that fact.”

McBride suggested a cover-up at the highest levels of the military. He stated: “I have a duty to look after Australia, if that means reporting illegal activity by the top brass of the ADF [Australian Defence Force] I’m going to do it… If I was afraid of going to jail, why would I have been a soldier?”

The ex-ADF lawyer said he first sought an internal inquiry through the defence department and then went to police. When police did not act, he went to the media. He said he gave the documents to the ABC, the Sydney Morning Herald and journalist Chris Masters, but only the ABC published a report.

The lawyer is charged with theft and three counts of breaching the Defence Act, for being a member of the defence force and communicating information. The charges, if prosecuted on indictment, have maximum penalties of an unlimited fine or imprisonment for any term.

McBride faces a further charge under Criminal Code secrecy provisions, which were expanded and subjected to harsher penalties as part of last year’s “foreign interference” legislation. Imprisonment for up to 10 years can be imposed for an “aggravated” offence of leaking official secrets that allegedly prejudice Australia’s military defence or security.

McBride said he had been living in Spain, but was arrested at Sydney airport last September after a brief visit to his daughter. He is next due in court on May 13.

The government and the military are insisting that McBride’s trial must be conducted in secret, in order to suppress the details of the leaked documents. A Legal Aid representative for McBride told the court that his office was having difficulty finding a lawyer with the necessary security clearance to represent McBride.

McBride’s actions point to concerns within the military-intelligence establishment itself that the abuses committed by the Special Forces in Afghanistan have been so egregious that they have publicly discredited the “elite” units, on which Australian and allied governments rely for military interventions.

After studying at Sydney University and Oxford, McBride joined the British army. He spent six years with the Queen’s household cavalry, and also served with the SAS and in Northern Ireland and Afghanistan. In 2002, he stood unsuccessfully as a Liberal Party candidate in a New South Wales (NSW) state election.

The ABC reported that some of the cases were being probed by an inquiry run by NSW Supreme Court judge Paul Brereton, an army reserve major general, which was set up in 2016 by General­ Angus Campbell, who is now Chief of Defence.

The leaked material provided only a partial glimpse of Australia’s war crimes. It was published by the ABC in an effort, accompanied by belated military inquiries, to clean up the reputation of the Special Forces by blaming a minority of “bad apples” supposedly caught up in a “warrior culture.”

In reality, any brutal “culture” in the ADF is an inevitable result of the neo-colonial wars of occupation in the Middle East, which treat the populations as a whole as the enemy and involve the killing of anyone who resists.

Accounts of war crimes committed by Australian Special Forces are not new. Internal investigations, in recent conflicts alone, go back to the Australian military intervention in East Timor in 1999.

The military’s actions have been whitewashed at the highest levels of the ADF, with the full support of successive governments. In May 2013, Stephen Smith, the defence minister in the last Labor government, rejected complaints by Afghan detainees that they were subjected to humiliating public searches of groin and buttocks areas, as well as poor food and cold cells.

Last June, in a damage control operation, the current Liberal-National government belatedly revealed a third closed-door inquiry into alleged war crimes. After a Fairfax Media investigation reported further killings by Australian commandos, the Defence Department announced that earlier last year, military chiefs commissioned David Irvine, a former intelligence chief, to conduct an inquiry.

This “independent assessment” was designed as another official cover-up, seeking to cloak the barbaric character of the US-led occupation of the impoverished country. Such wars necessarily require the recruitment and training of soldiers to become hardened killers.

In addition to Hastie, ex-military commanders are prominent throughout the political and military establishment. Duncan Lewis, the current Australian Security Intelligence Organisation (ASIO) director-general, is a former SAS officer.

Government Senator Jim Molan headed allied military operations in Iraq during 2004-05. A Labor Party MP and ex-minister, Mike Kelly, was a colonel and Director of Army Legal Services, which would have handled complaints against Special Forces members.

Brutal Special Forces operations are part of expanded preparations for use at home, as well. Alongside deployments to neo-colonial wars, the commandos train to suppress social unrest, in the name of combatting terrorism or “domestic violence.”

Milan, Italy: 200,000 march against racism

Marianne Arens

Around 200,000 people demonstrated last Saturday in Milan, Italy against the policies of the right-wing coalition government of Lega and the Five Star Movement (M5S) that close ports to immigrant vessels, let people drown in the Mediterranean and, with new laws, drive tens of thousands of immigrants into illegality.

The protest organizers estimate that nearly a quarter-million participants assembled in front of Milan Cathedral. Demands and slogans on colourful, hand-painted signs and banners read: “We all have the same blood,” “The world belongs to all,” “Stop racism” and: “Protect the people, not the borders.” Migrants who have to work as harvesters in Calabria carried posters with the inscription: “Stop exploitation.”

Protest in Milan, Italy

Many participants came in carnivalesque costumes, some in Matteo Salvini and Luigi Di Maio (M5S leader) masks. There were also several floats depicting migrants dying in the Mediterranean Sea. The motto of the demonstration, “First the people,” was directed against the battle cry of Minister of the Interior and Lega boss Matteo Salvini, “Prima gli Italiani” (Italians first). The protest was organised by an association of six social organisations and NGOs and supported by the mayor of Milan, Giuseppe Sala.

Sala is part of a network of mayors who reject the racist Salvini decree because they consider it unenforceable in their municipalities (Palermo, Naples, Florence, Milan and other major cities). In these Italian cities, opposition to the government is growing, and around 1,200 initiatives, NGOs, district groups, etc., publicised the Milan demonstration on the internet.

The organisers avoided any speeches at the demonstration, instead inviting singers, musicians and DJs to perform. At the end of the rally, they played Patti Smith’s “People Have the Power.”

Nevertheless, several prominent politicians from the so-called “centre-left camp” appeared on the sidelines of the rally to give interviews to the media in which they tried to present themselves as spokesmen for a “new left.”

“This is where the reconstruction of the Left begins,” claimed Mayor Giovanni Sala, himself an “independent” member of the political camp of former Democratic Party (PD) leader Matteo Renzi.

Also present at the rally were Maurizio Landini, head of Italy’s largest trade union, CGIL; governor of Tuscany, Enrico Rossi; and the previous and the new PD chairmen, Maurizio Martina and Nicola Zingaretti.

Zingaretti, who is also president of the Lazio region, was elected as the new leader of the PD after winning 70 percent of the over 1.5 million votes, and several journalists have already celebrated him as “the face of the other Italy,” who, they claim, will lead the resistance from below against the right-wing government.

In reality, Zingaretti is nothing of the sort. The 54-year-old has been a professional politician since he was 20 years old and stands for the PD wing that grew out of the Stalinist Partito Comunista Italiano (PCI). At the age of 17, he joined their youth organization, of which he became chairman, and since then he has participated in all the transformations and mergers of the PCI after the collapse of the Soviet Union: at the end of 1991 it was the Democratic Left Party (PDS), in 1998 the Left Democrats (DS) and in 2007, by merging with a Christian Democratic faction, the Democratic Party (PD).

Until last year, the PD held the leadership position in government under then-leader Matteo Renzi. It was Renzi’s interior minister, Marco Minniti (PD), who initiated the current racist course in Italy. Under Renzi and Minniti, the Mediterranean was completely sealed off and a deal was made with the Libyan Coast Guard to return migrants against their will, back to Libya where they are subjected to inhumane conditions, beatings, rape and starvation. It was also the Renzi government that began to put pressure on the sea rescue NGOs to illegalise rescue missions.

As a result of its social attacks on the working population, the Renzi government was so discredited in the end that the ultra-right Lega, supported by Beppe Grillo’s Five-Star Movement, was able to take power last June.

Significantly, Zingaretti owes part of his popularity as an opposition leader to the fact that his older brother, who looks like him, is the popular TV star Luca Zingaretti in the TV series “Commissario Montalbano.” This suggests that the current prestige of the new PD chairman is based on a misunderstanding and has little depth.

March in Milan, Italy

In fact, Italy is a deeply divided country, and the PD is just as responsible for this as the right-wing parties that now run the government.

Five million Italians live in total poverty, three times as many as 11 years ago, before the recession that began in 2008. At the same time, Forbes figures released on Tuesday have revealed the gigantic fortunes of the five richest Italians: Nutella king Giovanni Ferrero (US$22.4 billion), Luxottica founder Leonardo Del Vecchio ($19.8 billion), pharmaceutical entrepreneur Stefano Pessina ($12.4 billion), fashion designer Giorgio Armani ($8.5 billion) and the former head of government and media entrepreneur, Silvio Berlusconi ($6.3 billion).

“We have abolished poverty,” boasted Social Affairs Minister and Deputy Prime Minister Luigi Di Maio, who is also head of the Five Star Movement, last Wednesday. The reason for this was the introduction of the Reddito di Cittadinanza (citizen’s income). As of March 6, Italians may apply for the promised €780 a month.

However, this step will quickly lead to disillusionment among the needy. People will soon find out that the citizen’s income is nothing more than a bad version of the hated German Hartz IV system. Only Italians who declare themselves immediately available for work and who meet the impossibly strict examination of their income and assets will be entitled to receive the wage, while non-Italians are excluded.

Recipients of citizen’s income must accept one of three job offers, even if the offer forces them to travel 50 kilometres to work. The citizen’s income is booked on a special cheque card, which can only be used for cash withdrawals of up to €100 at a time and is limited to a maximum of 18 months. In addition, only those who are prepared to do at least eight hours of community service a week receive money. In the case of “abuse” of the benefit, they face severe punishment with up to six years imprisonment.

The most recent demonstration in Milan—like the one in Rome on February 9, in which workers, pensioners and school children demonstrated on a grand scale—shows that in Italy, as in the rest of the world, resistance is growing and the class struggle is reawakening.

However, it can only develop in a progressive way if it breaks with the bourgeois PD camp and its pseudo-left environment and advocates an international, socialist perspective. This requires the establishment of an Italian section of the International Committee of the Fourth International.

US jobs numbers highlight global growth concerns

Nick Beams

The surprise fall in US employment growth in February sent a chill through economic and financial circles, with the Dow falling by more than 200 points at one stage on Friday, because of what it could portend for the US economy amid a marked slowdown in the rest of the world.

Only 20,000 jobs were added to US non-farm payrolls last month, the lowest level in 17 months, well below economists’ estimates of an increase of 180,000. There was a large increase of 311,000 jobs in January and last month’s virtual halt may be something of a statistical blip, but it has been taken as a worrying sign.

Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, commented: “If the weakness continues next month and there’s no revision to this month, it’s a meaningful deceleration in the outlook for the labour market. Given what happened in the fourth quarter, it could be that companies now are at this point at least deciding to really curtail hiring.”

The fall in American jobs growth came amid signs of a rapidly slowing global economy. Last week the 36-member Organisation for Economic Cooperation and Development (OECD) cut its growth forecast for advanced economies in 2019 from 1.8 percent to 1 percent, with Europe taking the brunt of the downward revision. The growth forecast for the UK was cut from 1.4 percent to 0.8 percent, while that for Germany was reduced from 1.6 percent to 0.7 percent.

“The global expansion continues to lose momentum,” the OECD said in a statement. “Growth outcomes could be weaker still if downside risks materialise or interact.”

Among those risks are the failure of the British government to reach a deal with the European Union on Brexit, which could bring a recession and “sizeable negative spillovers” to other countries. China was another cause for concern. A sharp slowdown there would have “significant adverse consequences for global growth and trade.”

The Chinese government has lowered its forecast for growth in 2019 to between 6 percent and 6.5 percent—the lowest level in three decades—amid signs that exports are starting to slow. Raw data showed that exports for February dropped by 20.7 percent. Much of this was due to seasonal factors—the impact of the Lunar New Year—but even after these were taken into account the fall was a significant 5 percent.

There are signs of further weakness in China’s export markets with manufacturing purchasing managers’ indexes for both the euro area and Japan signalling a contraction in February, the first time that has happened in both regions since early 2013.

Tommy Xie, an economist at Oversea-Banking Corp in Singapore, told Bloomberg: “China is set to have a difficult time on trade, because on the US front there is the trade war, and on the EU front the economy is really weakening.” He said the 5 percent fall in exports “reflected the impact of the trade war and also a slowing global economy.”

The slowdown in the euro zone is most marked in Germany where factory orders unexpectedly fell in January by 2.6 percent, contrary to forecasts they would increase by 0.5 percent. The decline was caused mainly by weak demand for investment goods, particularly from outside the euro area, with domestic orders also in decline.

The German economy only barely avoided a recession in the last two quarters of 2018. The sharp contraction in growth across the euro zone resulted in the European Central Bank last week reversing its previous policy of a wind down in quantitative easing (QE) by offering cheaper money to European banks.

The decision came in the wake of the decision by the US Federal Reserve in early January to put the interest rate rises planned for 2019 on indefinite hold and ease the wind down of its asset holdings. The decision came in response to the sharp falls on Wall Street in December when stock markets had their worst result for that month since 1931 in the midst of the Great Depression.

The US market has since risen on the back of the Fed’s decision and the claims by President Trump and members of his administration that they are optimistic over the prospect of a trade deal with China. However, there are a number of warning signs about the underlying course of the US economy.

Last Friday, the Dow Jones Transportation Average fell for the eleventh consecutive session, its longest losing streak in 47 years. Because transport forms an integral component of the real economy, rather than the financial system, the transport index is regarded as an indicator of broad economic trends.

The Fed’s recent decision could be followed by other moves to try to boost US markets and the economy.

Bloomberg reported over the weekend that bond-fund managers had started to “whisper about the prospect of more Federal Reserve quantitative easing [through the purchase of bonds] in order to fight the next US downturn, underscoring just how acute concerns over flagging global growth have become less than three months after the central bank last raised interest rates.”

It cited recent remarks by San Francisco Fed President Mary Daly that, faced with another slowdown, the central bank may use asset purchases “more readily” and not just as a last-ditch measure. The prospect of further QE arises because, with interest rates being held at a range between 2.25 and 2.5 percent, the Fed has little room to manoeuvre to combat a downturn.

The longer-term structural changes in the US and global economy, which have led to the use of QE, were the subject of a Brookings Institution paper co-authored by former US Treasury Secretary Lawrence Summers last week.

It said that “real neutral interest rates” that neither stimulate nor suppress the economy may have declined by at least 300 basis points, or three percentage points, over the last generation.

“Our findings support the idea that, absent offsetting policies, mature industrial economies are prone to secular stagnation. This raises profound questions about stabilization policy going forward.”

There would need to be a wider tolerance of budget deficits and “unconventional monetary policies” to promote investment and maintain full employment.

In essence, this is an acknowledgement that the mechanisms through which the post-war capitalist economy in the US and internationally was stabilised have broken down. Consequently, the pumping of ultra-cheap money into the financial system, fueling speculation and parasitism, together with ever-widening social inequality, is not a temporary measure but must be made permanent.