Wirecard and the criminality of capitalism

Peter Schwarz

The criminal abyss opening around the bankrupt financial services provider Wirecard is getting deeper and deeper. The public prosecutor’s office is now investigating the executives of the Dax-listed corporation, which filed for insolvency on June 25, for commercial fraud, balance sheet forgery, market manipulation, embezzlement of assets and money laundering.

Wirecard is said to have faked transactions worth billions to artificially inflate its balance sheet and sales revenues. In doing so, it is said to have boosted the company’s share price and obtained loans of €3.2 billion, most of which have now been lost. There is also the suspicion that thousands of millions were stolen through sham transactions with partner companies and that Wirecard was involved in international money laundering on a large scale.

Markus Braun, the company’s long-time boss, who was released at the end of June on bail of €5 million, was again remanded in custody on Wednesday. Two other high-ranking former managers of the company were also arrested on Wednesday. Jan Marsalek, who is considered a key figure in the company’s criminal activities, has been on the run for four weeks.

Wirecard headquarters in Munich (Image: Victoria Huber / flickr)

Numerous high-ranking politicians, including Chancellor Angela Merkel (Christian Democratic Union, CDU) and Vice-Chancellor Olaf Scholz (Social Democratic Party, SPD), are also involved in the affair. As recently as September 2019, when reports of irregularities had been circulating at Wirecard for four years, Merkel had been advertising for the group on a trip to China.

As finance minister, Scholz is responsible for Bafin (Federal Financial Supervisory Authority), which had covered up Wirecard’s machinations for years. Although the Financial Times has repeatedly reported on opaque money flows and possible balance sheet forgeries at Wirecard since 2015, Bafin did not investigate the accusations. Instead, it issued a ban on short sales and filed criminal charges in 2019 against the FT journalists, whom it accused of manipulating the share price by negative reporting. Scholz’s state secretary, Jörg Kukies, a former banker at Goldman Sachs, met with Wirecard CEO Braun for confidential talks as late as November 2019.

Several high-ranking German and Austrian politicians, predominantly from the right-wing fringes of the political spectrum, were in close contact with Wirecard or were active as lobbyists for the corporation.

For instance, former Minister of Economics and Defence Karl-Theodor zu Guttenberg’s lobbying firm Spitzberg Partners “advised” Wirecard between 2016 and 2020. In autumn 2019, Guttenberg personally met with Merkel to convince her to promote Wirecard in China. Guttenberg is also a key figure behind the dubious company Augstus Intelligence, which hit the headlines because it paid the young CDU member of parliament Philipp Amthor. Numerous right-wing figures from the security services were in its orbit, including the former head of the secret service, Hans-Georg Maassen.

The government’s former secret service coordinator Klaus-Dieter Fritsche, who played a decisive role in the cover-up of the neo-Nazi National Socialist Underground (NSU) terrorist group and later worked for extreme right-wing Austrian Interior Minister Herbert Kickl (Austrian Freedom Party, FPÖ), also worked as a lobbyist for Wirecard. He arranged several appointments for Wirecard CEO Braun at the German Chancellery.

Braun and Marsalek, who both come from Vienna, also maintained close contacts with the right-wing conservative government there. While Braun was appointed to his “Think Austria” strategy team by Chancellor Sebastian Kurz (Austrian Peoples Party, ÖVP), Marsalek maintained contact with Heinz-Christian Strache, head of the extreme-right-wing FPÖ, and his intimate colleague Johann Gudenus, the two key figures in the “Ibiza scandal” that led to the fall of the ÖVP-FPÖ coalition government in May 2019.

Marsalek, who cultivated a James Bond image, enjoyed a lavish lifestyle and was constantly on the move, is said to have also maintained close relations with various secret services, including Russia’s—at least he boasted about it. Among other things, he is said to have tried to build up his own militia in Libya.

Wirecard was a shady company from the very beginning. Founded in 1999, it handled payment transactions for porn and gambling sites on the internet. Jan Marsalek, born in 1980, came to Wirecard as a 20-year-old school drop-out. He was hired because he was familiar with the early mobile phone technology WAP. Markus Braun, born in 1969, joined Wirecard as a management consultant from KPMG.

When the US banned the payment processing of online gaming in 2006, a key pillar of Wirecard’s earnings fell away. Braun and Marsalek, who by then controlled the company, embarked on a course of international expansion. Braun was responsible for the external presentation and the advertising of investors, while Marsalek built up an international network of companies, which is now proving to be a Potemkin village.

Wirecard also processed payments for larger customers such as Aldi and TUI. But here the profit margins were extremely low or negative. The lion’s share of sales and profits came from business in Asia, which, as it now turns out, was largely invented.

From the beginning, the rise of Wirecard was associated with scandals. “It is striking how many accusations and rumours have accompanied the company for years. Especially when it comes to money laundering,” writes Der Spiegel, which dedicated its recent cover story to the Wirecard scandal.

But that did not prevent the auditing company EY from issuing the corporation with a clean bill of health every year. EY (formerly Ernst & Young), KPMG, PwC and Deloitte, who together dominate the global auditing market, also act as consultants to the companies they audit and are paid by them. The financial oligarchy is therefore among friends.

Politicians and the media were also enthusiastic about Wirecard. At last, Germany had a company that could play at world level in the digital business and take on giants like Google, they enthused. As a result, the share price rose steadily—from €4 in 2009 to €193 in September 2019, increasing almost 50 times within 10 years. It now stands at €1.60. The major investors who pulled out in time made a killing; many small investors lost their savings, however.

Now, the political establishment and the media are trying to portray the Wirecard scandal either as the result of the machinations of a brilliant impostor or the failure of state institutions, which can be corrected by some administrative changes. Finance Minister Scholz has already presented a 16-point plan for the reform of the supervisory authorities.

But this is a sham. Wirecard is not some terrible lapse but shows the true face of capitalism in the 21st century. For a long time now, the accumulation of wealth and assets has completely detached itself from the real economy. The result is unprecedented social polarisation and the criminalisation of all sectors of the capitalist economy.

This began in the 1990s in the Soviet Union and Eastern Europe, where oligarchs used methods that made even hard-boiled Mafiosi shiver and stole the nationalised property that had been built up over generations. The corrupt drunkard Boris Yeltsin, who made this smash-and-grab possible, was hailed as a hero of democracy by the Western media.

The financialization of the US economy, which eventually culminated in the rise of real estate speculator and casino operator Donald Trump, was accompanied by similar criminal affairs as was Wirecard—the bankruptcies of Long-Term Capital Management in 1998, WorldCom and Enron in 2001, and Lehman Brothers, AIG and Bernard Madoff in 2008 were just a few of the sordid landmarks. The crisis of 2008, a result of criminal banking practices, pushed the global economy to the brink of the abyss. All the world’s central banks and governments reacted by throwing trillions to those responsible.

The result is now being reflected in the coronavirus crisis. While millions of workers are forced back to work at the risk of their lives or losing their jobs and livelihoods, the stock markets and accounts of the rich are being inflated with trillions of dollars from the state coffers. Amazon CEO Jeff Bezos made $13 billion in a single day last week. Since the beginning of the year, his assets have grown by $74 billion to $189 billion.

The Wirecard affair shows that Germany is no exception. Angela Merkel may appear more reserved, more controlled, and less provocative than the fascistic choleric Donald Trump. But her government, the grand coalition of the Christian Democrats and Social Democrats, is determined to defend the wealth and global interests of the ruling class just as ruthlessly as Trump does in the US. Therefore, it had no problem supporting the criminal enterprise that was Wirecard. Between 1933 and 1945, German capital had already shown the bestial crimes it was capable of to defend its power and assets. This has not changed.

The combination of “white-collar” crime, ultra-right politics, state protection and secret service activities, which characterizes the case of Wirecard, is a warning signal. No opposition can be expected from the so-called opposition parties—the Greens, the Left Party and the trade unions. If they criticise the government’s behaviour and call for a parliamentary committee of inquiry, it is only to try to reassure the public and suppress any serious opposition.

The fight against the financial oligarchy and its criminal methods requires the independent mobilisation of the working class to overthrow capitalism based on a socialist programme.

Mounting COVID-19 deaths expose deep crisis in Australian aged care homes

Margaret Rees

The rapid spread of COVID-19 infections and deaths in aged care facilities across Melbourne, the capital of the Australian state of Victoria, is spiraling out of control. Of Victoria’s 51 deaths in the “second wave,” 31 have come from nursing homes.

Staff and residents alike are contracting the virus in growing numbers, despite Prime Minister Scott Morrison’s claim that the situation was “looking better” in Victoria.

There are now more than 538 cases linked to at least 40 homes across the metropolitan area, with new outbreaks occurring daily. Of Victoria’s record number of 10 coronavirus deaths on Sunday, seven were linked to nursing homes.

Doctors are warning that the aged care system in Victoria is on the verge of collapse because of protracted federal and state government under-funding and the reliance of operators on low-paid casual workers.

Australian Medical Association national president Tony Bartone told the Australian Broadcasting Corporation today that “underfunding, workforce issues, guidelines, accreditations” and other failures “clearly underpin a lot of what’s happening now.”

Bartone said: “You can’t really fix that in the middle of a pandemic,” adding: “The lack of trained appropriate aged care workers has been chronic in the industry.”

At last Friday’s daily press conference, despite the mounting toll, Victorian Labor premier Daniel Andrews defended the national cabinet’s decision to reject any further lockdown, which would involve the closure of non-essential businesses and schools.

Andrews announced that members of the “transient, flexible, and often insecure” aged care workforce would be banned from working across multiple facilities.

Yet, the business model of the aged care industry is based on a casual, low paid and highly mobile workforce. A high proportion of the staff must work in several locations in order to obtain enough shifts to make a barely living wage.

Successive governments, both Labor and Liberal-National, have run down the workforce conditions at the behest of the aged care operators, with the assistance of the trade unions. Government subsidies in the billions of dollars have only facilitated profit-driven cost-cutting and rampant under-staffing.

One aged care nurse in a Victorian regional centre told the WSWS: “This situation in Melbourne is terrible. I wouldn’t want to be working in that… The issue of casual workers is huge. They’ve casualised the workforce so much that this is bound to happen. Then you don’t get any sick pay either. You can’t say no to work. It is a nightmare. Private nursing homes rely on casual workers.”

A casual aged care worker explained:

?“I’ve been a personal care attendant for about 16 years on and off. For the last couple of years I’ve been a casual employee at a number of nursing homes. I need to be fairly flexible because I’m the principal carer for my mother who has been quite sick.

“Previous to the pandemic I could only get one and two shifts a week as a PCA [personal care assistant] in nursing homes, but now they are ringing me every day. Even though I’m very short of money, I really don’t want to go there to work because I don’t want to catch the virus and bring it home to my mother.”

Aged care workers also have spoken out on social media. One said: “There is so much more to this than it appears. This current multiple employment across multiple employees started with short shifts, reduced hours, part-time, short contracts and reduced access to Annual Recreation Leave, Long Service Leave and sick leave.

“All sanctioned by a government at the demands of industry so they could make a profit from our most vulnerable loved ones. So get off the back of the workers just trying to make enough to get by on. Not one manager has to make the choice of ‘do I pay the rent or eat?’”

Another added: “The casualisation of the labour market sought by employers and agreed to by supine governments. What did you expect?”

Another exclaimed: “Maybe if the government paid care workers the money they deserve and gave them the hours they need to support their families then we wouldn’t need to support multiple jobs! Carers have been underpaid way too long!”

One worker explained how the pandemic is exacerbating the stress on staff: “Lack of staff will be more critical as there’s no family members to help out the carers by feeding their loved ones or even offering comfort. Now more than ever, staff will be run off their feet, and it will be time consuming for staff to keep dressing in protective gear for each resident, which can result in residents waiting longer for their care.”

A teacher whose mother is in an aged care home where a staff member tested positive told the WSWS: “All visitation has stopped. I don’t think we can Skype … because of the staff situation. For us to Skype, a person has to stay with mum for the call. The staff are paid a pittance. It is one of the lowest rates of pay that you can think of. It’s a shocking job.”

A Melbourne aged care facility resident said residents are confined to their rooms. He had tried to leave his room but was told to go back in. One staff member had tested positive for COVID-19 but the residents and their families had been told nothing. There had been no testing of staff or residents. Family visits were stopped in March and resumed for two weeks in June by appointment only.

Last weekend, the Morrison government belatedly announced a centralised Aged Care Response Centre in Victoria. It dispatched a team to replace the entire workforce at St Basil’s Homes for the Aged in suburban Fawkner. The team includes staff supplied by Aspen Medical, the company that earlier oversaw the disastrous and deadly infection outbreaks on the Ruby Princess cruise ship and in Sydney’s Newmarch House aged care facility.

In the past week, the coronavirus outbreak at St Basil’s has jumped from 13 cases to 78, with both staff and residents affected. Four residents have died. A personal care worker from St Basil’s is now in an intensive care unit at the Austin Hospital.

Similar government action was taken last week at Menarock Life Aged Care in nearby Essendon, where there are 60 COVID-19 cases.

Other outbreaks, nearly all in working class suburbs, include 81 cases at Estia Health in Ardeer, 52 at Glendale Aged Care in Werribee, 48 at Estia Health in Heidelberg, 39 at Arcare Aged Care in Craigieburn, 23 at Baptcare Wyndham Lodge in Werribee and 20 at Embracia Aged Care in Avondale Heights.

There are 83 cases at Heritage Care Epping Gardens, 27 at Aurrum Aged Care Plenty and 25 at Regis Aged Care Brighton.

Most of these are privately run—Estia by Quadrant Private Equity, Glencare by Allility, Embracia by McKenzie Aged Care Group.

The attempt to stamp out COVID-19 infections by deploying replacement staff cannot disguise the desperate state of the aged care system throughout Australia. It has been documented by multiple royal commission inquiries, with one still in progress, but nothing has been implemented to overcome the fundamental problems, which are the outcome of the subordination of aged care to the drive for profit.

South Africa has the world’s fifth highest COVID-19 cases

Stephan McCoy

South Africa has recorded over 434,200 cases of the coronavirus, making it the fifth highest country in the world, with only slightly fewer cases than Russia, and placing it above the UK, Iran and Italy.

The number of cases is rising rapidly. According to the Financial Times , “It took three months for South Africa to record its first 100,000 cases on June 22. It then hit 200,000 on July 6. The rate at which detected cases are doubling in the country, about every two weeks, implies that confirmed infections will be one million early August. The country’s peak may be that month or September, according to modelling carried out for the South African government.”

While the country of 58 million people has officially recorded more than 6,655 deaths due to the disease, the South African Medical Research Council (SAMRC) has calculated that the number of excess deaths over the comparable figure in previous years suggests a death toll of more than 17,000.

These figures included deaths from conditions such as HIV and tuberculosis that might normally have been diagnosed and treated but for the redirection of health resources to the pandemic, as well as those caused directly by COVID-19. Some people are thought to be avoiding seeking treatment as fears of the virus spread and public hospitals are overwhelmed.

The real number of deaths due to the pandemic is considerably higher than the officially reported numbers, thanks to the woeful state of the country’s health care system. A BBC investigation in Eastern Cape found that hospitals and clinics were filthy and dilapidated, with medical staff having to do cleaning and laundry. Its health care systems, underfunded and starved of resources for decades, were in complete collapse, amid disturbing reports of unborn babies and mothers dying in overcrowded and understaffed wards. Nurses and doctors reported a lack of personal protective equipment (PPE), no ambulances and a complete lack of ventilation, with patients sleeping on the floor “under newspapers” and others fighting over oxygen because of severe shortages.

Dr Michael Ryan, director of the World Health Organization’s (WHO) Health Emergencies Programme, said, “I am very concerned right now that we are beginning to see an acceleration of disease in Africa.” He added, “While South Africa is experiencing a very, very severe event, I think it is really a marker of what the continent could face if urgent action is not taken to provide further support. South Africa may, unfortunately, be a precursor, it may be a warning for what will happen in the rest of Africa.”

Of the more than 812,000 cases and 17,000 deaths recorded in Africa, home to 1.3 billion people, more than half have been in just five countries—South Africa, Egypt, Algeria, Nigeria and Ghana—in part due to their higher testing capacity. But according to the WHO, the pandemic is spreading rapidly, with cases more than doubling in the last month in 22 African countries, with particularly sharp spikes in Ethiopia, Kenya, Cameroon, and Djibouti, mostly from community transmission.

According to the Surgo Foundation, even its lowest estimates of Africa’s fatalities—based on age and gender distribution and adjusted for poor quality of health services and co-morbidities, such as HIV/Aids—implies that if 60 percent of Africans eventually become infected, more than 4 million will die.

Africa Centres for Disease Control and Prevention (Africa CDC) chief John Nkengasong said, “Our hospitals will be overwhelmed,” and urged governments to carry out more testing, tracing and isolation.

Gauteng province, which includes Johannesburg and Pretoria, is the epicentre of the coronavirus in South Africa, recording 144,334 cases or 36 percent of confirmed infections. But Health Minister Zweli Mkhize has warned that KwaZulu-Natal, South Africa’s coastal province centred around Durban, could “take over” as the next epicentre.

Dr Bandile Masuku, a Gauteng official, shocked the country recently when he said that the province was preparing 1.5 million graves. Asked about the preparations, Africa CDC chief John Nkengasong said, “There’s absolutely no harm to think ahead” and that it was best to plan for the “worst-case scenario.”

In a bid to contain the virus, the African National Congress (ANC) government of President Cyril Ramaphosa announced the reintroduction of some lockdown measures, including a night time curfew, a ban on gatherings and social visits, and the closure of all schools for four weeks from July 28.

In Gauteng, thousands of teachers have chosen not to go back to the classroom for fear of catching the virus, including teachers over the age of 60 with comorbidities. Parents have chosen not to send their children back to school, with attendance ranging from 25 to 58 percent. At least 154 schools have been forced to close after reporting cases of COVID-19. Gauteng’s member of the Executive Council (MEC) for Education Panyaza Lesufi said, “The majority of learners preferred to learn at home.”

Mine workers have been particularly hard hit by the pandemic, with the platinum sector the most affected. Of the 6,623 miners who tested positive, 3,485 were from the platinum mines and 1,620 from the gold mines. At least 52 mineworkers have died of the coronavirus. Buffalo Coal was forced to cease operations after a miner tested positive. The disease is likely to spread even deeper as tens of thousands of miners begin to return into South Africa. At least 45,000 migrant mineworkers from Mozambique are returning to the country as lockdown restrictions are eased.

S&P Global Ratings predicts the South African economy, which before the pandemic was in its second recession in two years, will contract by 6.9 percent due to the pandemic, while the South African central bank predicts a 7.3 percent contraction. The treasury has revised its forecast for the 2020-21 budget deficit from 6.8 percent of GDP to 15.7 percent, with more than 20 percent of the budget going on debt servicing.

Some three million people lost their jobs over the lockdown period, and an already high unemployment rate of 30 percent is set to rise further, with the South African Chamber of Commerce and Industry fearing it could reach 50 percent. Without work and income, between five and six million workers (15 percent of adults) moved back to their villages.

The government’s pledge to provide income support failed to materialise for more than a tiny fraction of the 15 million it was supposed to help. Most of the people contacted in a research report cited in the Economist reported they had run out of money for food in May, while nearly half reported they could not afford enough food in April.

Eskom, the main government-owned power utility company, has seen its debt rise from $27 billion to $29 billion, even as the country is subject to frequent power outages. As a result of neglect, sabotage and flooding that has gone unremedied for years, the corporation has cut power generation on a regular basis. It was forced to shut its Camden plant that generated 1,600 megawatts amid fears that “the dam where it stores ash from burning coal was at risk of bursting.”

The power outages have battered the economy and created widespread suffering and discontent. Workers and their families living in the townships in poorly ventilated and poorly insulated shacks have been left to battle the elements as the winter digs in. At least six provinces will receive “disruptive” snowfall, “very cold conditions” and blizzards in the coming weeks.

The police have responded with force to protests and strikes. To cite two recent examples, community care workers demanding permanent employment in Eastern Cape province were met with stun grenades and rubber bullets after refusing to leave provincial health department’s offices, while 40 workers demanding unpaid wages were arrested and imprisoned in Stellenbosch.

Australian state government bans protest against police violence

Oscar Grenfell

The government and police of New South Wales (NSW), Australia’s most populous state, have taken successful court action to ban a Sydney demonstration against police violence scheduled for tomorrow, in the latest in a series of attacks on the right to protest.

The effective illegalisation of the rally was preceded by a hysterical campaign by the media and political establishment.

Senior police officials and politicians, Labor and Liberal-National alike, condemned the planned gathering as “reckless.” They cynically invoked the dangers posed by the pandemic, while at the same time lifting the few remaining coronavirus restrictions as part of a pro-business back-to-work drive.

Despite the obvious hypocrisy, the NSW Supreme Court yesterday upheld a police application to ban the rally. The court invoked COVID-19 restrictions prohibiting outdoor gatherings of more than 20 people, unless an exemption has been granted.

Supreme Court Justice Mark Ierace warned that the “current assessment of the level of risk... is consistent with New South Wales presently being on the knife edge of a further escalation in community transmission of the virus.”

In reality, the ruling represents a further assault on basic democratic rights. It was made in the context of growing fears within the ruling elite over widespread opposition to the criminally-negligent official response to the pandemic, an escalating assault on jobs and conditions, record levels of social inequality and ongoing instances of police brutality.

No section of the judiciary or the political establishment has demonstrated the slightest concern over the health dangers posed by the reckless “reopening of the economy,” being presided over by the very governments seeking to undermine the right to political protest.

The situation is particularly stark in NSW, where virtually all restrictions introduced after the pandemic began have been lifted.

Football stadiums are permitted to have crowds of 25 percent of their seating capacity, meaning that between 7,500 and 10,000 fans are allowed to attend most Rugby League and Australian Football League matches. Prime Minister Scott Morrison, who has been among the most strident in his condemnations of protests, has been pictured at league matches alongside political colleagues and corporate chiefs.

Cafes and restaurants are in operation, and large venues, such as league clubs, are allowed to have as many as 300 patrons on their premises at any time.

Schools fully reopened earlier this month, in the face of opposition from teachers, parents and students. This was a day after health authorities warned of an “inherent risk” of contracting the coronavirus on public transport.

Hundreds of thousands of workers have been herded back into their workplaces to allow for a resumption of corporate profit-making. Broad sections of the working class, including those in the manufacturing and construction sector, have never left the job. They have been forced to remain at work, often under conditions where social distancing is impossible, after governments and the unions declared that their industries, including residential property development, are essential.

NSW Liberal Premier Gladys Berejiklian, moreover, has been among the most explicit of the country’s leaders in declaring that there will be no return to lockdown measures, regardless of the spread of the disease.

Responding to a rise in infections earlier this month, which has included community transmission, Berejiklian declared that the population would have to understand that they are “in a pandemic,” and “learn to live with it.” “We cannot shut down every time we have a cluster of cases,” she declared, because this would “create chaos for businesses.”

The corporate media is utterly hypocritical in its approach. Publications that have insisted that necessary lockdown measures would have too great an impact on the corporate bottom-line have discovered a great concern for “public health,” but only when it comes to public demonstrations.

They have provided senior political figures with a platform to venomously denounce the rally organisers and the many workers and youth who are being radicalised by the global movement against police violence.

This morning, Prime Minister Morrison stated that anyone who defied the court order would be “breaking the law.” NSW Police Minister David Elliot ludicrously declared that attending an outdoor protest was “the most dangerous act that anybody could do during a pandemic.”

In fact, no cases resulted from protests earlier last month, held in solidarity with the global demonstrations triggered by the police murder of George Floyd in Minneapolis. They were attended by more than 100,000 people across Australia.

The current surge of infections in Victoria shows that the most “dangerous act” for many is to attend their workplaces, restaurants or to be residents in aged-care facilities. Some 80 percent of Victorian infections since May have been linked to workplace clusters.

Elliot menacingly declared: “There will be no shortage of police officers and resources available to make sure this illegal gathering doesn’t occur.” Attendees have been threatened with massive fines and up to six months imprisonment.

Elliot previously described demonstrations against police violence as “not my kind of cause.” He responded to the brutal police assault on an Aboriginal boy in Sydney last month by stating that he was “just as disturbed” by the child’s swearing as he was by a police officer violently throwing the 16-year-old boy to the floor.

Elliot’s comments are a warning that the police are preparing a massive show of force aimed at intimidating social opposition. Last month, more than 500 officers, most of them from the riot squad, surrounded Sydney Town Hall to prevent another “unauthorised protest.” They threatened demonstrators with a Long Range Acoustic Device weapon and made it impossible for a gathering to occur.

Riot police blocking a Sydney protest against police violence last month

The Supreme Court decision followed a similar ban on the first of a series of rallies early last month. That verdict was overturned on appeal.

Given the extent of the “reopening,” the political character of the latest decision was even more blatant. As Felicity Graham, a lawyer for the organisers, pointedly noted: “Going to the aquarium, going to sex-on-premises venues, going to football matches, these aren’t essential to our democracy. Protest is.”

Serious questions were raised, moreover, about the propriety of police conduct. NSW Police Commissioner Mick Fuller took to Sydney radio last week to declare that he would seek to ban the protest, before meeting with the organisers or reviewing their application. Speaking to Ben Fordham, a right-wing shock-jock, Fuller denounced protesters as “selfish” and echoed outlandish government claims that a demonstration could set the state back “five or ten years economically.”

As Graham argued, Fuller’s comments made the already anti-democratic process of seeking permission to hold a rally a “sham,” whose outcome was predetermined before it began.

The ban and the police attacks on the protests are a warning to the working class. A precedent is being established for organised social and political opposition to be outlawed, on the basis of the politically-motivated and selective application of emergency powers activated during the pandemic.

At the same time that protests are being blocked, 3,000 Australian military personnel are being mobilised to metropolitan areas, supposedly to assist the response to the coronavirus. The soldiers, who have been trained for war and to suppress unrest, not respond to an unprecedented public health emergency, are being brought into the streets as part of a broader effort to normalise the domestic use of the military ahead of social upheavals.

Mounting US pressure on Europe to line up against China

Peter Symonds

In a keynote speech last week, US Secretary of State Mike Pompeo significantly raised the stakes in the Trump administration’s reckless and dangerous confrontation with China. After citing the growing list of unsubstantiated condemnations and lies against China, he declared that the US was not reverting to the Cold War policy of containment, signalling a far more aggressive strategy aimed at eliminating the threat posed by China to American global dominance.

The speech entitled “Communist China and the Free World” was clearly aimed at ramping up the pressure on US allies and strategic partners to align themselves completely with Washington’s anti-China campaign. Pompeo called on “every leader of every nation to start by doing what America has done” and condemned those that “simply don’t have the ability, the courage to stand with us.”

The message was directed in particular at Europe, indicating that Washington will not tolerate any deviation from its policy. In a barely-concealed criticism of Germany, Pompeo declared: “Indeed, we have a NATO ally of ours that hasn’t stood up in the way that it needs to with respect to Hong Kong because they fear Beijing will restrict access to China’s market. This is the kind of timidity that will lead to historic failure, and we can’t repeat it.”

Pompeo employed the rhetoric of the Cold War—the “free world” versus “Communist China.” That was always a shabby pretext for US aggression but today bears no relation to reality. Pompeo’s claims to defend democracy as the Trump administration shreds basic democratic rights and legal norms, sending federal agents to violently suppress protests against police killings. Moreover, after more than four decades of capitalist restoration, to describe China as “communist” is absurd.

The deepening crisis of world capitalism fueled by the COVID-19 pandemic is exacerbating geo-political tensions and compounding the desperation of US foreign policy. The Trump administration is demanding that Europe and countries around the world line up behind the US drive to subordinate China to its imperialist interests. It does so, however, even as it is taking trade war measures against its European “allies” to ensure that they also pose no threat to American global hegemony.

Pompeo’s latest speech is part of a US campaign to bully European countries into toeing Washington’s line, and, if that fails, to divide and fracture the European Union. It follows his intervention at the annual Munich Security Conference in February that revealed deep divisions between the US and Europe, and two addresses last month to the Copenhagen Democracy Summit on June 19, entitled “Europe and the China Challenge,” and to the German Marshall Fund’s Brussels Forum on June 25.

Both the latter speeches were aimed at marshaling support in Europe against China and pressing European powers to take a more aggressive stance. Both were chaired by staunchly pro-Washington figures—the first by former Danish prime minister and NATO Secretary General Anders Fogh Rasmussen, and the second by the German correspondent for the Wall Street Journal, Bojan Pancevski.

Pompeo noted “successes” in stiffening European measures against China. These included a new Inter-Parliamentary Alliance on China that features some European leaders, Britain’s denunciations of Beijing over the new national security legislation in Hong Kong, and the sidelining of Chinese telecommunications company Huawei by European countries such as the Czech Republic.

Those in European ruling circles who employ the rhetoric of “defending democracy” and unbraiding China over “human rights” in Hong Kong, Tibet and Xinjiang are just as hypocritical as their American counterparts, given the turn in Europe to police-state measures and the fostering of extreme right and openly fascist parties.

At the same time, the US is intent on driving a wedge against any country that resists. The two speeches last month followed the Trump administration’s decision to withdraw 10,000 US troops from Germany over Berlin’s failure to boost its military budget sufficiently and its reliance on Russian oil and gas. Pompeo said the decision was not just a rebuke to Germany, but part of a massive restructuring of the US military toward Asia “to make sure we’re postured appropriately to counter the PLA [China’s military].”

The divisions in Europe, as in countries around the world, flow from a longstanding strategic dependence on the US, on the one hand, and a growing reliance on trade and economic ties with China, on the other. Germany depends heavily on trade with, and investment in, China. On the other hand, like the US, the European powers are concerned that China’s rapid economic growth, which is, above all, the result of its transformation into a huge cheap labour platform for global corporations, is undermining their own economic competitiveness and neo-colonial stakes in Asia, Africa and Latin America.

In an article this month entitled, “Europe changes its mind on China,” Thomas Wright, an analyst with the US think tank, the Brookings Institution, made clear that economic competition, not any concern for democracy, was behind European support for the US anti-China campaign.

After noting that a “primary driver of Europe’s increased skepticism of China was economic,” Wright pinpointed Beijing’s “Made in China 2025” plan as a particular factor. The plan’s aim to transform China into a leading manufacturer of hi-tech goods related to 5G telecommunications, advanced robotics and artificial intelligence represents a direct threat to American and European dominance in these highly profitable areas. At the same time, European corporate ambitions for greater profits in China have been thwarted by the Chinese government’s failure to open up new areas of its economy to foreign investment.

While economics are certainly a factor, it is not the case, as Wright maintained, that relentless pressure from Washington plays little role in compelling European countries to shift their policies. For instance, the recent decision by the British government to eliminate Huawei from the country’s 5G telecommunications network was in no small measure the result of the Trump administration’s ban on the use of American software in Huawei equipment.

Pompeo’s speech last week represents a major escalation of Washington’s anti-China campaign across the board. He declared that the US “can’t face this challenge alone” and ominously called on the “combined economic, diplomatic, and military power” of the UN, NATO, the G7 countries and the G20 to confront China. Confronting a profound crisis at home, the Trump administration is desperate to divert social tensions outward against an external foe and will stop at nothing to ensure the backing of European powers.

With over 16 million COVID-19 cases, the pandemic is devastating developing nations

Benjamin Mateus

Notwithstanding the transient declines in numbers reported over weekends, the global SARS-CoV-2 pandemic is demonstrating its tenacity in wreaking havoc on the inhabitants of this planet. On Saturday, the number of cases sped past 16 million, bringing the global per capita rate to 2,089 cases per a million population, or 0.21 percent. Even if the number of undiagnosed cases was five to 10 times higher, in absolute terms, the pandemic remains very much in its initial stages of development.

The prospect of natural herd immunity in the foreseeable future is remote, and, by all accounts, the introduction of a viable vaccine will be a geopolitical fiasco that will make the US testing debacle seem like child’s play. Many industries, assisted through lucrative deals from their governments, have quickly adapted to enrich themselves on the scourge.

The seven-day average of new cases has risen to 253,089 per day. More than 650,000 deaths have been tallied, with a seven-day average of 5,655 fatalities per day. One concerning statistic that has seen a sudden jump is in the category of people with serious or critical infections. After reaching a peak of 59,817 cases on April 29, it declined to 44,583, after which it began climbing again. It has now reached 66,170 cases. The mortality rate for these patients varies from 30 to 50 percent, suggesting that the number of daily deaths will continue to trend higher for some time.

Funeral at Olifantsvlei Cemetery in South Africa (Credit Michele Spatari)

Three countries—the US, Brazil, and India—have more than 1 million cases. Twenty other countries have reported more than 100,000 cases. Countries where the pandemic is sustained at a high rate or surging include South Africa, India, Mexico, Colombia, Brazil, and the United States. Despite a steady number of cases, the fatality rate in Iran, at more than 200 deaths per day, has climbed higher than in March, during the initial surge. Developing countries that fly under the radar of mainstream COVID-19 reports, where outbreaks are bringing the healthcare infrastructure to near collapse, include Indonesia, the Philippines, Kazakhstan, and Kyrgyzstan.

South Africa, entering its winter season, has now become the epicenter of the African continent for the COVID-19 pandemic, ranking fifth in the world in the number of cases reported. As of this writing, there have been 445,433 infections, with half of these cases confirmed since July 7. There have been 6,769 deaths, with a rising seven-day average of 244 fatalities per day. On Saturday, there were 312 deaths.

Schools that opened in June are closing again for at least four weeks to help stem the rising tide of infections. Several thousand students and teachers tested were found to be infected with the coronavirus. Epidemiological modeling indicates that the peak of the present surge will extend into September. Like many countries that moved to reopen large swaths of their economies in June, South Africa is now facing the repercussions of choosing the health of its population or its economy.

Shite cleric praying over a COVID-19 victim in Iraq. (credit AP)

According to the Wall Street Journal, 25 percent of all tests in South Africa are returning positive. The South African Medical Research Council said that from the period of May 6 to July 14, they calculated there were 17,090 extra deaths compared to previous years. With hospital beds running short in Gauteng province, Johannesburg and the capital, Pretoria, field hospitals are being built to support the influx of new cases.

A nurse at Chris Hani Baragwanath Hospital painted a picture for the media far too reminiscent of events in Italy, Spain, and New York City: “Our hospital is overloaded already. There has been an influx of patients over the last two weeks. More and more colleagues are testing positive, even people who are not working in COVID wards.” More than 8,000 health care workers across Africa have been infected, and in South Africa, it has been estimated that between 4,000 to 5,000 have tested positive. Hospital beds are expected to be full by the end of the month, according to the health minister. A shortage of medical oxygen poses a dire concern.

South Africa’s economy had been in recession, with unemployment running at 30 percent before the pandemic. The strict lockdown imposed on the country saw the gross domestic product plummet 33 percent. The central bank expects the economy to contract by 7.3 percent for the year. More than 25 percent of workers have lost their wages, and half of all households have run out of money to buy food.

Iraq’s decades of sanctions, wars, and corruption have decimated its health system. Now it is facing a surge in COVID-19 with total cases running over 110,000 and 2,459 new cases just yesterday. Half of all cases and deaths have been from July. With less than 1 million tests conducted in a country of 39 million people, the real toll on the nation is far higher than those numbers would indicate.

Kashmiri man selling bread (credit Mukhtar Khan)

Given the mistrust among people, health care workers are facing abuse and violence. Abdulameer Mohsin Hussein, the head of the Iraqi Medical Association, speaking to Al-Monitor, said, “many doctors are subjected to triable threats that compel them to waive their personal rights and complaints in the courts.” Little is being done by the government to ensure the safety and security of medical workers. “Although the Health Ministry is following WHO guidelines and protocols, that was only ink on paper, and it is a media show. There are few hospitals to contain the growing number of patients, and there is a scarcity of diagnostic tools and therapeutic devices.”

Corruption runs rampant as supplies, especially oxygen, runs low. Many doctors are fleeing the country, making a desperate situation appear untenable. A gravedigger told CNN that they are receiving 70 to 80 bodies a day. They conduct their work in the night when the blistering temperatures of the day fall enough to allow them to tend to their strenuous duties.

The annual Muslim pilgrimage to Mecca, the Hajj, being held from July 28 to August 2, usually sees several million people from around the world flock to the holy city. However, Saudi authorities, who are grappling with the second-largest outbreak in the Middle East after Iran, have curtailed the event to less than 10,000 people who are already within the borders of the country. The Hajj produces billions of dollars in revenue.

India, with 1.44 million cases of coronavirus, is the epicenter of the pandemic in the South Asian subcontinent. The daily cases of COVID-19 are accelerating, and the death toll is climbing. Yet, India’s Prime Minister Narendra Modi, delivering his monthly radio address to the country, had the audacity to state, “The way Indians came together to fight against the coronavirus in the last few months, we have proved the world wrong.”

In Delhi, the country’s hardest-hit city, the Indian CDC estimates that one in four residents have been infected. The per capita rate of testing remains insufficient. A virologist, Dr. Shahid Jameel, explained to the BBC that the government continues to deny the country was in the community phase of transmission, meaning it was broadly entrenched geographically. He urged that it is critical that these officials listen to doctors and experts and acknowledge the evidence being provided.

Field hospital in Kyrgyzstan (credit Vladimir Pirogov)

After a brutal lockdown that lasted more than two months, restrictions were eased on May 30 when India had less than 200,000 cases. Over 80 percent of all employed persons in India work in the informal sector, which includes street vendors, small-scale service, and agriculture. This is poorly regulated by the government and requires workers to congregate in makeshift stalls, crowded markets, and with numerous people. As such, these workers are often overlooked by the state and now bear the brunt of the pandemic and its economic woes.

Similarly, in South America, countries like Colombia (with over 8,000 new cases yesterday), Peru, Argentina, Bolivia, Ecuador, and Guatemala are facing a similar health crisis and economic distress among the working class and poor. Latin America has, for the first time, surpassed the combined number of cases from the United States and Canada, representing close to 27 percent of global cases.

Many of these countries now devastated by the rising tide of COVID-19 infections are also facing the debt juggernaut owed to banks and fund managers in Europe and the US. With debt servicing depleting revenue and health care costs soaring, the monies needed to fund necessary programs like utilities, infrastructure development, and education are being lost. This further exacerbates the indirect health and social crises that arise from the impact of the pandemic.

According to the World Bank, “The blow is hitting hardest in countries where the pandemic has been the most severe and where there is a heavy reliance on global trade, tourism, commodity exports, and external financing. While the magnitude of disruption will vary from region to region, all EMDEs [Emerging Markets and Developing Economies] have vulnerabilities that are magnified by external shocks. Moreover, interruptions in schooling and primary healthcare access are likely to have lasting impacts on human capital development.” Antonio Guterres, the United Nations Secretary-General, warned, “a series of countries in insolvency might trigger a global depression.”

WHO warns that COVID-19 pandemic is resurgent across Europe

Alex Lantier

The World Health Organization (WHO) warned Friday that the lifting of lockdown measures is driving a resurgence of COVID-19 in Europe. The rise in new cases is the product of stark class inequalities and the exploitation of migrant labor across the continent.

“The recent resurgence in COVID-19 cases in some countries following the easing of physical distancing measures is certainly cause for concern,” a WHO-Europe spokeswoman told AFP.

She said governments should prepare for large-scale lockdowns to prevent major new outbreaks: “Where new clusters of cases appear, these need to be controlled through rapid and targeted interventions including rapid case detection and isolation and diligent contact tracing and quarantining. … If the situation demands, reintroduction of stricter, targeted measures with the full engagement of communities may be needed.”

Over the weekend, the number of dead in Europe from COVID-19 passed 200,000, as the number of officially registered European cases approaches 3 million. While it is surging across Eastern Europe—with over 5,000 daily new cases in Russia, and over 1,000 each in Ukraine and Romania—the number of daily COVID-19 deaths, however, at several hundreds, is well below the thousands who died daily this spring. Lockdowns across Western Europe blunted much of the pandemic’s impact. Since May 20, Europe has seen roughly 20,000 new cases per day, less than half the April peak.

The policy of the European Union (EU), entirely focused on using the pandemic as a pretext to hand multi-trillion-euro bailouts to the banks and major corporations, is, however, leading to disaster. As the pandemic spreads in Eastern Europe, the premature ending of lockdowns in the original centers of the pandemic in Western Europe is leading to a rapid resurgence of cases.

On Saturday, Romania saw a record 1,284 cases and Ukraine a near-record 1,106, as the far-right Ukrainian regime imposes IMF austerity measures and slashes social spending, forcing millions of Ukrainians to find work in central or western Europe. Many work as migrant farm labourers and are badly exposed due to appalling working conditions there—even in Europe’s wealthiest countries.

In Germany, 174 of 480 migrant agricultural labourers at a farm in the Bavarian village of Memming have tested positive for COVID-19. Security forces put the facility on lockdown and warned that the area around the farm may also go into lockdown. The workers infected in Memming are mostly Romanian migrant workers who were picking and treating cucumbers in large, closed facilities that likely helped spread the virus among the workers.

In Spain, protests broke out among migrant farm workers in the Castilla La Mancha region after 400 workers were forced into confinement in one outbreak near Albacete. Workers, many from West Africa, were housed collectively, without privacy or facilities to sleep and wash. The farm refused to provide accommodation, and hotels in the area refused to provide the workers rooms.

The College of Social Work of Castilla La Mancha issued a statement on this tragedy, stating: “The local administration never decided to carry out large-scale action to give the people residing there dignified conditions. It always looked the other way, even though it was necessary to do preventive work on many fronts, including public health. Given the circumstances of the COVID-19 pandemic, did anyone really think this could not happen?”

A report by Euronews, Der Spiegel, Lighthouse Reports, and Médiapart, titled “Invisible workers: Underpaid, exploited and put at risk on Europe’s farms,” reveals the appalling working conditions facing many of the 9.7 million people working in agriculture in Europe.

Juan, a Colombian youth hired by a subcontractor to work at a French farm, recalled how other workers first greeted him: “‘Welcome to hell,’ I remember being told. And I thought it was a joke. But when they opened the door and I saw the house ... it was a disaster.” Workers paid €200 monthly for rent in the house, where they were packed five to a room, sharing bunk beds, in violation of labour law. No bed sheets or pillows were provided for the beds, or toilet paper in the restrooms.

Such reports expose the boundless class arrogance of the financial aristocracy and its petty bourgeois accomplices in the union bureaucracy who set social policy in Europe. As the European Central Bank prints €1.25 trillion to give to the banks to bail out the super-rich, and state officials squabble over how to divide up €750 billion in EU corporate bailouts, they treat workers with contempt.

EU officials have admitted that farm labourers, hypocritically hailed as “essential workers” by the capitalist media, are treated little better than slaves—with deadly consequences. “At the moment, we have this crazy situation where we actually have better protection for animals than for some of these workers on our farms,” Daniel Freund, a German Green member of the European parliament observed.

This exposes deep flaws of Europe’s lockdowns. Lockdown measures were implemented only after a wave of wildcat strikes in March in Italy and growing strikes across Europe. However, this by itself could not totally stop the pandemic. During the lockdowns, conditions in farms and other workplaces guaranteed that the disease would keep spreading among super-exploited “essential workers” employed to prevent a collapse in food supplies.

The impact of the premature ending of lockdowns is now being felt. Though the number of new daily cases fell to a few dozen in many Western European countries after this spring’s lockdowns, they are now rising rapidly in Germany (781 on Saturday), France (1,130), and Spain (2,255). “The second wave has arrived,” wrote Germany’s Tagesspiegel, adding: “Since mid-May the number of new cases had regularly fallen. But now cases are clearly rising, even where there are no hot-spots.”

After Catalonia proposed a “voluntary” lockdown on 4 million people in Barcelona, Jean-François Delfraissy, the head of France’s Scientific Council, said France could soon see similar levels.

Warning that France could “fall into something like Spain, Catalonia,” he pointed to working class areas housing many immigrants doing essential work. He stressed his concern for “precarious populations and those that can fall into precarious social conditions. The north Paris suburbs are worse hit than any other area, and French people of foreign origin have far higher mortality rates.” He said, “if we allow Covid infections in these populations to grow, it will spread throughout the population.”

Nevertheless, the EU firmly opposes further lockdowns and demands stark austerity measures and massive cuts to jobs, to finance the trillions of euros being forked over to the super-rich.

On Saturday, French Prime Minister Jean Castex ruled out large-scale lockdowns. “We now know what that produces: it stops the spread of the pandemic, of course, but from an economic and social standpoint it’s a disaster,” he said, adding that only “very localized lockdowns” could be considered. French President Emmanuel Macron has already said that millions of workers will lose their jobs in France alone, and that there will be many bankruptcies to finance EU bailouts for the rich.

To speak more plainly, Castex and the European capitalist class behind him oppose stopping the spread of COVID-19 because this “disaster” stops the flow of profits to their pockets. By preferring death and profits to life and health, they have exposed their own bankruptcy and shown that only a movement of the working class for equality, for worker control of production and for the taking of political power by the working class on a socialist platform can halt the pandemic.

$600-per-week jobless benefit expires for 20 million US workers

Patrick Martin

Sunday, July 26 marked the beginning of the first week in which 20 million American workers are deprived of a $600-per-week federal supplemental unemployment benefit that has served as a lifeline under conditions of Depression-era levels of joblessness triggered by the coronavirus pandemic.

The benefit was terminated as a result of the failure of the White House and Democratic and Republican leaders in Congress to extend it beyond the deadline set in the CARES Act corporate bailout passed at the end of March. The cutoff was dictated by the corporate-financial elite that controls both political parties.

There is no cutoff of the trillions of dollars in handouts to giant corporations and banks enacted in a near-unanimous bipartisan vote, despite the fact that many of the same companies have announced massive permanent layoffs.

Hundreds of people wait in line for bags of groceries at a food pantry at St. Mary's Church in Waltham, Mass., Thursday, May 7, 2020. (AP Photo/Charles Krupa)

Over the past four months, while the financial aristocracy has actually increased its wealth, the severe limitations in the benefits provided to working people under the CARES Act have become apparent. Some 53 million people filed new claims for unemployment insurance during that period, and at least 32 million are still out of work, but only 20 million are currently receiving the $600-per-week federal supplement.

Millions of workers lost their benefits when they were forced to return to work at unsafe workplaces. Many more lost their benefits because they refused to go back to work, fearing their health and lives were in danger. Many others never received the federal supplement in the first place because their state unemployment compensation systems were so decrepit they could not program the additional payments.

The federal supplement expires on July 31, but since state systems pay benefits on a full-week basis only, with the benefit week ending on a Saturday or Sunday, benefits stopped for nearly all eligible workers on July 26 or July 27, for the week that ends August 1 or August 2.

The consequences of this cutoff will be felt in mass impoverishment, hunger, foreclosures, evictions and a dramatic increase in homelessness. This in turn will provide additional fuel for the coronavirus pandemic, which has a hugely disproportionate impact on the most vulnerable sections of working people.

The cutoff comes as the number of jobless continues to climb, with 1.4 million workers filing new claims for unemployment compensation for the week ending July 17, a figure that is widely expected to rise even further in subsequent reporting periods.

In the month of July alone, dozens of mass layoffs and furloughs have been announced by major corporations, most recently by the oilfield services company Schlumberger, which said on July 24 it was cutting about 21,000 jobs and reported a second-quarter loss of $3.4 billion.

Other mass job cuts and closures were announced in July:

* Tailored Brands, the parent company of Men’s Wearhouse and Jos. A. Bank, will cut 20 percent of its workforce and close 500 stores.

* LinkedIn is cutting 960 jobs.

* Southwest Airlines is offering incentive packages, already accepted by 28 percent of its workers, to quit or take extended leave.

* American Airlines will lay off 25,000 workers, 20 percent of its total.

* JC Penney, which filed for bankruptcy in May, announced this month it will close 152 stores and lay off 1,000 workers.

* PVH Corp, parent company of the Calvin Klein and Tommy Hilfiger brands, will close 162 stores and cut 450 jobs.

* Walgreen’s announced a quarterly loss of $1.7 billion and said it will cut 4,000 workers.

* Wells Fargo bank is reportedly planning to cut unspecified “thousands” of jobs.

* United Airlines announced it will issue layoff and furlough notices to 36,000 workers, more than one-third of its workforce, to take effect October 1.

* Levi’s, the jeans manufacturer, said it will cut 750 jobs, about 15 percent of its workforce.

In the face of this social catastrophe, the policy of the multi-millionaire corporate politicians in Washington, including President Trump, Republican Senate Majority Leader Mitch McConnell and Democratic House Speaker Nancy Pelosi, is to protect the capitalist system and block any revolt from below by the working class.

The two capitalist parties proceed in a complementary fashion. The Republicans emphasize the build-up of repressive forces and use the whip of unemployment and poverty to drive workers back to their jobs. The Democrats join in the back-to-work campaign while seeking to delude workers with promises of reform they know will never take place, in order to dissipate and diffuse popular resistance.

After McConnell failed last week to reach a consensus within the Senate Republican caucus on the outlines of an extension of the federal unemployment benefit—mainly because of hard-line free market advocates like Ted Cruz and Rand Paul, who want no extension at all—the White House sent out its spokesmen on the Sunday morning television talk shows to promise a Republican Party plan by Monday.

Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows are the lead negotiators on this issue for the Trump administration. Speaking on Fox News Sunday, Mnuchin was asked about a projection by the Atlanta branch of the Federal Reserve Board that the US economy contracted by 33 percent in the second quarter. He demurred, suggesting the slump would be “only” 17 percent, which would still be the largest ever for a single three-month period.

Meadows, on ABC’s “This Week,” voiced the complaint of employers and most Republicans that “the original unemployment benefits actually paid people to stay home and actually a lot of people got more money staying at home than they would going back to work.”

This statement is really an indictment of American capitalism, since it acknowledges that for many millions of workers, the combination of federal and state benefits, averaging about $980 a week, is more than the pittance they were being paid before the coronavirus pandemic hit.

Meadows claimed there would be agreement among Senate Republicans Monday on a plan to extend the federal supplement, but limiting it to no more than 70 percent of previous wages. He did not address the fact that many state governments have complained that it would take many weeks, even months, to reprogram their systems to make such individualized payments, rather than an across-the-board supplement.

Both Mnuchin and Meadows said any extension of supplementary unemployment benefits would be linked to a liability waiver for employers, giving corporations and businesses blanket immunity against lawsuits if their neglect of safety precautions led to outbreaks of COVID-19 among their workers.

Another White House aide, economic adviser Larry Kudlow, speaking on CNN’s “State of the Union” program, described the 70 percent cap as “quite generous by any standard,” adding that the Republicans would also propose a “reemployment bonus,” i.e., an incentive payment for workers to risk their lives by going back into unsafe workplaces.

The top Democrat in Washington, Speaker Nancy Pelosi, appearing on the CBS program “Face the Nation,” defended—in words—the $600-per-week federal supplement, although she declared, “The reason we had $600 was its simplicity.” In other words, an across-the-board payment was easier to administer than a percentage payment.

Asked directly if she would accept a much lower figure for the across-the-board figure, with some Republicans suggesting $200-per-week, Pelosi did not reject the suggestion, merely saying that she would not negotiate on television. Behind closed doors with White House aides and Senate Republicans, she will be more than willing to deal.

Another Democratic Party official, Representative Karen Bass of California, the chair of the Congressional Black Caucus, who is on former Vice President Joe Biden’s short list for his running mate, agreed that the $600-per-week payment might be too high. “It might be a problem in some places,” she told CNN.

Senator Ted Cruz repeated the crudest version of this argument on CBS, declaring that “for 68 percent of people receiving it right now, they are being paid more on unemployment than they made in their job. And I'll tell you, I've spoken to small business owners all over the state of Texas who are trying to reopen and they're calling their waiters and waitresses, they're calling their busboys, and they won't come back. And, of course, they won't come back because the federal government is paying them, in some instances, twice as much money to stay home.”

Economist Heidi Shierholz of the Economic Policy Institute noted, “There are 14 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Cutting off the $600 cannot incentivize people to get jobs that aren't there.”