The COVID Pandemic and the Housing Crisis

Yixia Cai & Shawn Fremstad

Over 20 million people lost jobs and wages during the initial months of the pandemic. In July 2020, the economy was still down nearly 13 million jobs from its February level. The CARES Act, which was signed into law on March 27, 2020, included a number of provisions designed to replace lost income and keep people in their homes. These federal measures, along with ones adopted in some states and cities, have undoubtedly helped millions of people stay in their homes during the pandemic. Yet, housing insecurity — as measured by missing or deferring rent or mortgage payments, or having little confidence in one’s ability to make rent or mortgage payments — was very high during the initial months of the pandemic.

A forthcoming CEPR report will document trends and disparities in housing insecurity before and during the pandemic. This preview reviews the main findings of the forthcoming report. The findings include:

+ Nearly one-in-three renters experienced housing insecurity, on average, each week from late April 2020 through July 2020. Among homeowners, about one-in-six were housing insecure during this period.

+ Hispanic and Black renters have seen particularly large increases in housing insecurity, with roughly 45 percent of renters in both groups reporting housing insecurity during the pandemic, an increase of about 13 percentage points for Hispanic renters and 8 percentage points for Black renters since 2019.

+ Among households with children, racial and ethnic gaps in housing insecurity — between white and Black households and white and Hispanic households — narrowed between 2017 and 2019. But this progress has been lost. Roughly 44 to 45 percent of Hispanic and Black households with children were housing insecure each week between April and July 2020, and the racial and ethnic gaps in housing insecurity were wider than at any point in 2017 to 2019.

This preview also uses logistic models to examine the relative contribution of certain demographic characteristics and labor market factors in predicting housing hardship. Findings that use these models include:

+ Renters who lost jobs or earnings were 2.7 times more likely to be housing insecure than their job-stable counterparts. Similarly, mortgage holders who lost jobs or earnings were three times as likely to experience housing insecurity as job-stable mortgage holders.

+ Low-income households, people of color, and households with children generally all had higher odds of housing insecurity compared to their reference groups (respectively, households with income of $50,000–$99,999, white people, and households without children).

+ Black women had the highest probability of housing insecurity, while white men had the lowest. Black men were just behind Black women in terms of risk. Next were Asian women, and then, all with roughly similar risks, were Hispanic women, Hispanic men, and Asian men.

Several of the CARES Act measures that were designed to replace lost income and keep people in their homes expired in late July, including a $600 per week increase in Unemployment Insurance and a  federal moratorium on evictions in federally assisted housing. The HEROES Act, passed by the House of Representatives in May, would extend and expand the eviction moratorium, renew the UI benefit increase, and provide $200 billion in new funding for housing and homelessness programs. The Senate, however, has yet to pass similar legislation, and negotiations between Democrats and Republicans remain at an impasse. Absent a massive increase in direct financial assistance to struggling renters and homeowners, these findings suggest that millions of strapped renters and homeowners will go deeper into debt, face more hardship and insecurity, and ultimately lose or be evicted from their homes.

Housing Cost Burdens Before the Pandemic

According to the US Department of Housing and Urban Development (HUD), renters and homeowners are housing cost burdened if they spend more than 30 percent of household income on housing and utilities. Prior to the pandemic, approximately 20.8 million renter households — nearly 48 percent of all renter-occupied households — were housing cost burdened, including about 10.9 million who spend over half of their income on housing.

Low-income households with children are particularly likely to have heavy rent burdens. Figure 1 shows the percentage of households with children that are rent burdened in each income quintile. Over three-quarters of households in the first quintile (with pretax money income below $21,400) were severely housing cost burdened, meaning they spent more than half their monthly income on rent and utilities. Over 30 percent of households in the second quintile (income between $21,400 and $39,000) were severely housing cost burdened. By contrast, hardly any households with children in the 4th income quintile (with income between $60,000 and $94,400) were severely housing cost burdened.

Housing Insecurity Trends Before and During the Pandemic

Figure 2 shows the percentage of households that have experienced housing insecurity — specifically, concern about being able to pay next month’s rent or mortgage — since 2017, by race and ethnicity. Figure 3 shows the share of households with one or more children that have experienced housing insecurity over the same time period. The 2020 data are from the Census Bureau’s Household Pulse Survey (HPS), a weekly experimental survey which began on April 23, 2020. The data for 2017 to 2019 are from the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED). The SHED question is similar to the HPS question, but with some wording differences. (see Methodology, below, for more details.)

As Figure 2 displays, on average, nearly one-in-three renters experienced housing insecurity each week from late April 2020 through July 2020. Among homeowners, about one-in-six were housing insecure, a figure roughly the same as in the 2019 SHED. The lack of an increase in housing insecurity among homeowners overall may be surprising, but is likely due to differences between renters and homeowners, including in demographic and job-related factors, and differences in the surveys.

As shown in Figure 2, there is a clear widening of housing insecurity by race and ethnicity among both renters and homeowners. In 2020, approximately 45 percent of Hispanic renters and 44 percent of Black renters were housing insecure, up by about 13 percentage points and 8 percentage points, respectively, since 2019. Among Hispanic homeowners, insecurity also increased between 2019 and 2020, but much more modestly.

Housing Insecurity Among Households with Children

Figure 3 shows housing insecurity among households that include one or more children (in this figure, renters and owners are combined). In the three years before the pandemic, the housing insecurity gaps between white and Black and white and Hispanic households had been narrowing. But during the past several months this progress was lost and these gaps are now greater than in prior years with roughly 44 to 45 percent of Hispanic and Black households with children experiencing housing insecurity. Over the past three years, the housing insecurity gap between white and Black and white and Hispanic households with children has ranged from 15 to 20 percentage points; this has increased to 26 percentage points because of recent job losses. These figures do not directly measure eviction, foreclosure, or other involuntary housing transitions. But given that Black and Hispanic families generally have lower incomes and fewer assets to draw upon than white families, they are much more likely to face negative housing transitions in the coming months.

Relationships Between Jobs and Earnings Losses, Household Characteristics, and Housing Insecurity During the Pandemic

This preview uses logistic models to estimate the relationship between a households’ characteristics and two measures of housing insecurity in the past several months: (1) deferring or not paying last month’s rent or mortgage (past insecurity), and (2) having no or only slight confidence in paying next month’s rent or mortgage, including having already deferred, or planning to defer, the upcoming payment (future insecurity). An odds ratio greater than one suggests that the likelihood of the outcome was higher than in the reference group; values less than one indicate a lower likelihood of the outcome compared to the reference group.

As shown in Figure 4, households in which someone has lost a job or employment income since the beginning of the pandemic had considerably higher odds of housing insecurity than those without recent job or earnings losses. Renters who had lost jobs or earnings had 2.7 times higher odds of housing insecurity than their job-stable counterparts.

Similarly, low-income households, non-white people, and households with children generally all had higher odds of housing insecurity compared to their reference groups (respectively, households with incomes of $50,000–$99,999, white people, and households without children).

+ When asked about their confidence in paying next month’s rent or mortgage, the odds of Hispanic households feeling less confident were about 70 percent higher than those of their white counterparts regardless of housing tenure. The odds for Black households were even higher, more than twice that of white renters who may struggle with rent payment.

+ Renter households with children had significantly higher odds (68 percent) of falling behind on rent compared with childless households. Among owner-occupied households, having children increases the odds of housing hardship by about 40 percent.

+ Unsurprisingly, the most financially disadvantaged households, regardless of housing tenure, exhibit exceptionally higher odds of falling behind on housing costs (about two times greater), or lacking confidence about upcoming payments (three times greater), than those with annual incomes between $50,000 and $99,999.

One striking finding shown in Figure 4 is that homeowners have not been immune to the pandemic’s adverse effects on housing security, despite the seemingly stable overall trend shown in Figure 2. Homeowners who have lost employment income since the beginning of the pandemic (or live with someone who has) are roughly three times as likely to report mortgage payment difficulties as homeowners who have not lost jobs. Similarly, the odds of lacking confidence about mortgage payments or deferring payments are approximately 2.6 times higher for Black homeowners compared to their white counterparts.

Finally, this preview examines whether racial and ethnic differences in housing insecurity (pooling renters and homeowners) vary by respondent’s gender, while controlling for various other characteristics, including age, education, presence of children in the household, household size, income category, employment status, employment sector, and state of residence.

As Figure 5 shows, the largest differences in housing security are by the respondent’s race or ethnicity. But women are generally more vulnerable than men regardless of race and ethnicity. Hispanics are an exception, with both genders having about the same risk of housing insecurity. Black women have the highest probability of housing insecurity (0.25), while white men have the lowest, with the difference in risk being about 13 percentage points. Black men are just behind Black women in terms of risk. Next are Asian women (0.20), and then, all with roughly similar risks, are Asian men, Hispanic men and women.

Discussion

As a result of the pandemic and the associated economic crisis, millions of renters and homeowners have fallen behind on their housing payments. Housing insecurity is much higher today, particularly among renters, than before the pandemic. Hispanic renters have seen the largest upward surge in housing insecurity since last year, followed by Black renters. The pandemic has erased the mildly declining patterns of housing deprivation among households with children over the past three years, and widened the disparities across racial and ethnic groups seen since 2017.

It is worth noting that due to differences between the SHED and the HPS surveys, as well as the experimental nature of the HPS, the trends documented in this preview may not fully reflect the exact magnitude of rising housing insecurity during the pandemic. A consistent survey that used the same methods and questions from 2017 through 2020 might show larger changes in housing insecurity between 2019 and April-July 2020, including for white renters and homeowners. However, the overall picture is clear: households that have lost jobs and employment income during the initial months of the pandemic are much more likely to be housing insecure than job-stable households, and racial and ethnic gaps in housing insecurity have widened.

Our analyses that adjust for a range of demographic and other factors further confirm this pattern. Recent household job or earnings losses are significantly associated with housing insecurity. Members of racial or ethnic groups are more likely to be housing insecure. This finding holds for both renters and homeowners. Among owner-occupied households, the odds of skipping last month’s or lacking confidence for next month’s housing payment for Black people is nearly twice that for Hispanics, when compared to their white counterparts. Measures that could prevent foreclosure for homeowners are as important as any rent relief that would help stabilize renters’ financial situations.

Combining data on renter- and owner-occupied households, we find that a typical Black household (irrespective of the respondent’s gender) has a much higher probability of experiencing housing insecurity, even after adjusting for other individual or household characteristics. As a result, the crisis is likely to increase the debt burdens on Black renters and homeowners, increase the number who are evicted or end up in foreclosure, and reduce the ability of Black renters to purchase homes. The combined result is likely to be a widening of the already well-documented racial wealth gap.

Rent and mortgage payments that are deferred or otherwise unpaid become debts that households remain liable for, even during periods covered by federal, state, or local moratoria on evictions and foreclosures. As households that missed or deferred payments gradually work to get back to their financial floor, they will be saddled with large debts. These will be particularly unmanageable for the millions of low-income households that were cost-burdened even in the best of recent times. This makes it particularly important for Congress and the President to quickly come to an agreement on pandemic relief legislation that includes a large increase in direct financial relief to low- and middle-income renters and homeowners who have deferred or otherwise missed past housing payments, and those who will be unable to make housing payments in the months ahead.

Methodology

The 2020 data on housing insecurity are from the Census Bureau’s Household Pulse Survey (HPS), a weekly experimental survey which began on April 23, 2020. Two survey questions in the Census HPS measure housing insecurity: (a) whether households paid or deferred last month’s housing payment, and (b) how confident respondents were that their household will be able to pay its next rent or mortgage payment on time. The listed answers for the second question were  no/slight/moderate/high confidence and payment is/will be deferred. We categorize answers to the second question as a dichotomous variable and define households as lacking confidence about upcoming payments if they reported no or slight confidence or if they anticipated deferring, or had already deferred, next month’s payment. The data on housing insecurity in 2017 to 2019 are from the Federal Reserve’s Survey of Household Economics and Decisionmaking (SHED). The specific question asked in the 2019 SHED is: “Are you expecting to be unable to pay or only make a partial payment on each of the following bills this month?” with “rent or mortgage” being one of the listed bills.

Gassing Immigrants with a Highly Toxic Industrial Disinfectant in Detention

Dave Lindorff

As the first and hopefully only presidential term of Donald Trump nears its November 3 moment of truth, the accusations of fascist or even Nazi tendencies and actions by him and his administration have multiplied.

But this latest one I’m calling out is particularly horrific: The use of a powerful “for industrial use only” disinfectant called HDQ Neutral on captive immigrants at the Adelanto ICE Processing Center, a Trump administration-funded for-profit detention center outside of Los Angeles, CA.

According to a report in the Independent, a UK newspaper, the powerful toxic ammonia-based chemical made by Spartan Chemical Co. is being sprayed in the occupied detention facility despite company warnings on the label that it only be used near people outdoors, not in confined spaces. Worse yet, there are allegations from detainees that the chemical is being sprayed directly on them, though the company’s label warns that exposure to the eyes can cause “permanent eye damage” while inhaling it can cause lung damage , breathing difficulty and asthma.

The Nazi connection?  As Charles Vidich, author of a powerful and timely new book due out later this year on the history of quarantines in the US, dating back to the earliest days of the Colonies in the 1600s down to the present (Germs at Bay, Praeger),  notes, Zyklon B, the extermination gas of choice of Hitler’s Third Reich for its extermination camps, was actually a powerful cyanide-based insecticide invented during the late 19th Century. It was for decades, well into the early 20th century, used to fumigate ships engaged in international trade in order to kill rats, mice, fleas and other vermin.  The Nazis adopted a variant of the product to eliminate Jews, Gypsies, Communists, people with deformities or retardation and other “undesirables” during the war years.

Now we have the administration of Donald Trump, whose own family had a history of Nazi sympathies and who himself has referred to Nazi demonstrators in the US as “good people,” similarly using an insecticide/disinfectant that is highly toxic and life-threatening on detained immigrants awaiting deportation

.Investigations by Reuters an organization called the Shut Down Adelanto Coalition and a not-for-profit legal organization called Earthjustice, have learned that immigrants locked indoors in detention at Adelanto have been getting sprayed “as often as every 15-30 minutes,” sometimes directly at them, with a chemical that the company says should only be used outdoors or in well-ventilated areas. They are reporting rashes, nosebleeds, nausea, headaches and breathing difficulties among other symptoms following the spraying.

I must point out that when I first learned about the vicious way African slaves were treated in the colonies and later in the United States by their owners, it struck me, even as a youngster, that it was strangely worse than these white owners treated their own beasts of burden. I wondered at that, only coming to understand later as I got older, that the abuse of slaves — the whippings, the starving, the over-working, etc. —  was a control mechanism, a dehumanization process of both owner and slave that wasn’t necessary in dealing with horses or cattle. I recognize that the same analysis applies to the way ICE and its detention center contract employees cruelly abuse their immigrant captives.

HDQ Neutral thankfully isn’t as toxic as the Zyklon B gas used by Nazi death squads at the German extermination camps, but what is being done is still a grotesque chemical assault on America’s “undesirables,”  differing from the Nazi efforts against their human victims only in degree.  The inhumanity of the overlords administering this toxin to their captive victims is little different from that which was punished, often with death sentences, in the Nuremberg Trials that followed World War II.

One can only hope that when this Trumpian nightmare is over in the US, Donald Trump and his criminal henchmen in the Homeland Security Department will be similarly hauled before a court to face crimes against humanity charges for their abuse of immigrants, including young children, as well as for their other grotesque crimes.

Playing With Fire: China Fuels Middle East Arms Race

James M. Dorsey

Unfettered Chinese support for Saudi Arabia’s so far peaceful nuclear energy program risks fueling a burgeoning Middle East arms race amid concerns that the 2015 Iranian nuclear agreement is all but dead, Turkey suggesting it has the right to develop nuclear weapons, and Israel certain to not remain idle if nuclear proliferation becomes the name of the game.

Aided and abetted by China, the Middle East risks barreling towards a nuclear and ballistic missiles arms race.

A disclosure in the last week that Saudi Arabia has constructed, with the help of China, a facility for extracting uranium yellowcake from uranium is the latest in a series of Chinese moves that advance the kingdom’s drive to acquire nuclear technology.

Saudi Arabia has denied building a yellowcake facility but insisted that mining its uranium reserves was part of its economic diversification strategy. The Saudi energy ministry said it was cooperating with China in unspecified aspects of uranium exploration.

The Saudi nuclear drive is likely to stiffen Iranian resolve, fuel Turkish ambitions, and heighten Israeli worries that its regional military superiority could be jeopardized.

For the past year, Iran has progressively walked away from commitments it made as part of a 2015 international agreement that curbed the Islamic Republic’s nuclear ambitions after the Trump administration withdrew from the deal in 2018 and re-imposed harsh economic sanctions.

Saudi Arabia, despite denials, like Israel, fears that the United States will renegotiate the deal in ways that would fall short of providing iron clad guarantees that Iran will not  develop nuclear weapons or enhanced ballistic missile capability or curb its support for militant proxies in Lebanon, Iraq, and Yemen.

The fear is irrespective of whether Donald J. Trump or presumptive Democratic presidential candidate Joe Biden wins the November election in the United States.

Saudi Crown Prince Mohammed bin Salman warned in 2018 that “Saudi Arabia does not want to acquire any nuclear bomb, but without a doubt, if Iran developed a nuclear bomb, we will follow suit as soon as possible.”

Faced with the prospect of a Saudi-Iranian nuclear arms race, Turkish President Recep Tayyip Erdogan last year insisted that it was unacceptable that nuclear-armed countries were preventing his nation from developing nuclear weapons.

Ironically, Chinese support for a peaceful Saudi nuclear program that inevitably would provide the kingdom with building blocks that could contribute to the development of nuclear weapons risks driving a wedge between Saudi Arabia and Israel.

The two countries have, in the absence of formal diplomatic relations, forged close informal ties based on their shared animosity towards Iran and the kingdom’s effort to capitalize in Washington and elsewhere on being seen to engage with Israel as well as Jewish groups.

“For Israel, a Saudi nuclear military capability is a red line that it will be willing to enforce,” said Sigurd Neubauer, author of a just published book on Israeli-Gulf relations.

Saudi Arabia’s nuclear focus serves various goals: diversification of its economy, reduction of its dependence on fossil fuels, countering a potential future Iranian nuclear capability, and enhancing efforts to ensure that Saudi Arabia rather than Iran emerges as the Middle East’s long-term, dominant power.

Cooperation on nuclear energy was one of 14 agreements worth US$65 billion signed during Saudi King Salman’s 2017 visit to China.

The nuclear-related deals involved a feasibility study for the construction of high-temperature gas-cooled (HTGR) nuclear power plants in Saudi Arabia as well as cooperation in intellectual property and the development of a domestic industrial supply chain for HTGRs to be built in the kingdom.

The agreement was one of a number of nuclear-related understandings concluded with China, including a uranium-related memorandum of understanding with China National Nuclear Corp., an agreement with China Nuclear Engineering Group Corp., and a 2012 accord to cooperate on peaceful uses of nuclear energy.

Saudi Arabia has signed similar agreements with France, the United States, Pakistan, Russia, South Korea, and Argentina.

To advance its pre-pandemic goal of constructing 16 nuclear reactors by 2030 at a cost of US$100 billion, Saudi Arabia established the King Abdullah Atomic and Renewable Energy City devoted to research and application of nuclear technology.

Concern about Saudi intentions was fueled in the last 18 months by Saudi hesitancy to agree to US safeguards viewed as the nuclear industry’s gold standard that would require it among other things to sign the Additional Protocol of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). Saudi Arabia has not ruled out signing the protocol.

The unease was further heightened by evidence that the kingdom was building a ballistic missile production site in a remote desert region. Satellite pictures suggested that the facility resembled a similar site of nuclear power in Pakistan.

Saudi cooperation with Pakistan has long been a source of speculation about the kingdom’s ambition and the implications of its involvement in Pakistan’s nuclear program.

Retired Pakistani Major General Feroz Hassan Khan, the author of a semi-official history of Pakistan’s nuclear program, said in an interview that he had no doubt about the kingdom’s interest.

“Saudi Arabia provided generous financial support to Pakistan that enabled the nuclear program to continue, especially when the country was under sanctions,” Mr. Khan said, referring to US sanctions imposed in 1998 because of Pakistan’s development of a nuclear weapons capability.

The Washington-based Institute for Science and International Security (ISIS) suggested in a report published three years ago that “Pakistan may assist [Saudi Arabia] in . . . important ways, such as supplying sensitive equipment, materials, and know-how used in enrichment or reprocessing.”

The report, referring to the Iran nuclear agreement, warned that “there is little reason to doubt that Saudi Arabia will more actively seek nuclear weapons capabilities, motivated by its concerns . . . if the deal fails.”

Rather than embarking on a covert program, the report predicted that Saudi Arabia would initially focus on building up its civilian nuclear infrastructure as well as a robust nuclear engineering and scientific workforce.

This would allow the kingdom to take command of all aspects of the nuclear fuel cycle at some point in the future. Saudi Arabia has in recent years significantly expanded graduate programs at its five nuclear research centers.

Saudi officials have repeatedly insisted that the kingdom is developing nuclear capabilities for peaceful purposes such as medicine, electricity generation, and desalination of sea water.

“The current situation suggests that Saudi Arabia now has both a high disincentive to pursue nuclear weapons in the short term and a high motivation to pursue them over the long term,” the Institute said.

The report’s analysis suggests that China, by failing to impose restraints on its nuclear dealings similar to those maintained by the United States, may be contributing to a regional downward spiral that would be detrimental to Chinese interests in the longer term.

Google’s Open Letter: Fighting Australia’s News Media Bargaining Code

Binoy Kampmark

Tech giants tend to cast thin veils over threats regarding government regulations.  They are also particularly concerned by those more public spirited ones, the sort supposedly made for the broader interest.  Google has given us an example of this in an open letter published on August 17 to all Australians – the generosity that comes with transparency – that does not shy away from a degree of menace.  Penned by the company’s Australasian managing director Mel Silva, it starts with a note of warning on accessing the Google website, a white exclamation mark framed by a pyramid of yellow. “The way Aussies search every day on Google is at risk from new Government regulation.”

Google’s terse and syntax-challenged response was directed at the draft News Media Bargaining Code developed by the Australian Competition and Consumer Commission and released on July 31.  Digital platforms have made all the running of late, extinguishing media outlets in an exercise of withering effectiveness, while subjugating others.  Along the way, a myth has been created: the idea of small news producers and users, treasured and promoted.

The code seeks to grant news media businesses the power to individually or collectively bargain with Google and Facebook over revenue for news that is included on their platforms.  As the ACCC explains, the imbalance between digital platforms and conventional media outlets has arisen because of the “less favourable terms for the inclusion of news on digital platform services”.  The ACCC would have responsibility to administer and police the code, while the Australian Communications and Media Authority would be the gatekeeper over which media news businesses would qualify to use the scheme.

To qualify, such outlets must, for instance, “predominantly produce ‘core news’, and publish this online”.  They must “adhere to appropriate professional editorial standards” and “maintain editorial independence from the subjects of their news coverage.”  A local ingredient is also added: that they “operate primarily in Australia for the purpose of serving Australian audiences,” with annual revenue exceeding A$150,000 for the most recent financial year or three out of five most recent financial years.

Google regards the Code as nothing less than a satanic imposition on the free flow of information by a state authority. But more to the point, it is a challenge to the way it has sought to cultivate its own licensing arrangements with publishers, known as the Publisher Curated News initiative.  Brad Bender (where to they find them?), Vice President of Product Management News, discussed the plan in a company statement on June 25, 2020.  “The program will help participating publishers monetize their content through an enhanced storytelling experience that lets people go deeper into more complex stories, stay informed and be exposed to a world of different issues and interests.”

Bender, in gibbering like this, shows little understanding of his material.  The quality of news should be shorn of storytelling of an enhanced nature.  Dull facts do not necessarily make for poor reading.  But we do live in the age of Donald Trump and Silicon Valley oligopolies, where, like hormone pumped meat, the taste often matters more than the health of the content.  And complexity is not exactly high on that list of preferences.

The PCN initiative has already yielded various deals with outlets that have done their bit in improving the Australian media stable: The Saturday Paper’s publisher Schwartz Media, Crikey publisher Private Media and InDaily publisher Solstice Media.  Unsurprisingly, Google is using them as paragons of how the negotiated model, free of regulator meddling, works.

According to Silva, permitting the Australian authorities to go ahead with the measure would dramatically worsen Google Search and YouTube and “could lead to your data being handed over to big news businesses, and would put the free service to use at risk in Australia.”  This is markedly amusing, given that Google and that other behemoth, Facebook, is very much into the business handing over the details of consumers to third parties, a practice often excused by complex consent agreements.

The company contends that hefty news media businesses will be unduly advantaged.  All others who have a website, small business or YouTube channel will suffer.  The big entities would “artificially inflate their ranking over everybody else, even when someone else provides a better result.”  Silva suggests that Google is more than generous to news sites as it is, paying them millions of dollars and sending “them billions of free clicks every year.”  To give news site providers a leg-up via government regulation would “put our free services at risk.”

The head of YouTube APAC, Gautam Anand, has also used talk that sits oddly with the Silicon Valley monsters: fairness.  The Code, he argues, would “create an uneven playing field when it comes to who makes money on YouTube.”  The ones to benefit from it will be those “big news businesses who can demand large amounts of money over and above what they earn on the platform” thereby leaving less for “you, our creators, and the programmes to help you develop your audience in Australia and around the globe.”

This has been dismissed as disinformation and piffle by the ACCC.  In a statement released on the same day of Google’s letter it attempted to put to bed claims that the company would find itself having to charge for gratis services.  “Google will not be required to charge Australians for the use of its free services such as Google Search and YouTube, unless it chooses to do so.”  Nor will Google “be required to share any additional user data with Australian news businesses unless it chooses to do so.”

The ACCC has its ardent supporters.  The appropriately named Bridget Fair of Free TV Australia called Google’s letter the product of “a monopolist flexing its considerable muscle” in its attempt to retain “excessive profits.”  The note was “straight out of the monopoly 101 playbook trying to mislead and frighten Australians to protect their position as the gateway to the internet.”  She defends the proposed ACCC code as “ensuring a free and vibrant Australian news media sector into the future.”  Any data Google agreed to supply “would have to be under existing Australian privacy laws.”

While there is much to encourage in terms of having a vibrant media sector of boisterous and inquiring voices, anyone vaguely familiar with the Australian news scape will be aware that it tends towards the yawningly monochrome.  Google’s disingenuous point is that such big leaguers are bound to run off with the revenue loot ahead of smaller news providers, making the situation worse.

The ACCC is accepting public submissions regarding the Code till August 28.  Google has already made its view clear: a shot of threatening fury that government regulations of this sort will unduly hinder the “experience” it provides its users and benefit big fish news outlets.  But the ACCC, this small, relatively miniscule entity in the global regulatory landscape, is spoiling for a fight.

Our Race Against the Clock to Affirm Water as a Human Right

Maude Barlow

Ten years ago today, the United Nations General Assembly adopted a resolution affirming that water and sanitation are fundamental human rights “essential for the full enjoyment of the right to life.” Two months later, the UN Human Rights Council clarified that governments have the primary responsibility to deliver these new rights but called upon member states and international organizations to assist countries of the global South who might struggle to fulfill their new obligations.

This was an historic development in the long search for water justice. Water was not included in the 1948 Universal Declaration of Human Rights as it seemed to be a limitless resource available to all. But a perfect storm of global water depletion and destruction, growing poverty and inequality, and rising water rates for residents – often the result of the privatization of water services – led to a full blown human rights crisis by the turn of the 21st century. With billions living without access to clean water and sanitation, the call for water justice was born.

The fight to recognize the human right to water was surprisingly fierce and bitter. It was opposed by the private water utilities and the bottled water industry, the World Bank that was promoting water privatization in developing countries, the World Water Council, and many wealthy countries of the North, including Great Britain, Canada and the United States.

Food & Water Watch played an important role in achieving this pivotal mandate. Wenonah Hauter (Executive Director)  and I attended many conferences around the world promoting the human right to water and stood up to the “Lords of Water,” as I called them. I was in the balcony of the General Assembly on July 28, 2010, when it overwhelmingly adopted this historic resolution and I remember feeling that, in defining water and sanitation as an issue of justice rather than charity, the human family had just taken an evolutionary step forward.

There have been real and tangible results. Over four dozen countries have either amended their constitutions or introduced new laws to guarantee the human right to water. Communities in the global South have used the UN resolution to fight foreign companies destroying their water sources and gone to court to gain access to local water supplies.

The right to water has been used to fight water shut offs around the world and is a pivotal argument that Food & Water Watch has made to stop water shutoffs in U.S. cities during the time of COVID-19 and beyond. The human right to water is also the foundation of the WATER Act, which would ensure that every person has access to safe clean water in the United States.

To fight water privatization, many towns and cities have become “Blue Communities,” a Canadian initiative that is spreading around the world. Almost 25 million people now live in official Blue Communities that have pledged to protect water as a human right, a public trust and public service and to phase out bottled water on municipal premises and at municipal events. These cities include Montreal, Vancouver, Los Angeles, Paris, Berlin and Brussels.

However, we are in a race against time as industries like fracking and bottled water divert, pollute, over-extract and mismanage the world’s dwindling water supplies. Massive drought is threatening lives and livelihoods around the world. The UN warns that two-thirds of the global population could be living in water-stressed countries in just five short years. Here in the U.S., drought is on the rise, as are water rates.At least 2 million Americans do not have access to running water and basic sanitation.

The COVID-19 pandemic has thrown a huge spotlight on the water crisis as half the population of the world has no place to wash their hands with soap and warm water. As a result, some of the aid money coming from northern countries and the UN will provide clean water and sanitation to those most in peril. Perhaps this will lead to real change. Last year, almost 2 million children died from dirty water and poor sanitation. This is a travesty.

Let us vow to fulfill the pledge taken by the nations of the world ten years ago. Water is a human right.

Donald Trump Is Losing His Tech War with Xi Jinping

Dilip Hiro

For the Trump administration’s senior officials, it’s been open season on bashing China. If you need an example, think of the president’s blame game about “the invisible Chinese virus” as it spreads wildly across the U.S.

When it comes to China, in fact, the ever more virulent criticism never seems to stop.

Between the end of June and the end of July, four members of his cabinet vied with each other in spewing anti-Chinese rhetoric. That particular spate of China bashing started when FBI Director Christopher Wray described Chinese President Xi Jinping as the successor to Soviet dictator Joseph Stalin. It was capped by Secretary of State Mike Pompeo’s clarion call to U.S. allies to note the “bankrupt” Marxist-Leninist ideology of China’s leader and the urge to “global hegemony” that goes with it, insisting that they would have to choose “between freedom and tyranny.” (Forget which country on this planet actually claims global hegemony as its right.)

At the same time, the Pentagon deployed its aircraft carriers and other weaponry ever more threateningly in the South China Sea and elsewhere in the Pacific. The question is: What lies behind this upsurge in Trump administration China baiting? A likely answer can be found in the president’s blunt statement in a July interview with Chris Wallace of Fox News that “I’m not a good loser. I don’t like to lose.”

The reality is that, under Donald Trump, the United States is indeed losing to China in two important spheres. As the FBI’s Wray put it, “In economic and technical terms [China] is already a peer competitor of the United States… in a very different kind of [globalized] world.” In other words, China is rising and the U.S. is falling. Don’t just blame Trump and his cronies for that, however, as this moment has been a long time coming.

Facts speak for themselves. Nearly unscathed by the 2008-2009 global recession, China displaced Japan as the world’s second largest economy in August 2010. In 2012, with $3.87 trillion worth of imports and exports, it overtook the U.S. total of $3.82 trillion, elbowing it out of a position it had held for 60 years as the number one cross-border trading nation worldwide. By the end of 2014, China’s gross domestic product, as measured by purchasing power parity, was $17.6 trillion, slightly exceeding the $17.4 trillion of the United States, which had been the globe’s largest economy since 1872.

In May 2015, the Chinese government released a Made in China 2025 plan aimed at rapidly developing 10 high-tech industries, including electric cars, next-generation information technology, telecommunications, advanced robotics, and artificial intelligence. Other major sectors covered in the plan included agricultural technology, aerospace engineering, the development of new synthetic materials, the emerging field of biomedicine, and high-speed rail infrastructure. The plan was aimed at achieving 70% self-sufficiency in high-tech industries and a dominant position in such global markets by 2049, a century after the founding of the People’s Republic of China 

Semiconductors are crucial to all electronic products and, in 2014, the government’s national integrated circuit industry development guidelines set a target: China was to become a global leader in semiconductors by 2030. In 2018, the local chip industry moved up from basic silicon packing and testing to higher value chip design and manufacturing. The following year, the U.S. Semiconductor Industry Association noted that, while America led the world with nearly half of global market share, China was the main threat to its position because of huge state investments in commercial manufacturing and scientific research.

By then, the U.S. had already fallen behind China in just such scientific and technological research. A study by Nanjing University’s Qingnan Xie and Harvard University’s Richard Freeman noted that between 2000 and 2016, China’s share of global publications in the physical sciences, engineering, and math quadrupled, exceeding that of the U.S.

In 2019, for the first time since figures for patents were compiled in 1978, the U.S. failed to file for the largest number of them. According to the World Intellectual Property Organization, China filed applications for 58,990 patents and the United States 57,840. In addition, for the third year in a row, the Chinese high-tech corporation Huawei Technologies Company, with 4,144 patents, was well ahead of U.S.-based Qualcomm (2,127). Among educational institutions, the University of California maintained its top rank with 470 published applications, but Tsinghua University ranked second with 265. Of the top five universities in the world, three were Chinese.

The Neck-and-Neck Race in Consumer Electronics

By 2019, the leaders in consumer technology in America included Google, Apple, Amazon, and Microsoft; in China, the leaders were Alibaba (founded by Jack Ma), Tencent (Tengxun in Chinese), Xiaomi, and Baidu. All had been launched by private citizens. Among the US companies, Microsoft was established in 1975, Apple in 1976, Amazon in 1994, and Google in September 1998. The earliest Chinese tech giant, Tencent, was established two months after Google, followed by Alibaba in 1999, Baidu in 2000, and Xiaomi, a hardware producer, in 2010. When China first entered cyberspace in 1994, its government left intact its policy of controlling information through censorship by the Ministry of Public Security.

In 1996, the country established a high-tech industrial development zone in Shenzhen, just across the Pearl River from Hong Kong, the first of what would be a number of special economic zones. From 2002 on, they would begin attracting Western multinational corporations keen to take advantage of their tax-free provisions and low-wage skilled workers. By 2008, such foreign companies accounted for 85% of China’s high-tech exports.

Shaken by an official 2005 report that found serious flaws in the country’s innovation system, the government issued a policy paper the following year listing 20 mega-projects in nanotechnology, high-end generic microchips, aircraft, biotechnology, and new drugs. It then focused on a bottom-up approach to innovation, involving small start-ups, venture capital, and cooperation between industry and universities, a strategy that would take a few years to yield positive results.

In January 2000, less than 2% of Chinese used the Internet. To cater to that market, Robin Li and Eric Xu set up Baidu in Beijing as a Chinese search engine. By 2009, in its competition with Google China, a subsidiary of Google operating under government censorship, Baidu garnered twice the market share of its American rival as Internet penetration leapt to 29%.

In the aftermath of the 2008-2009 global financial meltdown, significant numbers of Chinese engineers and entrepreneurs returned from Silicon Valley to play an important role in the mushrooming of high-tech firms in a vast Chinese market increasingly walled off from U.S. and other Western corporations because of their unwillingness to operate under government censorship.

Soon after Xi Jinping became president in March 2013, his government launched a campaign to promote “mass entrepreneurship and mass innovation” using state-backed venture capital. That was when Tencent came up with its super app WeChat, a multi-purpose platform for socializing, playing games, paying bills, booking train tickets, and so on.

Jack Ma’s e-commerce behemoth Alibaba went public on the New York Stock Exchange in September 2014, raising a record $25 billion with its initial public offering. By the end of the decade, Baidu had diversified into the field of artificial intelligence, while expanding its multiple Internet-related services and products. As the search engine of choice for 90% of Chinese Internet users, more than 700 million people, the company became the fifth most visited website in cyberspace, its mobile users exceeding 1.1 billion.

Xiaomi Corporation would release its first smartphone in August 2011. By 2014, it had forged ahead of its Chinese rivals in the domestic market and developed its own mobile phone chip capabilities. In 2019, it sold 125 million mobile phones, ranking fourth globally. By the middle of 2019, China had 206 privately held start-ups valued at more than $1 billion, besting the U.S. with 203.

Among the country’s many successful entrepreneurs, the one who particularly stood out was Jack Ma, born Ma Yun in 1964. Though he failed to get a job at a newly opened Kentucky Fried Chicken outlet in his home city of Hangzhou, he did finally gain entry to a local college after his third attempt, buying his first computer at the age of 31. In 1999, he founded Alibaba with a group of friends. It would become one of the most valuable tech companies in the world. On his 55th birthday, he was the second richest man in China with a net worth of $42.1 billion.

Born in the same year as Ma, his American counterpart, Jeff Bezos, gained a degree in electrical engineering and computer science from Princeton University. He would found Amazon.com in 1994 to sell books online, before entering e-commerce and other fields. Amazon Web Services, a cloud computing company, would become the globe’s largest. In 2007, Amazon released a handheld reading device called the Kindle. Three years later, it ventured into making its own television shows and movies. In 2014, it launched Amazon Echo, a smart speaker with a voice assistant named Alexa that let its owner instantly play music, control a Smart home, get information, news, weather, and more. With a net worth of $145.4 billion in 2019, Bezos became the richest person on the planet.

Deploying an artificial intelligence inference chip to power features on its e-commerce sites, Alibaba categorized a billion product images uploaded by vendors to its e-commerce platform daily and prepared them for search and personalized recommendations to its customer base of 500 million. By allowing outside vendors to use its platform for a fee, Amazon increased its items for sale to 350 million — with 197 million people accessing Amazon.com each month.

China also led the world in mobile payments with America in sixth place. In 2019, such transactions in China amounted to $80.5 trillion. Because of the Covid-19 pandemic, the authorities encouraged customers to use mobile payment, online payment, and barcode payment to avoid the risk of infection. The projected total for mobile payments: $111.1 trillion. The corresponding figures for the United States at $130 billion look puny by comparison.

In August 2012, the founder of the Beijing-based ByteDance, 29-year-old Zhang Yiming, broke new ground in aggregating news for its users. His product, Toutiao (Today’s Headlines) tracked users’ behavior across thousands of sites to form an opinion of what would interest them most, and then recommended stories.

By 2016, it had already acquired 78 million users, 90% of them under 30.

In September 2016, ByteDance launched a short-video app in China called Douyin that gained 100 million users within a year. It would soon enter a few Asian markets as TikTok. In November 2017, for $1 billion, ByteDance would purchase Musical.ly, a Shanghai-based Chinese social network app for video creation, messaging, and live broadcasting, and set up an office in California.

Zhang merged it into TikTok in August 2018 to give his company a larger footprint in the U.S. and then spent nearly $1 billion to promote TikTok as the platform for sharing short-dance, lip-sync, comedy, and talent videos. It has been downloaded by 165 million Americans and driven the Trump administration to distraction. A Generation Z craze, in April 2020 it surpassed two billion downloads globally, eclipsing U.S. tech giants. That led President Trump (no loser he!) and his top officials to attack it and he would sign executive orders attempting to ban both TikTok and WeChat from operating in the U.S. or being used by Americans (unless sold to a U.S. tech giant). Stay tuned.

Huawei’s Octane-Powered Rise

But the biggest Chinese winner in consumer electronics and telecommunications has been Shenzhen-based Huawei Technologies Company, the country’s first global multinational. It has become a pivot point in the geopolitical battle between Beijing and Washington.

Huawei (in Chinese, it means “splendid achievement”) makes phones and the routers that facilitate communications around the world. Established in 1987, its current workforce of 194,000 operates in 170 countries. In 2019, its annual turn-over was $122.5 billion. In 2012, it outstripped its nearest rival, the 136-year-old Ericsson Telephone Corporation of Sweden, to become the world’s largest supplier of telecommunications equipment with 28% of market share globally. In 2019, it forged ahead of Apple to become the second largest phone maker after Samsung.

Several factors have contributed to Huawei’s stratospheric rise: its business model, the personality and decision-making mode of its founder Ren Zhengfei, state policies on high-tech industry, and the firm’s exclusive ownership by its employees.

Born in 1944 in Guizhou Province, Ren Zhengfei went to Chongqing University and then joined a military research institute during Mao Zedong’s chaotic Cultural Revolution (1966-1976). He was demobilized in 1983 when China cut back on its engineering corps. But the army’s slogan, “fight and survive,” stayed with him. He moved to the city of Shenzhen and worked in the country’s infant electronics sector for four years, saving enough to co-found what would become the tech giant Huawei. He focused on research and development, adapting technologies from Western firms, while his new company received small orders from the military and later substantial R&D (research and development) grants from the state to develop GSM (Global System for Mobile Communication) phones and other products. Over the years, the company produced telecommunications infrastructure and commercial products for third generation (3G) and fourth generation (4G) smartphones.

As China’s high-tech industry surged, Huawei’s fortunes rose. In 2010, it hired IBM and Accenture PLC to design the means of managing networks for telecom providers. In 2011, the company hired the Boston Consulting Group to advise it on foreign acquisitions and investments.

Like many successful American entrepreneurs, Ren has given top priority to the customer and, in the absence of the usual near-term pressure to raise income and profits, his management team has invested $15 to 20 billion annually in research and development work. That helps explain how Huawei became one of the globe’s five companies in the fifth generation (5G) smartphone business, topping the list by shipping out 6.9 million phones in 2019 and capturing 36.9% of the market. On the eve of the release of 5G phones, Ren revealed that Huawei had a staggering 2,570 5G patents.

So it was unsurprising that in the global race for 5G, Huawei was the first to roll out commercial products in February 2019. One hundred times faster than its 4G predecessors, 5G tops out at 10 gigabits per second and future 5G networks are expected to link a huge array of devices from cars to washing machines to door bells.

Huawei’s exponential success has increasingly alarmed a Trump administration edging ever closer to conflict with China. Last month, Secretary of State Pompeo described Huawei as “an arm of the Chinese Communist Party’s surveillance state that censors political dissidents and enables mass internment camps in Xinjiang.”

In May 2019, the U.S. Commerce Department banned American firms from supplying components and software to Huawei on national security grounds. A year later, it imposed a ban on Huawei buying microchips from American companies or using U.S.-designed software. The White House also launched a global campaign against the installation of the company’s 5G systems in allied nations, with mixed success.

Ren continued to deny such charges and to oppose Washington’s moves, which have so far failed to slow his company’s commercial advance. Its revenue for the first half of 2020, $65 billion, was up by 13.1% over the previous year.

From tariffs on Chinese products and that recent TikTok ban to slurs about the “kung flu” as the Covid-19 pandemic swept America, President Trump and his team have been expressing their mounting frustration over China and ramping up attacks on an inexorably rising power on the global stage. Whether they know it or not, the American century is over, which doesn’t mean that nothing can be done to improve the U.S. position in the years to come.

Setting aside Washington’s belief in the inherent superiority of America, a future administration could stop hurling insults or trying to ban enviably successful Chinese tech firms and instead emulate the Chinese example by formulating and implementing a well-planned, long-term high-tech strategy. But as the Covid-19 pandemic has made abundantly clear, the very idea of planning is not a concept available to the “very stable genius” presently in the White House.

Johnson government forced to retreat on A-level exam results

Thomas Scripps

UK Prime Minister Boris Johnson’s government executed a dramatic U-turn yesterday, retreating on its social class-based downgrading of A-level results.

The retreat comes less than three weeks before the Conservatives intend to force schools to reopen, and just over a month before universities resume.

With final year exams cancelled by the COVID-19 pandemic, the government had teachers submit estimated grades for their students, most of which were then centrally moderated by an algorithm. Almost a quarter of Scottish results and around 40 percent of English, Welsh, and Northern Irish were originally lowered by at least a grade—over 3 percent in England were docked by two grades or more.

Yesterday afternoon, however, Education Secretary Gavin Williamson announced with an apology that A-levels results for students in England will now be based solely on teacher-awarded grades, as will GCSE results, awarded later this week. The same retreat had earlier been carried out by the Scottish, Northern Irish, and Welsh governments. Last-ditch attempts by the Tories to offer a few unfeasible token concessions—including allowing students to use some mock exam grades in an unspecified process—fell to pieces.

The precise impact of the government’s reversal will take time to come out—some students are already reporting that university courses they have now qualified for have since become full.

The exam results fiasco is a case study in the fundamentally opposed interests of millions of working people, and the capitalist class and all its political representatives.

For the initial assigning of grades, the defining influence on the government’s results “moderation” algorithm was social class. In Scotland, the most deprived areas saw the proportion of students receiving A-C grades reduced by 15.2 percent, while the percentage for the most affluent areas was only 6.9 percent. The same pattern played out in England. More than 10 percent of students in the lowest third for socioeconomic status had a teacher-awarded C grade lowered, compared to 8 percent in the highest third.

This obscured more fine-grained inequalities. Research by social mobility charity UpReach found that subjects taken overwhelmingly by private school students were significantly more highly graded as a result of this process than those taken by the working-class majority. The number of students receiving an A* in Latin increased 10.4 percent, and the number receiving an A*/A in Classics by 10.4 percent.

Private schools increased their number of A and A* grades by 4.7 percent this year, more than double the 2 percent registered by comprehensive secondary schools, and almost 16 times the 0.3 percent increase for Sixth Form and Further Education colleges, catering mainly for working class youth. The Sixth Form Colleges Association (SFCA) looked at 65,000 exam entries across 41 subjects in its member colleges and found that grades were 20 percent lower than past performances.

Overall, the gap between pupils receiving free school meals—an indicator of severe economic hardship—and those who do not widened significantly, alongside the gap between those with disabilities and special educational needs and those without.

There could be few clearer demonstrations of the class-riven nature of contemporary society. The government desperately needed to get results issued to proceed with its criminal business-as-usual reopening of schools, universities, and the economy. But even when their overriding goal was to move towards reopening as smoothly as possible, to give as little opportunity as possible for the working class to intervene, and amid endless propaganda of how “we are all in this together”, government ministers and officials could not abandon their vicious class bias for a second.

Their actions unleashed a wave of opposition, setting working class children, families, and schools directly against the government. Protests of young people which began in Scotland spread to England, with its much larger population and student body, greatly expanding the scope of the crisis. The catastrophe was set to be compounded later this week as millions of GCSE results are released for around 700,000 16-year-old pupils. Whereas 82 percent of A-level results were affected by the government’s algorithm, the Observer reported that the figure would have been 97 percent for GCSEs.

It is significant that after the liberal media and pseudo-left groups have spent months working to channel multiracial protests against police violence into racialist politics, young protestors took to the streets with signs that read, “Classism at its finest,” “It’s blatant classism,” “It’s the classism for me,” “Judge my school work, not my income,” “No Etonians were harmed in the making of this algorithm,” and “Working class does not equal stupid.”

Under these circumstances, the ruling class political machine went into action to prevent this sentiment triggering opposition to the reopening of schools and universities—without having brought the coronavirus pandemic under control.

By Monday, several leading Tory MPs were calling for a delay and a “rethink” in issuing GCSE grades. However, by far the most significant piece of advice was delivered by Labour Party leader, Sir Keir Starmer. Within days of criticising the Tory government’s handling of A-level results, Starmer took to the pages of the right-wing Daily Mail to back Johnson’s “reopen schools” policy.

In the same breath as he invoked the results crisis, which exposed the government’s “improving students’ life chances” justification for reopening as a rotten fraud, Starmer exhorted the elitist, social Darwinist Tory leader, “Let me send a very clear message to the Prime Minister: I don’t just want all children back at school next month, I expect them back at school. No ifs, no buts, no equivocation.”

Echoing Johnson’s own words, Starmer continued, “The Prime Minister wrote in this paper last weekend that we have a moral duty to reopen schools. I agree. What he does not seem to understand is that he has a moral responsibility to make sure it happens.”

For Starmer, the only real problem with the A-level results crisis was that it threatened to undermine the pro-business back-to-work agenda that Labour shares with the Tories.

Not a single fundamental issue confronting society can be left in the hands of the ruling class and its political parties. Class society produces catastrophe after catastrophe, destroying thousands of lives and the future of millions at every new turn. The rational and humane solution to social problems—most urgently of all, the global COVID-19 pandemic—demands the independent intervention of the working class, organised in rank-and-file committees in every school, workplace, and neighbourhood in the fight for socialism.