John Deere demands further job cuts through “voluntary separation program”

George Gallanis

On Wednesday, farm equipment giant Deere & Company announced further plans to cut its workforce through a “voluntary separation program.” The announcement was made just prior to the release of Deere’s fourth quarter earnings, which showed lower net income.

The company revealed in August a plan to cut costs and boost profits through “organizational efficiency,” which the World Socialist Web Site warned at the time meant new rounds of layoffs and attacks on workers. Since then, 163 Deere workers have been laid off across Iowa and Illinois. Another 100 already temporarily laid off workers have had their layoffs extended and 300 workers have seen their hours and pay cut by being forced to downgrade to lower-level roles.

Deere is seeking once again to make workers sacrifice in the name of boosting profits. In this they can count on the full collaboration of the United Auto Workers (UAW), the nominal bargaining agent for 11,200 Deere workers.

In the fourth quarter, ending November 3, 2019, Deere reported net income of $722 million, or $2.27 per share, down from last year’s fourth quarter earnings of $785 million, or $2.42 per share.

Deere warned of further decline in sales, threatening more cuts for the coming year. For the 2020 fiscal year, Deere forecast agricultural equipment sales falling between 5 percent and 10 percent and construction equipment sales declining by as much as 15 percent.

“John Deere’s performance reflected continued uncertainties in the agricultural sector,” said John C. May, Deere’s new chief executive officer. “Lingering trade tensions coupled with a year of difficult growing and harvesting conditions have caused many farmers to become cautious about making major investments in new equipment. Additionally, financial services results have come under pressure due to operating-lease losses.”

Trade war between China and the United States has lowered export incomes of American farmers. According to the American Farm Bureau, in 2017 China imported $19.5 billion of US farm produce. The following year in 2018, China imported $9.1 billion worth of US farm produce. Last year, US shipments of soybeans to China fell to a 16-year low as China bought soybeans largely from Brazil.

A record-setting wet growing season played a large factor, decreasing crop yields for large sections of the American farm belt. The US Department of Agriculture reported some 19.4 million insured acres across the United States went unplanted due to the rains, the highest since the government started tracking it in 2007. American farmers filed a total of 535 Chapter 12 bankruptcy filings, a spike of 13 percent, or 60 bankruptcies, in the past 12 months, the highest since 2012.

Under the newly announced “voluntary separation program” certain segments of the salaried workforce are being threatened with possible involuntary layoffs in the future if they don’t quit, or “separate.” Workers who quit will receive a monetary exit package. The program is intended to reduce the proportion of more senior and higher paid workers.

Ken Golden, Deere’s director of global public relations, said, “Some employees working in precision technologies and other new product programs are examples of those who are not eligible. However, for those who are eligible, the program is offered to employees of all tenures of service.” He continued, “Deere is deploying this voluntary separation program to create a leaner, more focused organization that is more agile and has the skills and competencies needed for the future.”

Deere did not state how many workers would be offered voluntary separation packages. Workers who receive the offer have until the end of the company’s first quarter of the fiscal year 2020 to accept.

Deere is able to slash its workforce knowing full well the UAW will do nothing to oppose it. This is because the UAW operates as an extension of Deere, serving as its managerial arm in enforcing company discipline. In 1997, the UAW imposed a two-tier wages and benefits system, which paid workers hired after 1997 significantly less for doing the same job as those hired before.

Using the same lie also used to ram through sell-out auto contracts, Deere and the UAW told workers the two-tier system was a temporary sacrifice to maintain profits. Since then, Deere has reaped billions.

In 2015, the last UAW-Deere contract negotiation, workers were again told they had to make sacrifices for Deere. The six-year contract imposed by the UAW maintained the hated wage and benefit tier system and increased out-of-pocket healthcare costs. It paved the way for wave after wave of job cuts at the company in the following years. Former UAW-Fiat Chrysler Vice President Norwood Jewell, who has since been sentenced to a token 15 months in prison for his role in the UAW corruption scheme, oversaw the 2015 sellout contract at Deere.

Many Deere workers expressed concerns over potential ballot fraud during the 2015 contract ratification process and called for a recount. At one local, the UAW suspiciously announced the contract was passed by a margin of 51 percent “yes” to 49 percent “no.”

Two years later, after workers were forced to accept a concessionary contract, as the UAW proclaimed, to help Deere stay competitive, the company announced plans to purchase the German-based Wirtgen Group, the largest international road construction equipment maker, for $5.2 billion in cash.

Meanwhile, in December 2017, President Donald Trump signed the Tax Cuts and Jobs Act, which slashed corporate tax rates from 35 percent to 21 percent. In 2018, Deere, instead of paying taxes, was refunded $268 million from the US government.

Deere has also engaged in a stock buyback spree, purchasing $400 million of its own stock to inflate share prices and boost returns to investors and top executives. Former Deere CEO Samuel Allen received a total compensation of $18.2 million in fiscal year 2019. Meanwhile, even as Deere continues its attacks on workers, the company has maintained its dividend payouts to its shareholders.

The growing threat to jobs must be met with a counteroffensive by workers. The UAW has again and again demonstrated that it is a bitter enemy of workers, so workers must take this fight into their own hands by forming rank-and-file factory committees independent of the union. Deere workers must appeal to their brothers and sisters at Caterpillar and the Detroit-based auto companies and other sections of workers in the US and globally to organize a united struggle in defense of jobs and living standards.

Imperialist powers intensify pressure on Iranian regime in wake of protests

Jordan Shilton

French Foreign Minister Jean Yves Le Drian announced this week that Paris is considering triggering a mechanism in the Iran nuclear accord that would facilitate the imposition of United Nations sanctions on Tehran. The provocative declaration is the latest example of a concerted drive by the imperialist powers to intensify pressure on the bourgeois nationalist Iranian regime following the outbreak of protests against fuel price hikes earlier this month.

“Every two months, there is another dent (in the deal by Iran), to the point where today we ask ourselves, and I’m saying this very clearly, about the implementation of the dispute resolution mechanism that exists in the deal,” stated Le Drian during a parliamentary hearing. The French foreign minister was referring to steps taken by the Iranian regime to reduce its compliance with the 2015 nuclear accord—steps that have been provoked by Washington’s abandonment of the deal and the European powers’ refusal to abide by trade and investment commitments they made as part of the agreement.

Le Drian also cited unsubstantiated claims that Iran has sponsored attacks on Saudi interests in the region, an apparent reference to the as yet unexplained attacks on a series of oil tankers in the Persian Gulf this past summer and the firing of missiles by Houthi rebels from war-ravaged Yemen at Saudi oil infrastructure.

The reality is that the escalation of tensions with Iran arises from US imperialism’s reckless drive to consolidate its control over the world’s most important energy-producing region. Over the past 30 years, US imperialism has laid waste to entire societies across the Middle East and Central Asia, from Iraq to Syria and Afghanistan, in a desperate effort to offset its global economic decline with military force.

Far from being a peaceful move, the Obama administration’s support for the Iran nuclear deal in 2015 was aimed principally at bullying Tehran into submission while maintaining Washington’s right to launch provocations and outright military attacks at any time. Obama himself admitted that the only alternative to the agreement was war.

Trump’s abandonment of the nuclear deal last year has been combined with the increased deployment of US military personnel and equipment to the region. At the same time, Trump has strengthened Washington’s support for the despotic Saudi regime, the Gulf states and the right-wing Israeli government, with the aim of pushing back Iranian influence in the Middle East and preparing for military conflict.

Le Drian’s latest comments underscore that the European powers are prepared to resort to no less ruthless means to achieve their interests. Although they opposed Trump’s departure from the nuclear agreement and pledged to create a financial mechanism that would permit Iran to trade with Europe, the pledge was quickly shelved.

Iran has responded, as it is entitled to do under the 2015 agreement if the other parties fail to fulfill their obligations, by reducing its compliance with the restrictions on its nuclear activities. Tehran is now operating 60 IR-6 centrifuges, which were prohibited under the deal and can enrich uranium 10 times faster than other centrifuges. President Hassan Rouhani has also indicated that Iranian scientists will soon start injecting uranium gas into 1,000 centrifuges at a secret facility.

Not to be outdone by its French counterpart, US imperialism has seized on the recent protests in Iran to further intensify tensions. On Tuesday, US Secretary of State Mike Pompeo seized on the protests to accuse the bourgeois-clerical regime of “human rights” abuses. Pompeo asserted that the US government had received some 20,000 messages documenting the violent suppression of the protests, but avoided commenting on details. He went on to threaten the imposition of further sanctions on Iran for “human rights abuses.”

It is indubitable that the imperialist powers, led by the United States, are endeavouring to foment violent, right-wing opposition to the Iranian regime to advance their own reactionary agenda, which includes the economic crippling of the Iranian regime and preparations for war.

That being said, the opposition of growing numbers of workers and poor to the Iranian government is being driven by mounting social tensions. While chief responsibility for the deepening social and economic crisis in the country of 80 million people lies with the brutal sanctions imposed by the imperialist powers, the crisis also underscores the reactionary character of the bourgeois nationalist regime, which is stepping up its attacks on the working class as it seeks to manoeuvre for a deal with the major powers.

Interior Minister Abdolreza Rahmani Fazli acknowledged this week that around 200,000 people joined the protests, which led to the shutting down of internet service for close to a week. Some 7,000 protesters were detained by the regime. According to Amnesty International, at least 143 protesters were killed by the authorities’ violent crackdown on demonstrations. However, Tehran has challenged this figure, alleging that only a dozen or so people were killed in what they characterized as violent clashes between thugs and security forces.

It is also alleged that over 700 banks and 50 military bases were attacked across the country. Anger at privately owned banks has reportedly increased due to a series of corruption cases in which customers have lost money.

The hiking of fuel prices by 50 percent has had a ripple effect on prices for other commodities. Rice, oil, bread and dairy products have increased by between 5 and 10 percent.

The country’s official news agency reported that costs for transport, messenger services and moving goods have jumped by 50 percent. The rial, Iran’s currency, has tumbled from 32,000 per US dollar when the nuclear agreement was struck to 126,000 per dollar today, making costs for basic necessities even more unaffordable.

When the protests initially broke out, government officials, including President Rouhani, acknowledged that people had a right to be angry at the price hike and to protest. Seeking to quell the opposition, the government began making payments into Iranians’ bank accounts, stating that up to three quarters of the population would be eligible for financial support to help offset the increased cost of fuel. However, the regime appears to be retreating on this pledge, with Minister of Labour and Welfare Mohammad Shariatmadari declaring that the government will have to review the bank accounts, assets, and trips abroad of all Iranians to determine eligibility.

While implementing attacks on workers and the poor, the Iranian regime is also responding to the stepped-up pressure by the imperialists by deepening its strategic and military cooperation with Russia and China. Admiral Hossein Khanzadi, commander of the maritime branch of the Iranian army, recently announced that Iran, Russia and China will conduct joint military drills in the Indian Ocean in the near future. Planning meetings between the three countries for the exercise were completed in October.

“A joint war game between several countries, whether on land, at sea or in the air, indicates a remarkable expansion of cooperation,” stated Khanzadi. “[The drills] carry the same message to the world, that these three countries have reached a meaningful strategic point in their relations,” he added.

The admiral went on to declare that the exercise would help secure “collective security” in the region.

There can be no doubt that US imperialism and its allies, through their provocations and bullying, are chiefly responsible for the tense standoff in the Persian Gulf and the mounting threat of war across the region. But the claim made by the Iranian regime that “collective security” can be achieved by establishing a closer military alliance with Beijing and Moscow is reactionary through and through. Such a development merely increases the likelihood that a US-instigated provocation could rapidly escalate into a region-wide conflagration that would quickly draw all of the major powers into a catastrophic war fought with nuclear weapons.

Mercedes-Benz to cut more than 10,000 jobs

K. Nesan

Mercedes-Benz, the best-selling premium automotive brand in the world, announced Friday that it will slash more than 10,000 jobs over the next two years.

Daimler Director of Labor Relations and member of the Board of Management Wilfried Porth announced that “the total number worldwide will be in the five-digits.” In a teleconference with the media, Porth stressed that the process of staff reductions had to be completed by the end of 2022.

The announcement of mass layoff comes two weeks after CEO Ola Källenius announced, to the applause of investors in London, that the company would implement an austerity program to reduce personnel costs by 1.4 billion euros. After two profit warnings in recent months, Källenius promised shareholders and investors that he would do everything necessary to increase their returns.

Mercedes-Benz, founded in 1928 in Stuttgart, employs 300,000 people worldwide and 180,000 in Germany. Baden-Württemberg, a state in southwest Germany, the centre of the German car industry, will be hit particularly hard by the measures. A significant number of car parts producers such as Bosch are dependent on auto manufacture. Overall, some 460,000 workers are employed in car-related industries in Baden-Württemberg alone.

Daimler corporate head office

The announcement is part of an onslaught on jobs in the German and international auto industry. This year alone, 570,000 jobs have been eliminated in India and China. On Tuesday, the German carmaker Audi, a subsidiary of Volkswagen, announced the elimination of 9,500 jobs over the next five years. On Wednesday, BMW announced cuts of more than 12 billion euros ($13.23 billion) by 2022, and on Thursday Bosch announced it will slash another 500 jobs in the city of Reutlingen.

Volkswagen has eliminated 30,000 jobs over the past three years. Ford is currently eliminating 12,000 jobs in Europe and 7,000 in North America. Nissan is cutting 12,500 jobs worldwide. General Motors is closing four plants in the US and Canada and slashing 8,000 jobs.

Growing numbers of workers all over the world are resisting these attacks. In Matamoros, Mexico, tens of thousands of highly exploited workers in the auto parts industry struck for several weeks against both the companies and the unions earlier this year. In the US, 48,000 GM autoworkers participated in the longest auto strike in 50 years. Strikes by autoworkers have also taken place in India, China, Romania, Hungary, the Czech Republic, Germany, France, Britain and other countries.

But wherever these militant struggles break out, they immediately come into conflict with the trade union bureaucracy, which isolates them and sells them out. Germany’s IG Metall, the United Auto Workers in the United States and the other unions long ago ceased to be workers’ organisations that struggle for social improvements and reforms. Instead, they function as a labor police force in the plants, tasked with imposing management’s demands.

The automakers and trade unions justify the attack on jobs and wages by pointing to the global decline in sales and the restructuring of the global auto industry with the introduction of electric and autonomous vehicles. In a statement, Daimler declared, “The automotive industry is in the middle of the biggest transformation in its history. The development towards CO2-neutral mobility requires large investments.”

These drastic measures, which will devastate the lives of hundreds of thousands of workers and their families, have the full backing of the IG Metall union and works council, which collaborated with management in working out the details of the layoffs behind the backs of the workers. When Porth announced the Daimler job cuts, he boasted, “With the key points for streamlining the company now agreed with the works council, we can achieve this goal by the end of 2022.”

Porth refused to give further details on the agreement with IG Metall and the works council. How exactly the key points will be implemented will be worked out in the coming weeks, he said.

According to media reports, however, in addition to the streamlining measures, Daimler and the works council agreed to further personnel cost reductions. Among other things, there will be offers to employees to reduce their weekly work hours. Workers with 40 hours a week will be forced to work fewer hours with less compensation. The company will extend expiring employment contracts for temporary employees in administration only on a very restricted basis. Equally restrictive will be the 40-hour fixed-term contracts for permanent staff.

Two Daimler workers who spoke to the World Socialist Web Site said they learned of the cuts only through the media. Both reported that intense negotiations between management and IG Metall have been taking place since Källenius became CEO six months ago. The workers were convinced that the company chose Friday to announce the cuts in order to avoid worker unrest in the factories. IG Metall has called a works assembly for Monday in the Hans-Martin-Schleyer-Halle, one of the biggest facilities in Stuttgart.

WSWS Autoworker Newsletter campaigners at the Mercedez-Benz plant in Sindelfingen

Daimler is relying on the services of IG Metall to push through its plans. Last Friday, IG Metall organized a so-called day of action on the Schlossplatz in the centre of Stuttgart to dissipate the anger of workers, who are increasingly denouncing the union and its works councils. But even there the union bureaucrats were not able to hide the fact that they are functioning as co-conspirators with the company in planning and implementing the attacks.

IG Metall Regional Director Roman Zitzelsberger offered the collaboration of the union, declaring, “All employers must know: shaping the future is only possible together.” He continued, “Change is coming, and we must not bury our heads in the sand.”

Zitzelsberger, a member of the Daimler Advisory Board with an income of 213,700 euros last year, is currently the chief negotiator for IG Metall in talks with the employers’ organisation Industrieverband Südwestmetal on cost-cutting plans and staff reductions at 160 metal companies in Baden-Württemberg.

The vice-chairman of the General Works Council, Ergun Lümali, made clear that the union fully supports the mass layoffs and is concerned merely that the restructuring be implemented as effectively as possible: “We don’t just want to have a debate about people. The focus of personnel cost reduction must be on improving processes and work flows,” he said.

The mass layoffs at Daimler and the role of the trade unions in imposing these attacks once again underscores the need for workers to develop their own independent response to the jobs massacre in the international auto industry.

In a recent Perspective posted on the World Socialist Web Site, we wrote: “These developments make clear that workers need an internationalist perspective and a socialist programme to oppose the attacks on their jobs, working conditions, and wages. They confront not only globally operating automakers and their billionaire shareholders, but also the trade unions and works councils, which collaborate with management to draw up the cuts and help implement them. Without breaking from these corrupt, pro-company apparatuses and establishing independent rank-and-file committees to unite their struggles internationally, workers cannot defend a single job.”

The developments at Mercedes-Benz underscore in the sharpest way the correctness of this perspective. Everything now depends on the independent initiative and organization of the workers.

Low wage rises in Australia “become the new normal”

Nick Beams

Two analyses of Australian wages this week have underscored the ongoing suppression of the living standards of the working class.

A survey by PricewaterhouseCoopers (PwC), reported on by Guardian journalist Greg Jericho, found that businesses are underpaying their employees by around $1.35 billion each year. And in a speech delivered on Tuesday dealing with Reserve Bank of Australia analysis of employment and wages, the bank’s deputy governor, Guy Debelle, concluded that “lower wage rises have become the new normal.”

The PwC survey made clear that underpayment goes far beyond the publicised case of MasterChef and extends across the entire economy, amid a worsening economic outlook.

Contrary to government claims that the fundamentals of the Australian economy are in a “pretty good place,” the PwC report posed the question of where growth would come from in the next year.

“Australia’s economic growth remains persistently lower than at any point in the past two decades. It’s forecast to fall even further. With a perfect storm of falling household incomes, wage stagnation, and stalling productivity, economic stagnation presents business leaders with a stark scenario,” the report said.

PwC found that the biggest areas of underpayment were construction ($320 million), health care and social assistance ($220 million), accommodation and food services ($190 million) and retail ($180 million).

This accounts for around “21 percent of the workforce in the selected industries, or 13 percent of the total Australian workforce,” the report said.

It noted that since 1978 Australian gross domestic product on a per capita basis had risen by an average of 1.7 percent, but over the past three years had averaged just 0.8 percent—less than half. Productivity growth had also fallen sharply and was now approaching the levels last seen in the recession of the early 1990s.

Outlining the RBA’s findings on wages in his speech delivered to the Australian Council of Social Service national conference on Tuesday, Debelle said that “wages growth has declined noticeably since 2012” and was now becoming “increasingly compressed.”

This was because there was a “sharp fall in the share of jobs receiving ‘large’ wage rises” and there was an “increased pervasiveness of wage outcomes between 2 and 3 percent.”

While Debelle did not make this point, wage rises of this order mean a continuing real cut in living standards, because the increase in the costs of necessities such as health care, power and housing is greater than the official inflation level.

The transformation of the wages system was underscored by the rapid fall in the number of the workers receiving larger increases.

“The share of jobs that experience a wage change of more than 4 percent has fallen from over one-third in the late 2000s to less than 10 percent of jobs in 2018,” Debelle said. “There is growing evidence to suggest that wage adjustments of 2 point something percent have now become the norm in Australia, rather than the 3-4 percent wage increases that were the norm prior to 2012.”

Figures provided in the speech show how the trade unions, far from providing a counterweight to the fall in real wages, function as the key mechanism for imposing it.

Debelle noted that one expression of the growing downward trend was the “large increase in the share of enterprise bargaining agreements (EBAs) that provide annual wage rises in the 2–3 percent range. The share of such agreements has risen from 10 percent over the 2000s to almost 60 percent in 2019. Over the same period, the proportion of agreements providing wage increases of 3 percent or more has fallen sharply.”

EBAs, which are organised through the trade unions, also mean wages are lower for longer, as there has been a rise in the proportion of EBAs with a term of three years or more.

“The lower wages growth incorporated in these agreements suggests that wages growth of around 2.5 percent for EBA-covered employees will persist for longer than in the past,” Debelle commented.

Apart from wage rises for a given occupation, workers had been able to improve their position by promotion or by changing jobs. But this road is also being closed off.

“Since 2012, there has been a broad-based decline in the proportion of employees that are getting promoted at work or switching jobs. This means that a smaller fraction of the workforce are receiving wage rises,” Debelle said.

In addition to the broad economic data, the bank’s liaison with firms points to the same trend, with rising to 45 percent of firms reporting wage growth of between 2 and 3 percent in recent years, compared to fewer that one in 10 prior to 2012.

Data from the liaison program indicated that around 80 percent of firms expected “stable” wage growth over the year and only 10 percent expecting “stronger” wage raises, reinforcing the bank’s belief that “lower wage rises have become the new normal.”

This process is also reflected in the analysis of employment data presented in the speech.

Debelle noted that while the numbers of workers in jobs had increased, “the past couple of years have been unusual” because the increase in employment had been disproportionately met by an increase in the number of people participating in the labour force.

The two main groups contributing to this rise were females and older workers. Female employment growth accounted for nearly two thirds of the increase in the past year. Of those returning to work within two years of the birth of a child, an increasing number reported “financial” considerations as their reason for doing so.

The report stated: “Financial reasons could be capturing a number of different considerations including low income growth, the rise in household debt or child care costs.” At the other end of the age demographic, there is an increase in the number of older workers in the labour force with “announced and actual increases in pension ages… likely to have contributed to increased participation.”

Renewed surge in US mergers

Nick Beams

A spate of mergers announced in the US this week has underscored the growth of monopolisation and parasitism, fueled by the moves by the US Federal Reserve and the European Central Bank (ECB) to continue the supply of ultra-cheap money to global financial markets.

On Monday alone, takeover deals amounting to more than $70 billion were announced as multinational firms sought to tighten their grip on the markets in which they operate.

The deals included: the takeover by discount brokerage firm Charles Schwab of its rival TD Ameritrade; the decision by the American jewellery firm Tiffany’s to be bought by the French luxury goods firm LVMH, owner of the Louis Vuitton brand; a move by the Japanese conglomerate Mitsubishi to buy the Dutch utility firm Eneco; and the purchase by the Swiss drugmaker Novartis of a biotech firm The Medicines Company.

Reporting on the renewed burst of takeover activity, following a pause attributed to uncertainties arising from the state of the world economy and fear of a global slowdown, the Financial Times said the recent decisions of the Fed and the ECB to cut interest rates had “propped up stock markets and extended the availability of historically cheap borrowing.”

The largest deal was the Schwab takeover of TD Ameritrade in a share-swap deal valued at $26 billion. The merging of the two largest publicly traded brokerage firms will create what has been widely described as a Mammoth or Goliath in wealth management with more than $5 trillion in client assets.

Wall Street roared its approved of the deal with Schwab shares rising by 8 percent when it was announced TD Ameritrade’s stock shot up by 16 percent.

When the deal is finally completed, if it receives regulatory approval, Schwab’s current shareholders will hold 69 percent of the new firm, TD Ameritrade’s 18 percent, with the Canadian Toronto Dominion Bank, which owns 43 percent of TD Ameritrade, will hold 13 percent.

The main impetus for the merger of the two brokerage house appears to have been the rise of challengers in the brokerage industry which has forced the cutting of trading fees. The aim is to stamp out rivals. A statement by company president Charles Schwab and the firm’s CEO Walter Bettinger said the combination of the two firms “positions us to be competing and winning in the investment services business for the long run—the very long run.”

The purchase by LVMH of Tiffany’s for $16.2 billion in an all-cash deal saw its share price rise instantly increasing the wealth of Bernard Arnault, the owner of the Louis Vuitton brand, by $2.85 billion. The rise briefly made him the world’s second wealthiest man, with a total wealth of more than $107 billion, before falling back to third spot behind Bill Gates, $107.5 billion, and Amazon chief Jeff Bezos, $111.7 billion.

The deal means that Tiffany’s will now join the more than 70 luxury brands owned by LVMH, which include Bulgari, Dom Pérignon, Christian Dior and Givenchy.

The increase in merger activity, while providing fabulous gains in the wealth of corporate chiefs and rich pickings for the banks and legal firms that arrange the deals, does not indicate improved economic health—rather the opposite.

Anu Aiyengar, who heads JP Morgan Chase’s merger and acquisition business in North America, told the Financial Times: “Regulatory uncertainty, equity market volatility, elections and recession are all looming out there and could have a detrimental impact.”

Luigi De Veechi, who heads investment banking for Citigroup in Europe, also pointed to global risks in comments to the newspaper.

“Cash rich companies are once again targeting the US markets as many emerging markets represent a more dangerous equation due to increased geopolitical risk,” he said.

One of the biggest mergers involving US-based firms is that between the mobile phone and telecommunications firms T-Mobile and Sprint in a deal estimated to be worth $26 billion.

Last month the Federal Communications Commission gave its go head for the deal which will cut US wireless telecom providers from four to three—the merged firm plus AT&T and Verizon.

The decision went three to two, the split was on party lines with Republicans hailing the merger as Democrats warned it would lead to monopoly pricing.

The two companies only secured approval after they had promised a series of concessions including not raising prices for three years, improving their broadband services in rural areas and speeding up the spread of the 5G network.

But these commitments were dismissed by the dissenters to the decision saying they are unenforceable. One of the commissioners Geoffrey Stark wrote: “In the short term, this merger will result in the loss of potentially thousands of jobs. In the long term, it will establish a market of three giant wireless carriers with every incentive to divide up the markets, increase prices, and compete for only the most lucrative customers.”

Legal action has been launched by ten state attorneys general against the merger. New York attorney general Letitia James, who is heading the legal action, said the merger would cause “irreparable damage” to millions of subscribers by cutting access to affordable and reliable services and would particularly affect lower income communities in New York and in urban areas across the country.

California attorney general Xavier Becerra, who is also part of the legal challenge, said the merger would “hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices.” The attorneys general said the companies had “yet to provide plans to build new cell sites in areas that would not otherwise be served by either T-Mobile or Sprint.”

The legal case will go to trial next month. Whatever the outcome, the grip of the giant telecommunications firms will surely tighten, underscoring the case for these necessary services to be brought into public ownership under democratic control.

Social counterrevolution and the decline in US life expectancy

Niles Niemuth

A study published this week in the Journal of the American Medical Association (JAMA) details the fall in life expectancy in the United States from 2015 to 2017, a streak unprecedented in modern times.

Virginia Commonwealth University professor Dr. Steven H. Woolf and Eastern Virginia Medical School student Heidi Schoomaker analyzed life expectancy data for the years 1959-2016 and cause-specific mortality rates for 1999-2017. The data shows that the decline in life expectancy is not a statistical anomaly, but the outcome of a decades-long assault on the working class.

The report exposes a country in the grips of a profound social crisis. The record stock prices touted by Trump are, in fact, a measure of the increased economic exploitation that has produced the fall in life expectancy among workers.

Protesters assemble a makeshift memorial to those lost to drug overdoses last year during a demonstration in support of a proposed supervised injection site, outside the federal courthouse in Philadelphia, in September [Credit: AP Photo/Matt Rourke]

The shuttering of thousands of factories and mines, countless store closures and downsizings, along with the slashing of wages, pensions and health care benefits to meet the demands of Wall Street investors have literally killed hundreds of thousands of workers across the United States.

Life expectancy increased annually from 1959 until it stopped rising in 2010, plateauing at zero growth before beginning its descent after 2014, when it peaked at 78.9 years. By 2017, life expectancy had fallen to 78.6 years.

Not coincidentally, 2010 was also the year that Obamacare was signed into law an attack on health care sold as a progressive reform. The decline in life expectancy since then exposes Obamacare’s regressive character, only one of the reactionary legacies of the Obama administration.

Obamacare was part of a deliberate drive by the ruling class to lower the life expectancy of working people. As far as the strategists of American capitalism are concerned, the longer the lifespan of elderly and retired workers, who no longer produce profits for the corporations but require government-subsidized medical care to deal with health issues, the greater the sums that are diverted from the coffers of the rich and the military machine.

A 2013 paper by Anthony H. Cordesman of the Washington think tank Center for Strategic and International Studies (CSIS) frankly presented the increasing longevity of ordinary Americans as an immense crisis for US imperialism. “The US does not face any foreign threat as serious as its failure to come to grips with… the rise in the cost of federal entitlement spending,” Cordesman wrote, saying the debt crisis was driven “almost exclusively by the rise in federal spending on major health care programs, Social Security, and the cost of net interest on the debt.”

Meanwhile, conditions for the rich have never been better. This is reflected in the growing life expectancy gap between the rich and the poor. The richest one percent of men live 14 years longer than the poorest one percent, and the richest one percent of women 10 years longer than the poorest.

Despite expending far more per capita on health care than other major capitalist countries, the United States has fallen far behind when it comes to life expectancy and mortality. The US began to lose pace with other developed countries beginning in the 1980s, and by 1998 had fallen below the average for countries in the Organization for Economic Cooperation and Development.

The first nodal point, in the early 1980s, corresponds to the initiation of the social counterrevolution by the administration of Ronald Reagan, which involved union busting, strikebreaking, wage-cutting and plant closings on a nationwide scale, combined with cuts in education, health care and other social programs. This was launched with the breaking of the PATCO air traffic controllers’ strike in 1981, carried out with the complicity of the AFL-CIO. Reagan’s social policies were rapidly adopted by the Democrats and continued by the Clinton and Obama administrations.

The second major inflection point was the Wall Street crash of 2008, which was followed by trillions in bailouts for the banks on the one hand and brutal austerity against the working class on the other. The ensuing decade has seen the explosion of the opioid crisis, which has ravaged communities across the United States.

According to the JAMA report, the decrease in life expectancy is the outcome of nearly three decades of increasing mortality among midlife working-age adults, those 25-64. This is mainly the result of a dramatic rise in drug overdoses, alcohol abuse, suicide and a series of organ system diseases.

Age-Adjusted Mortality From Unintentional Drug Overdoses, by Race/Ethnicity, US Adults Aged 25-64 Years, 1999-2017. Values in parentheses indicate relative increases in age-adjusted mortality rates by race/ethnicity between 2010 and 2017. Source: CDC WONDER.

Between 1999 and 2017, drug overdose mortality among those in their prime working years increased an astounding 386.5 percent, going from 6.7 deaths to 32.5 deaths per 100,000. The increase in mortality was greatest for the youngest of this cohort, between the ages of 25 and 34, rising 531.4 percent.

The report found that between 2010 and 2017, the overall midlife mortality rate increased from 328.5 to 348.2 per 100,000, resulting in 33,307 deaths that would not have occurred if the rate had held steady.

The rise in mortality has impacted workers across every racial and ethnic group, with the largest number of excess deaths occurring among white workers—a grim refutation of the concept of “white privilege.” By means of such racialist conceptions, the ruling class seeks to promote racial and national divisions even as the reality of social life confirms the fundamental identity of interests of workers of all races and nationalities.

Woolf and Schoomaker found that the largest relative increase in midlife mortality was concentrated in New England and the Ohio Valley, two areas that have been hit particularly hard by deindustrialization and the opioid crisis. Approximately one third of the excess deaths since 2010 occurred in just four states—Ohio, Pennsylvania, Indiana and Kentucky. Eight of the top 10 states for excess deaths are in the Midwest and Appalachia.

“What’s not lost on us is what is going on in those states,” Dr. Woolf told the New York Times. “The history of when this health trend started happens to coincide with when these economic shifts began—the loss of manufacturing jobs and closure of steel mills and auto plants.”

This JAMA analysis exposes the commission of a crime on an immense scale. “When society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death,” Friedrich Engels wrote in 1845 in The Condition of the Working Class in England, “yet permits these conditions to remain, its deed is murder just as surely as the deed of the single individual.”

The responsibility for driving workers to an early grave lies with the capitalist system’s insatiable demand for ever greater profits. The key accomplices in this crime have been the unions, which serve as the corporations’ industrial police force on the shop floor, ensuring the orderly closure of plants and imposing one concessions contract after another.

In this mad drive for profits, workers are being squeezed past the breaking point. The Amazonification of work and the growth of the “gig economy” in the last decade have dramatically increased the exploitation of the working class. Workers are driven to powerful painkillers including oxycontin and opioids simply to cope with the injuries and illnesses that result from overwork.

The reemergence of the class struggle across the US and internationally has shown the way forward. However, while tens of thousands of auto workers, teachers and other workers have taken strike action in the last year, their struggles have been betrayed by the unions.

What is required to meet the needs of the working class is a conscious political leadership with a socialist program on the basis of which workers can take control of the banks and corporations and run them democratically to meet human need, not private profit.

Hunger Games: Food Abundance and Twisted Truths

Colin Todhunter

The world already produces enough food to feed 10 billion people but over two billion are experiencing micronutrient deficiencies (of which 821 million were classed as chronically undernourished in 2018). However, supporters of genetic engineering (GE) crops continually push the narrative that GE technology is required if we are to feed the world and properly support farmers.

First of all, it must be stressed that there is already sufficient evidence to question the efficacy of GE crops; however, despite this, conventional options and innovations that outperform GE crops are in danger of being sidelined in a rush by powerful, publicly unaccountable private interests like the Gates Foundation to facilitate the introduction of GE into global agriculture; crops whose main ‘added value’ is the financial rewards accrued by the corporations behind them.

Secondly, even if we are to accept that at some stage GE can supplement conventional practices, we must acknowledge that from the outset of the GMO project, the sidelining of serious concerns about the technology has occurred and despite industry claims to the contrary, there is no scientific consensus on the health impacts of GE crops.

Both the Cartagena Protocol and Codex share a precautionary approach to GE crops and foods, in that they agree that GE differs from conventional breeding. There is sufficient reason to hold back on commercialising GE crops and to subject each GMO to independent, transparent environmental, social, economic and health impact evaluations.

To evaluate the pro-GMO lobby’s rhetoric that GE is needed to ‘feed the world’, we first need to understand the dynamics of a globalised food system that fuels hunger and malnutrition against a backdrop of food overproduction. As Andrew Smolski describes it: capitalism’s production of ‘hunger in abundance’.

Over the last 50 years, we have seen the consolidation of an emerging global food regime based on agro-export mono-cropping, often with non-food commodities taking up prime agricultural land), and linked to sovereign debt repayment and World Bank/IMF ‘structural adjustment’ directives. The outcomes have included a displacement of a food-producing peasantry, the consolidation of Western agri-food oligopolies and the transformation of many countries from food self-sufficiency into food deficit areas.

As long as these dynamics persist and food injustice remains an inherent feature of the global food regime, the rhetoric of GM being necessary for feeding the world is merely ideology and bluster. Furthermore, if we continue to regard food as a commodity in a globalized capitalist food system, we shall continue to see the comprehensive contamination of food with sugar, bad fats, synthetic additives, GMOs and pesticides and rising rates of diseases and serious health conditions, including surges in obesity, diabetes and cancer incidence, but no let-up in the under-nutrition of those too poor to join in the over-consumption.

Looking at India as an example, although it continues to do poorly in world hunger rankings, the country has achieved self-sufficiency in food grains and has ensured there is enough food available to feed its entire population. It is the world’s largest producer of milk, pulses and millets and the second-largest producer of rice, wheat, sugarcane, groundnuts, vegetables, fruit and cotton.

Farmers therefore produce enough food. It stands to reason that hunger and malnutrition result from other factors (such as inadequate food distribution, inequality and poverty). It is again a case of ‘scarcity’ amid abundance. The country even continues to export food while millions remain hungry.

While the pro-GMO lobby says GE will boost productivity and help secure cultivators a better income, this too is misleading as it again ignores crucial political and economic contexts; with bumper harvests, Indian farmers still find themselves in financial distress.

India’s farmers are not experiencing hardship due to low productivity. They are reeling from the effects of neoliberal policies, years of neglect and a deliberate strategy to displace smallholder agriculture at the behest of the World Bank and predatory global agri-food corporations. It’s for good reason that the calorie and essential nutrient intake of the rural poor has drastically fallen.

And yet, the pro-GMO lobby wastes no time in wrenching these issues from their political contexts to use the notions of ‘helping farmers’ and ‘feeding the world’ as lynchpins of its promotional strategy.

Agroecological principles

Many of the traditional practices of small farmers are now recognised as sophisticated and appropriate for high-productive, sustainable agriculture. These practices involve an integrated low-input systems approach to agriculture that emphasises, among other things, local food security and sovereignty, diverse nutrition production per acre, water table stability, climate resilience and good soil structure. Agroecology represents a shift away from the reductionist yield-output industrial paradigm, which results in enormous pressures on health and the environment.

A recent FAO high-level report called for agroecology and smallholder farmers to be prioritised and invested in to achieve global sustainable food security. Smallholder (non-GMO) farming using low-input methods tends to be more productive in total output than large-scale industrial farms and can be more profitable and resilient to climate change.

Despite the fact that globally industrial agriculture grabs 80 per cent of subsidies and 90 per cent of research funds, smallholder agriculture plays a major role in feeding the world. At the same time, these massive subsidies and funds support a system that is only made profitable because agri-food oligopolies externalize the massive health, social and environmental costs of their operations.

These corporations leverage their financial clout, lobby networks, funded science and political influence to cement a ‘thick legitimacy’ among policy makers for their vision of agriculture. In turn,  World Bank ‘enabling the business of agriculture’ directives, the World Trade Organization ‘agreement on agriculture’ and trade related intellectual property rights help secure their interests.

In the meantime, supporters of GMO agriculture continue to display a willful ignorance of the structure of the food system which produces the very problem it claims it can resolve. The pro-GMO scientific lobby arrogantly pushes its ideological agenda while ignoring the root causes of poverty, hunger and malnutrition and denigrating genuine solutions centred on food sovereignty.

Global Turmoil: Ethics offer a way out of the crisis

James M. Dorsey

Rarely is out-of-the-box thinking needed more than in this era of geopolitical, political and economic turmoil.

The stakes couldn’t be higher in a world in which civilizationalist leaders risk shepherding in an era of even greater political violence, disenfranchisement and marginalisation, and mass migration.

The risks are magnified by the fact that players that traditionally stood up for at least a modicum of basic economic, social, political and minority rights have either joined the civilisationalists or are too tied up in their own knots.

The United States, long a proponent of human rights, even if it was selective in determining when to adhere to its principles and when to conveniently look the other way, has abandoned all pretence under President Donald J. Trump.

Europe is too weak and fighting its own battles, whether finding its place in a world in which the future of the trans-Atlantic alliance is in doubt, Brexit or the rise of civilizationalist leaders within its own ranks.

The long and short of this is that civil society’s reliance on traditional strategies and tactics to exert political pressure serves to fly the rights flag but is unlikely to produce results.

The same is true for traditional often heavy-handed and violent government attempts to quell protests.

In some ways, this weekend’s landslide vote for pro-democracy forces in Hong Kong lays down a gauntlet for the governments of the city and China.

“Even if the current wave of protests recedes, the instability will very likely persist for some time and may even become a permanent situation… because the problems that cause the protests appear unresolvable by means of the current political and economic system,” said Israeli journalist Ofri Ilany.

Mr. Ilany put his finger on the pulse. This decade’s global breakdown in confidence in political systems and leaders not only spotlights the problem but may also create opportunities for out-of-the-box thinking.

The key lies in the fact that protesters across the globe in Santiago de Chile, La Paz, Bogota, Port-au-Prince, Quito, Paris, Barcelona, Moscow, Tbilisi, Algiers, Cairo, Khartoum, Beirut, Amman, Tehran, Jakarta, and Hong Kong as well as movements like the Extinction Rebellion essentially want the same thing: a more transparent, accountable and more economically equitable world.

The Middle East and North Africa, the one part of the world that exasperates the most, also represents the worst and the best of responses to the global clamour for change.

While Egypt under general-turned-president Abdel Fattah Al Sisi is almost a textbook example of what drives global protest, Tunisia and Kuwait, offer lessons to be learnt. So do some of the world’s longer standing success stories such as Singapore.

Tunisia has emerged as the one country that experienced a successful revolt in 2011 and was able to safeguard its achievements because its leaders, much like Singapore’s Lee Kwan Yew, saw power as a tool to secure national rather than personal interests and at a time of crisis worked with civil society to engineer a national dialogue that crafted a way forward.

Similarly, Kuwait, a constitutional semi-democratic anomaly in a region governed by secretive autocrats, recently opted for a more transparent competitive approach towards politics.

As a result, Kuwait saw this month its ruling family take its internal differences and disputes public. The differences forced the government to resign as members of the ruling family accused each other of embezzlement in advance of parliamentary elections scheduled for next year and a possible succession in which the assembly would have a say.

Achieving protesters’ goal of more equitable and accountable political and economic systems involves not only adherence to the rule of law, including the implementation of international law, and application of the principle of equality before the law of not only individuals and organizations but also states.

It further involves the need to make principles of right and wrong and of respect of human dignity the moral and ethical underpinnings of the architecture of a new world order by which all ranging from an individual to a state are judged.

That is the fundamental message of protests across the globe that denounce a world in which financial or economic benefit justifies violations of rights and civilisationalists have abandoned any pretence of adherence to international law.

Heeding the protesters’ message means ensuring that at least international law provides an effective mechanism to hold accountable security forces that use lethal force against largely peaceful protesters as well as politically responsible officials that authorize unjustified brutality in what often amounts to mass killings.

This year’s numbers speak for themselves, including some 100 on a single day in Sudan, more than 350 in a matter of weeks in Iraq, more than 100 in Iran and scores in Chile.

The need for morals and ethics is gaining momentum with hardline realist proponents of the projection of power as well as some leaders raising the alarm bell.

The rise of artificial intelligence persuaded former US secretary of state and national security advisor Henry A. Kissinger, a symbol of realpolitik and the wielding of power, to recognize the importance of morals and ethics.

Writing in The Atlantic, Mr. Kissinger warned that the consequence of artificial intelligence “may be a world relying on machines powered by data and algorithms and ungoverned by ethical or philosophical norms.”

Threats resulting from the abandonment of international law and the lack of moral and ethical yardsticks were evident in this month’s unilateral recognition by the Trump administration of the legality of Israeli settlements in occupied Palestinian territory long viewed by jurists and the international community as illegal.

The move highlighted the link between protecting individual rights and freedoms and national security.

Malaysian prime minister Mahathir Mohamad warned that the administration’s move meant that “we are no longer safe. If a country wants to enter our country and build their settlements, that is legal. We cannot do anything,”

Mr. Mahathir was projecting onto states a sentiment of vulnerability among protesters and minorities across the globe that results from the random, unrestricted employment of power by those in positions of authority.

Similarly, Singapore’s Chief Justice Sundaresh Menon warned last month that “countries increasingly adopt a zero-sum mentality in eschewing multilateral agreements as shackles on sovereignty and a burden on economic growth.”

Mr. Menon’s words must have been music in the ears of Norway’s successful US$1 trillion rainy-day oil fund that has proven that growth and profitability are achievable without abandoning norms of moral and ethical investment.

Norway’s Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund returned three percent or US$28.5 billion to the country’s pension pot during in the second quarter of 2019.

Guided by Norway’s Council of Ethics, which monitors the fund’s investments, GPFG recently blacklisted shares in British security company G4S because of the risk of human rights violations against its workforce in Qatar and the United Arab Emirates.

Said New York Times columnist David Brooks: “The world is unsteady and ready to blow… The big job ahead for leaders…is this: Write a new social contract that gives both the educated urban elites and the heartland working classes a piece of what they want most.”

To achieve the kind of social and economic justice as well as live-and-let live environment that Mr. Brooks advocates, leaders, governments and civil society will have to rediscover and readopt the moral and ethical values that are embedded in the world’s multiple cultures and common to much of mankind.