Signs of emerging crisis in economy and financial system

Nick Beams

As Wall Street continues to surge to record highs—Apple has doubled its market capitalization from $1 trillion to $2 trillion in just two years and the S&P 500 index has surged 50 percent since the mid-March crash—there are clear indications of a crisis building up both in the real economy and the financial system.

Last week, the Financial Times reported that while the market was at a record high, “corporate distress” in the US had never been worse with “large corporate bankruptcy filings” running at a record pace and set to exceed levels reached in the aftermath of the financial crisis of 2008.

As of August 17, a record 45 companies, each with assets of more than $1 billion, had filed for Chapter 11 bankruptcy, compared with 38 in the same period in 2009 and more than double the figure of 19 in the comparable period last year.

It reported that in total 157 companies with assets of more than $50 million have filed for bankruptcy with a lot more expected to follow.

Ben Schlafman, the chief operating officer at New Generation Research, which tracks bankruptcy filings, told the newspaper: “We are in the first innings of this bankruptcy cycle. It will spread far across industries as we get deeper into the crisis.

“It pains me to say it, but bankruptcy is a growth industry in America.”

The Labor Secretary in the Clinton administration, Robert Reich, said cutting off the $600 per week federal unemployment benefit will push tens of millions into poverty or close to it.

“They won’t have the money to buy billions of dollars worth of goods and services. As a result the entire economy will suffer. Small businesses will continue to suffer the most because they are already precarious.”

Goldman Sachs has said it expects that of the 22 million workers cut from payrolls in the first wave of the pandemic almost a quarter will be permanently axed. In a research note published on Friday and reported on Bloomberg, Goldman Sachs economist Joseph Briggs said that while there was a return to work from temporary layoffs, “other patterns suggest that rehiring prospects for temporarily laid-off workers started to deteriorate in July” and some 2 million workers could remain unemployed well into next year.

Reporting on the situation in Britain, the Financial Times said that accounting, law and investment banking firms were “preparing for a fresh wave of distress in the autumn” when government loan schemes to run out.

Leading insolvency barrister Mark Phillips said: “There are a series of crises looming. The full wave of insolvencies hasn’t even started yet.”

Financial and accounting firms have been involved in efforts to aid companies in restructuring their debt and raise capital to avoid a collapse.

“But the winding down of state support schemes is expected to trigger a large number of insolvency proceedings, as many of these companies run out of cash,” the FT said.

In the major industrial centres of Europe there are fears that after what was described as bounce back from the sharp economic contraction in the spring, the recovery is now starting to slow.

There was a 22.5 percent rise in industrial production across the euro zone in May and June, but this was not enough to compensate for the 28 percent fall in the first two months of the pandemic. Germany’s central bank has reported that euro zone manufacturers are still only operating at 72 percent capacity in July compared to their long-term average of 80 percent.

The car-making industry, which forms a vital component of the German economy, has been hard hit, with predictions that global car sales will fall to 69 million this year compared to 88 million in 2019. The head of Audi has said he does not expect the levels of car production to return to their pre-crisis levels at least until 2022 or 2023.

But even these predictions could be knocked awry in the face of what is clearly a resurgence of the pandemic. In the US, it continues to rage out of control while in Europe there are sharp rises in the number of infections due to the return to work drive of governments amid the push to reopen schools.

Last Friday alone, Spain reported 8000 new COVID-19 infections, with the infection rate rising across the region. In Germany the Robert Koch Institute, the country’s main public health organisation said infections had risen sharply in all of the country’s 16 regions in seven days, describing the situation as “alarming.”

Infections have surged again in South Korea, one of the world’s major industrial and manufacturing centres with an additional 397 cases reported on Sunday, the highest number since the beginning of March.

“Cases are rising in 17 cities and provinces across the nation, and we are now at the verge of a massive nationwide outbreak,” the head of the country’s Center for Disease Control and Prevention, Jung Eun-kyeong, told a news briefing on Sunday.

Amid this wave of disease and economic devastation, markets have continued to rise. But there are growing fears that the conditions are building up for a major financial crisis. The market rise has driven the surge in technology stocks, which form a large component of the S&P 500 index and, above all, the supply of cheap money from the Fed.

One indication of the effect of the intervention by the Fed, which has pumped around $3 trillion into the financial system, is the lowering of the yield on US Treasury bonds as a result of the central bank’s purchases of government debt.

The yield on the 10-year Treasury bond, a benchmark for both US and global financial markets, is now around 0.6 percent, a full percentage point below its level in February. With the yield on government debt now bringing a negative return when inflation is taken into account, this has fueled a turn to the stock market, gold and corporate debt. This search for a positive return has sparked what has been termed an “everything rally.”

But the rise of the market rests on very shaky foundations as evidenced last week when the minutes of the Fed’s July meeting were published, sending a tremor through Wall Street.

Contrary to many expectations in the market, they showed that the Fed had still not determined into “forward guidance” policy, that is, firm guarantees that there will be no tightening of monetary policy into the indefinite future, including a commitment to purchase bonds to set a cap on bond yields.

With the US government to issue more bonds to finance its debt, this measure is regarded in some quarters as necessary to insure that the increased supply of bonds does not lead to a fall in their price and a consequent rise in interest rates.

Commenting on the massive disconnect between the underlying economy and the stock market, an article in Bloomberg noted that “any number of looming threats could bring the historic rally in US equities to a screeching halt.” They could include conflict over the re-opening of schools, the November election, the conflicts with China or the effects of US monetary policy.

Then there is the issue of the massive increase in corporate debt—more than $1.6 trillion over the past few months. Such is the extent of the debt mountain that Bloomberg reported that an analysis conducted by its intelligence unit revealed that the average below investment-grade firm (or junk-rated company) had debt levels relative to earnings so high in the middle of the year that they would have triggered warnings from bank regulators had they occurred a few years ago.

However, it noted, regulators had dropped those warnings which a few years ago had applied only to a few but which today “could apply to many more.”

Gold has also been part of the “everything rally”—a rise sparked by the search for profit as its price reaches record heights and underlying uncertainty about the stability of the global monetary system as trillions of dollars are created at the press of a computer button by central banks.

While it has been on the rise, the gold price is highly volatile and so sudden downward movement is another factor that could trigger a collapse of the global financial house of cards.

US health care workers infected with COVID-19 pressured to return to work

Alex Johnson

Nurses, doctors and other medical workers in the US who have contracted COVID-19 are increasingly being pressured to return to their hospitals prematurely in violation of public health standards. The failure of health care facilities and employers to provide adequate paid leave—or, in many cases, any paid leave at all—has left health care staff with the cruel “choice” of risking hunger and homelessness for themselves and their families by forfeiting their paychecks or becoming transmitters of the coronavirus in their workplaces.

This homicidal policy is being pursued despite the already existing widespread loss of life and disastrously high infection rates for hospital staff. Health care personnel in many states now account for as many as 20 percent of known coronavirus cases. A joint research project of Kaiser Health News and the Guardian discovered that 167 health care employees have died of COVID-19 while treating infected patients.

Kaiser Health News and Guardian researchers have admitted that the actual number of health care worker deaths due to COVID-19 is likely far higher than 167. A total of 922 health care worker deaths in the course of the pandemic are now being investigated, having been identified as the likely result of coronavirus infection. Internationally, more than 2,000 health care workers across 74 countries have died from the virus, according to a recent “In Memoriam” list released by Medscape.

For the most part, the grievances of health care staff over unsafe conditions have either been ignored or dismissed outright by hospital executives more concerned with cutting costs and increasing profits than protecting the lives of staff members. Dozens of complaints from hospital workers were submitted to the Occupational and Safety and Health Administration (OSHA) this past spring, many of them reporting infected employees being ordered to return to work.

Included is a respiratory clinic in North Carolina where COVID-positive employees were told they would be fired if they stayed home, and a veterans hospital in Massachusetts where ill employees were returning to work because they were not receiving compensation.

Although the bipartisan CARES Act bailout of Wall Street enacted in March included minimal paid time off for workers affected by the pandemic, health care workers have been given virtually no legal protection against unsafe conditions in their workplaces. Emergency responders and health care providers are exempted from the provisions of the Families First Coronavirus Response Act. Anyone who works in a medical facility, from a doctor’s office or nursing home to a pharmacy or medical school, may be excluded by employers from receiving paid sick leave and/or expanded family and medical leave.

Department of Labor officials and other policy makers claim the exemption is necessary to avoid depleting the work force on the frontlines of the pandemic under conditions where large numbers of staff working in overcrowded hospitals have been exposed to COVID-19 patients. This has provoked outrage among health care workers, who point out that on top of being given inadequate personal protective equipment, being forced to work while sick places them and their patients at even higher risk of contracting the virus.

A Kaiser Family Foundation study in early June concluded that approximately 69.4 million workers, four in 10 of the working population, are potentially ineligible for emergency paid sick leave benefits. An estimated one in four of those workers is in the health care industry.

The law also automatically excludes 9.5 million health care workers employed by a private employer with 500 or more employees, while an additional 8.1 million health care workers are subject to the exemption at the whim of their employer. This amounts to about 17.7 million health care workers who are not guaranteed access to federal emergency paid sick leave benefits, even if forced to quarantine because of testing positive for COVID-19.

Moreover, some 15 percent of workers at health care and other social assistance firms are denied any paid sick leave by their employers. Lack of available paid leave has been the main factor discouraging workers with symptoms of COVID-19 from staying home and preventing mass exposure among colleagues and patients.

This exemption has been felt the most among the lowest paid and most exploited sections of the health care work force. About a quarter (24 percent) of the health care workforce who are excluded or subject to exemption are part-time workers. Many of them are highly unlikely to receive any paid leave benefits from their employer beyond sick leave. Additionally, 18 percent of them are low-wage, and therefore have very little saved for emergencies, making it nearly impossible to claw out of a financial hole caused by being deprived of work.

There are pervasive staff shortages at health care facilities. In nursing homes, which remain key hotspots for the spread of COVID-19, low staffing is cited as a culprit in the prevalence of COVID-19 outbreaks. A study released by two University of Chicago researchers who examined various characteristics of facilities with confirmed COVID-19 cases showed that staffing shortages were increasingly linked to nursing home outbreaks.

Another research study published by the JAMA (Journal of the American Medical Association) Network found that of three primary issues factored into a facility’s five-star CMS (Centers for Medicare & Medicaid Services) rating—including health inspection, quality measures and staffing—only staffing coverage served as a reliable predictor of the scale of COVID-19 outbreaks.

In eight states, nursing homes with high ratings for nurse staffing had fewer COVID-19 cases than nursing homes with low ratings for staffing. The eight states that were investigated—California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey and Pennsylvania—have all been devastated by the pandemic.

Staffing cuts at major hospital chains have produced significant eruptions of working class resistance and militancy. At California’s HCA Healthcare conglomerate, nearly 1,000 nurses and support staff struck in late June to protest years of cuts and concessions imposed by management and the Service Employees International Union (SEIU). Similar struggles have taken place in other states against billion-dollar hospital chains, including 720 registered nurses in Illinois who went on strike in early July to oppose AMITA Health’s abysmal staffing levels.

All of these struggles have been sold out by the unions, which have done everything in their power to isolate strikes and protests where they could not prevent them from taking place. They have stood by and allowed the health care corporations to pay strikebreakers. At the same time, they have limited strikes to pre-determined lengths so as to let health care staff blow off steam while they worked out concessionary contracts with management behind the backs of the workers.

Health care workers can secure adequate staffing and paid leave only through the formation of rank-and-file safety committees independent of the corrupt trade unions. Staff at clinics, hospitals and other medical facilities must unite their struggles in preparation for a nationwide general strike to fight for the containment and eradication of the pandemic and ensure that the economic needs of workers are met.

Lukashenko threatens military crackdown in Belarus as US initiates discussions with opposition leader

Clara Weiss

Amid ongoing strikes and protests, the regime of Alexander Lukashenko, who claims to have won the August 9 presidential elections with 80 percent of the votes, has threatened an all-out military crackdown on protesters.

On Sunday, mass protests again took place in several cities. In Minsk, protests were said to be about as large as the Sunday before, when an estimated 100,000 protesters were out in the streets. In Grodno, a city in the west of the country, about 20,000 people demonstrated against Lukashenko, demanding that he resign. The Grodno region, along with Minsk, has been the main center of the strike movement that has swept the country for two weeks now.

Protesters called for new elections, and many chanted slogans in support of striking miners in Soligorsk and tractor factory workers in Minsk. There was a heavy police and military presence during the protest in Minsk, with soldiers surrounding World War II monuments in the city center. The Ministry of Defense had earlier published a statement “strictly warning” that “In case of disruption of the order and peace in these places—you will have to deal not with the police but with the Army.” The Ministry of Defense also denounced protesters as “fascists.”

Protests in Minsk on August 16

After the protest ended, extraordinary scenes showed Lukashenko flying over the empty streets of Minsk, saying “they’ve dispersed like rats.” He descended from the helicopter at the presidential residence with an automatic rifle in hand, and was cheered by heavily armed security personnel.

The mass rallies and strikes were triggered by the initial brutal response by the regime to protests against the election results on August 9 and 10. Over 7,000 people were arrested in the first week of the demonstrations, and 80 people are still unaccounted for. There have been reports of torture and the rape of prisoners with objects, leaving women unable to bear children. As mass protests and strikes continued to grow, the regime initially toned down its use of violence against the protesters. However, now it has decided to go into a full-blown confrontation against demonstrators, and especially striking workers.

On Monday, the leader of a strike committee in Soligorsk, where thousands of potash miners have been on strike since August 11, was arrested. Two members of the opposition’s Coordination Council, including Olga Kovalkova, the representative of opposition leader Svetlana Tikhanovskaya, were also arrested on Monday morning by police while they were trying to talk to striking workers at the Minsk Tractor Factory.

Above all, the regime has escalated its crackdown on striking workers, who have been threatened with layoffs, and have been paid no wages. On Monday, Lukashenko declared that all state-owned enterprises where strikes are taking place should shut down, and then decide whom they want to hire again.

Lukashenko had earlier also threatened to bring in miners from the Ukrainian Donbass to replace striking miners in Soligorsk. There were reports of Russian workers being driven into Belarus to replace striking workers. While no concrete new numbers of strikes and striking workers have been reported in the press, the website belzabastovka.org indicates that there are still 150 strikes going on in the country.

The German financial newspaper Handelsblatt noted yesterday that the Belarusian economy is on the brink of collapse because of the strike movement. The state-owned companies where workers are on strike, according to the Handelsblatt, accounted for $10 billion out of a GDP of less than $60 billion. Lukashenko’s economic adviser stated that “billions of dollars” had already been lost to the strikes. The Belarusian ruble, the Handelsblatt noted, has been “in free fall” since the beginning of the protests.

There is no question that enormous social and economic discontent, along with opposition to the authoritarian regime in Belarus, are major driving factors behind the ongoing protests and strikes. Workers in Belarus enjoy close to no labor rights. Companies can fire their entire workforces with just seven-days notice, and the vast majority of labor contracts are temporary. The average monthly wage in 2019 was just $500.

This brutal repression and exploitation of the working class has been enabled not only by the state-sanctioned unions, which have implemented a brutal regime of surveillance and terror in workplaces. The so called “independent” unions, which now posture as defenders of the rights of workers, in fact supported the restoration of capitalism, which has created the conditions for the Lukashenko regime to emerge. They now support the pro-EU opposition and have ties to various international union organizations, including the AFL-CIO, which functions as an arm of US imperialism both at home and abroad.

The crackdown by the Lukashenko regime on the strike movement is being facilitated by the right-wing politics of the opposition and the unions. Leading opposition figures are associated with the restoration of capitalism in Belarus and the destruction of the USSR. No less than the Lukashenko regime, they are opponents of the social and democratic rights of the working class, and are, above all, concerned with bringing the strike movement to an end.

While declaring no desire to break ties with Russia, the opposition under Svetlana Tikhanovskaya is oriented toward closer cooperation with the EU and NATO. Several opposition leaders are notorious Belarusian nationalists who seek to end the status of Russian as an official language in the country.

Last week, an extraordinary EU summit called upon the Lukashenko regime to initiate negotiations with the opposition’s Coordination Council. The EU is not recognizing the August 9 elections. This weekend, US Under Secretary of State Stephen Biegun initiated Washington’s first direct discussions with Tikhanovskaya in Lithuania.

Tikhanovskaya later declared that she was “grateful to the US for their support for the Belarusian people.” According to the Russian Gazeta.Ru, this meeting was the first official contact between the State Department and the opposition leader since the mass protests in Belarus began. Biegun is now traveling on to Moscow and Kiev to discuss the crisis in Belarus with the Russian and Ukrainian governments.

Last Thursday, another opposition leader, Valery Tsepkalo, had stated that he was trying to get the West to recognize Svetlana Tikhanovskaya as the “president” of Belarus. He pointed to Venezuela, where the Trump administration has unsuccessfully been trying to topple the government of Nicolás Maduro through right-wing forces around Juan Guaidó, and said, “such a precedent has been created and it’s, in principle, possible to do the same thing [in Belarus].”

Amid ongoing negotiations with the EU and the US, the opposition has been thrown into a profound crisis by the escalating strikes and protests. Even as she is calling for new elections and insisting on negotiations with the Lukashenko regime, and after weeks in which the opposition declared her the winner of the last election, Tikhanovskaya herself declared this weekend that neither she nor her husband, a jailed opposition blogger, would run in a new presidential election. The opposition has yet to nominate a presidential candidate.

In response to the ever more open backing by the EU and NATO for the opposition, the Kremlin has moved closer to supporting Lukashenko, and especially his repression of the strike movement. The Kremlin has refused so far to enter into negotiations with the opposition’s Coordination Council and has denounced the interference of “foreign powers” in the Belarus crisis.

The strike movement in Belarus has demonstrated the enormous social and political power of the working class. However, workers are faced with an extraordinarily dangerous situation. A way forward can only be found through a complete break with all factions of the capitalist class and the trade unions, and a turn to socialist and internationalist politics on the basis of the lessons of the struggle by the Trotskyist movement against Stalinism.

Despite COVID-19, French billionaires have tripled their wealth since 2010

Kumaran Ira

While the COVID-19 pandemic threatens millions of lives worldwide, the super-rich are profiting from the pandemic to boost their fortunes, as governments shower the corporate and financial elite with billions of euros in bailouts. This is the case not only in the United States, but internationally.

French financial magazine Challenges has published its yearly ranking of the 500 largest fortunes in France. According to the 2020 edition, the collective wealth of France’s 500 wealthiest families has exploded despite the pandemic: “Despite the economic crisis caused by the confinement, the 500 greatest fortunes has not collapsed.”

It continued, “In 2020, the collective wealth of the 500 top fortunes in the ranking was €731 billion, compared to €211 billion in 2010.” This is approximately 30 percent of France’s Gross Domestic Product (GDP), compared to 10 percent in 2010. While there has been a threefold increase in their wealth over the last decade, there has been a ten-fold increase since 1996. France has 95 billionaires today, compared to 40 a decade ago.

The disgusting self-enrichment of the financial aristocracy exposes the French government’s claims it has no money for social spending and to stop mass sackings being prepared amid the pandemic. The accumulation of such obscene fortunes is due to the policies of successive governments since the Stalinist regime’s dissolution of the Soviet Union in 1991 and the 2008 Wall Street crash. They are implementing austerity policies designed to destroy social rights established after the Liberation from the Nazi occupation, to further enrich the wealthy.

Since the beginning of the pandemic, French officials have refused to significantly boost health spending and even mocked COVID-19 as a “little flu.” The state thus not only endangered health workers, who were denied necessary supplies and even face masks. The pandemic has caused over 30,000 deaths in France and 810,000 worldwide. At the same time, European governments were pouring over €2 trillion in bailouts into the banks and major corporations, further enriching this corrupt financial aristocracy.

Among the billionaires, Bernard Arnault, the head of the LVMH luxury fashion conglomerate, is still the wealthiest individual in France and across Europe. For the first time, his wealth has gone above €100 billion (a 13 percent increase since 2019). He is the third-wealthiest man in the world after Jeff Bezos (Amazon) and Bill Gates (Microsoft). From 2008 to 2019, Arnault increased his fortune from €18 billion to €100 billion.

The Arnault family, which initially ran a regional construction firm in northern France, built its fortune by manipulating state subsidies to restructure and shut down textile plants. It finally acquired LVMH in the 1980s, leaving in its wake a trail of shuttered factories and devastated cities. Northern France has since become an electoral base of the neo-fascist National Front.

The five largest fortunes in France are based primarily on luxury, fashion and cosmetics. After France’s wealthiest man, there are the Dumas family that owns the Hermès luxury group (€55 billion), the Wertheimer brothers who own the Chanel luxury group (€53 billion), and Françoise Bettencourt-Meyers, who owns much of L’Oréal (€51 billion). Fifth place goes to François Pinault and his family, which owns the Kering luxury conglomerate (€32 billion).

In sixth and seventh place, one finds big retail and defense contractors: Gérard Mulliez for the Auchan supermarket chain, and Laurent, Olivier, Marie-Hélène and Thierry Dassault of the Dassault military and aerospace empire (€23.5 billion).

These billionaires have profited massively from tax cuts and state subsidies handed to them over a period of decades. The fact that France’s five largest fortunes rely on luxury underscores how the ruling class builds its fortunes on social inequality and neglects industry and production.

Such concentration of wealth at the top of society is an unprecedented phenomenon, which the pandemic has not stopped. According to the Guardian, “more than three-quarters of the world’s wealthiest people have already reported a substantial increase in their family fortune this year.” Jeff Bezos, the founder of Amazon, saw his fortune skyrocket by $75 billion this year to reach the record figure of $189 billion.

Even before the drastic impact of COVID-19, a substantial proportion of the world’s population lived in poverty. In its report published last October, European statistics agency Eurostat wrote that “in 2018, 109.2 million people, that is 21.7 percent of the population in the European Union (EU) was living at risk of poverty or social exclusion.”

The French National Statistics Institute (INSEE) reported at that time that in France 14.7 percent of the population—that is over 9 million people—were living under the poverty line. In 2019, the number of beneficiaries of minimum welfare payments (RSA) increased, with 1.84 million households receiving this benefit. A couple has to live on €847 monthly with this benefit, and an individual €567 per month.

In October 2019, sociologist Louis Maurin told the daily Le Parisien: “We are in a sort of stagnation, with already very weak growth, which always leaves behind a portion of the population that is already economically weakened. Public policy is not directed towards the poorest individuals. By spending €7 billion, we would lift 5 million people out of poverty, whereas in reality we are giving €30 billion in tax handouts to the wealthy. Our employment policy is not coherent, either. Without accusing anyone of anything, our job-creation policy has no ambition.”

Now, the super-rich are seeing their fortunes subsidized by bailouts including a €1.25 trillion European Central Bank “quantitative easing” plan, and hundreds of billions spent in national and EU bailouts across Europe. This only further underscores the completely parasitic character of their wealth. Like the feudal aristocracy before the 1789 French revolution, they live by plundering the public purse and demanding with limitless arrogance that the state impoverish the people.

Coronavirus reproduction rate rises above 1 in UK, as infection cases surge

Robert Stevens

Coronavirus in Britain is spreading exponentially due to the reckless, homicidal reopening of the economy and schools by the Johnson government.

The R or R0 value (Reproduction rate) of COVID-19 is now at 1 or above nationally, meaning that every one person infected is infecting at least one other person.

Last Friday, the government’s scientific advisory group (SAGE) announced that R had risen to between 0.9 and 1.1 in the UK as a whole for the first time since weekly reporting of data began in May. This was an increase on an estimated range of 0.8-1.0 last week and a rate of 0.8-0.9 documented by SAGE two weeks ago.

Because the information used to calculate the R and growth rate includes epidemiological data such as hospital admissions, ICU admissions and deaths, SAGE’s estimates reflect the situation as it was up to three weeks ago. Subsequent changes in transmission levels—set to rocket with millions of children being back to school, along with hundreds of thousands of teachers and other education staff—are not yet fully reflected in the estimates.

Of the UK’s most populated area, SAGE announced it “does not have confidence that R is currently below 1 in England.” In London, SAGE calculates the R rate at 0.9-1.1. The rate is even higher in some parts of the UK, with Northern Ireland’s (population over 1.8 million) estimated to be as high as 1.6.

Between July 4 and August 15, virtually all remaining lockdown measures were ended nationally.

This criminal policy was enacted under conditions in which a large swathe of northern England was forced to go into a “local lockdown” at the end of July—impacting around 5 million people. This was after the entire city of Leicester had already been placed in lockdown for weeks.

Due to the rapid growth in infection rates over the weekend, the government was forced to impose further lockdown measures in Oldham and parts of Blackburn and Pendle in the north west of England. Last Friday, the east Midlands town of Northampton was named an “area of intervention” as a major sandwich producer, Greencore, was forced to close its factory in the town with nearly 300 workers infected. Northampton is one of 19 such areas of intervention, including major population centres like Leicester, Bradford and Manchester.

Even more significantly, Birmingham—the second largest city in the UK with a population of more than 1 million—was last Friday added to the government’s “watch list.” Its weekly rate of infections shot up by 27 percent, meaning it could be placed under lockdown imminently. The city’s infection rate is now at 30 cases per 100,000, the highest level since mid-June. This was up from up from 22.4 the week before and a substantial increase on the 12 per 100,000 recorded at the start of August.

Birmingham is now classified as requiring “enhanced support,” as is Luton (population over 211,000). Another seven towns and cities are listed as “areas of concern.”

Saturday’s 1,288 infections recorded nationally was the highest daily number in two months. In the last week to Monday, 4,364 new infections were recorded nationally, with the official death toll at 41,433.

In Scotland, Saturday’s 123 new cases were the highest daily total in three months. Nearly 80 were recorded in Tayside. Many of Tayside’s cases are centred on the Coupar Angus chicken processing plant, where at least 68 infections have been recorded (59 employees and 9 of their contacts).

Nicola Sturgeon’s Scottish National Party government reopened all schools on August 11, and its devastating impact is already manifest, with infections in nearly 30 schools. On Monday, it emerged that 21 staff and 2 pupils at Kingspark special school in Dundee—also in Tayside—have contracted COVID-19. Four of their contacts in the community were infected. The school was forced to close last Wednesday, just eight days after reopening.

Nothing is being allowed to intrude on the ruling elite’s maniacal rush to enforce its back to work agenda, with the damning R value data issued by SAGE totally ignored by the government. This is despite Johnson and his key scientific and medical advisors repeatedly claiming, for months, that its actions would be determined by the R value—which it insisted had to be kept below 1 at all costs.

At the start of lockdown, the R rate was between 2.4—as estimated by Imperial College London’s COVID-19 Response Team—and 4, according to other research.

The lockdown imposed on March 23 reduced R significantly within days and by at least two thirds in a matter of weeks.

Speaking at a Downing Street conference on March 30, just seven days after lockdown, Johnson’s Chief Scientific Officer, Sir Patrick Vallance, said, “Britain’s lockdown is having a very big effect on the R0, bringing it down to below one.”

Britain's prime Minister Boris Johnson, centre, Chief Medical Officer for England Chris Whitty, left, and Chief Scientific Adviser Patrick Vallance speak at a press conference at Downing Street on March 3, 2020. (AP Photo/Frank Augstein, Pool)

On April 16, the government introduced five tests that had to be met before the national lockdown could be ended. The third test was centred on lowering the R value, with Downing Street insisting it would count on “Reliable data [the R value] showing the rate of infection was decreasing to ‘manageable levels.’”

At the April 30 press conference, asked what the R rate should be, Chief Scientific Adviser Sir Chris Whitty said, “There isn’t a perfect answer to what should the R be [to lift the lockdown] but we’re absolutely confident that the wrong answer is anything over one.

“Because as soon as R goes over one, then you restart exponential growth— it may be slow if it is just over one, it may be a lot faster if it goes a lot above one—but exponential growth restarts and, sooner or later—and the higher it is, the sooner it is—the NHS [National Health Service] will go back to the risk of being overwhelmed and the number of cases will go up.”

At the same event, Johnson—in his first public event since almost dying after being struck down with COVID-19—stated, “the government will be monitoring R very carefully. It will be a key factor in how social distancing measures will be used in the future,” adding, “Let me just emphasise that keeping the R down is going to be absolutely vital to our recovery, keeping the reproduction rate of the disease down. …”

On May 11, Johnson announced that “in order to monitor our progress, we are establishing a new COVID Alert Level System. The COVID Alert Level has five levels, each relating to the level of threat posed by the virus.” Yet again the R rate was cited as all-important. “The [Alert] level will be primarily determined by the R value and the number of coronavirus cases.”

On May 28, as a result of lockdown, the R rate was estimated to be between 0.7 and 0.9. Vallance told a press conference in Number 10, “We need to keep concentrating on R below one, that means making sure that the measures that are in place are adhered to and that we all stick to them to make sure that the right thing is done and that we end up in a position where we can get the numbers down and the R down a bit. But we are at a fragile state.”

But the over-riding goal of the government, while cynically citing the importance of lowering the rate of infection, was always to reopen the economy and force millions back to work—in order to restart the production of profits for the corporations and super-rich. Johnson said at the May 28 event, “When we are sure that this first phase is over and that we are meeting our five tests…then that will be the time to move on to the second phase in which we continue to suppress the disease and keep the reproduction rate—the R rate—down, but begin gradually to refine the economic and social restrictions and one-by-one to fire up the engines of this vast UK economy.”

As is now clear in the resurgence of coronavirus everywhere, preventing its spread is incompatible with the murderous agenda of flinging open the economy and reopening schools.

At the April 30 press conference, asked what would be a manageable R rate to control the spread of the pandemic, Johnson replied, “The crucial thing is to stop the overall national R from going over 1 again because as Chris [Whitty] and Patrick [Vallance] have explained, that’s the moment that you get the risk of another exponential curve upwards.” (emphasis added)

With R above 1, this point has already been reached even as the health and safety of the population are set to be further imperilled—with schools throughout Northern Ireland reopening yesterday and set to reopen in England from September.

That the R rate is not significantly higher is only due to the fact that millions are ignoring the government’s advice to carry on as normal, with many still shopping online, refusing to go to pubs and bars, and working from home rather than going to unsafe workplaces.

US stages military buildup to enforce deal to steal Syria’s oil

Bill Van Auken

The US military over the past week has been sending convoys across the border from Iraq into Syria in what appears to be a significant escalation of the US military intervention in the war-ravaged country.

According to sources in Syria, the convoys have come across at the al-Tanf crossing, where the US military maintains a garrison near the triple frontier between Iraq, Syria and Jordan. They have then traveled to US bases in the northeastern Syrian governorates of Deir ez-Zor and Al-Hasakah. Witnesses said that the convoys included tanks, armored vehicles, oil tankers and trucks bearing weapons and logistical equipment.

The buildup of the US forces east of the Euphrates River follows the revelation that Washington has concocted a deal with a newly minted American oil company, Delta Crescent Energy LLC, which has been signed by the so-called Syrian Democratic Forces, the proxy ground troops employed by Washington in Syria, which consist mainly of the Syrian Kurdish YPG militia.

Among the equipment being trucked in by the US military are believed to be components for two modular refineries to assist the company in exploiting and marketing Syrian oil.

This agreement constitutes a war crime under the Geneva Conventions, which bar the exploitation of the natural resources of an occupied country for the benefit of the occupier. In the case of the US occupation of Syria, this constitutes an even more blatant act of international piracy, as the US military presence in the country has been authorized neither by the Syrian government nor the United Nations.

The existence of the deal brokered by Washington between Delta Crescent Energy and the Pentagon’s Kurdish proxies was first revealed by Republican Senator Lindsey Graham during a July 30 Senate Foreign Relations Committee.

Graham told US Secretary of State Mike Pompeo that he had been informed by the commander of the Syrian Kurdish forces, known as Mazlum Kobani, of the deal to “modernize the oil fields in northeastern Syria”, and asked whether the Trump administration was supporting it.

“We are,” Pompeo replied. “The deal took a little longer than we had hoped, and now we're in implementation; it could be very powerful.”

It has since emerged that the principals in Delta Crescent Energy include James Cain, a North Carolina Republican Party official and former US ambassador to Denmark who gained brief notoriety by calling for the execution of Chelsea Manning, the courageous US soldier who was imprisoned for her role in exposing US war crimes in Afghanistan and Iraq by leaking to WikiLeaks hundreds of thousands of military war logs and diplomatic cables. Also on the company’s board is James Reese, a former Delta Force officer who became a private security consultant and Fox News contributor after retiring from the military.

There is every reason to suspect that the company was formed as an act of political cronyism. The deal was reportedly “negotiated” under the auspices of the chief of the US Central Command (CENTCOM), Gen. Kenneth McKenzie, while US military is facilitating its implementation.

As for Pompeo’s claim that this agreement could prove “powerful,” it certainly is not a matter of its global economic significance, given that Syria accounts for just 0.1 percent of the world's oil reserves. Rather, the deal serves as a means of starving the Syrian government and people of resources that are desperately needed for reconstruction after nearly a decade of war, while simultaneously providing a pretext for the continued US military occupation and dismemberment of the country.

The deal is the outcome of the shift in US tactics initiated by Trump in October of last year, when he provided a green light for a Turkish invasion of northeast Syria for the purpose of driving Washington’s erstwhile Kurdish allies from the border. At the time, Trump spouted a great deal of demagogy about ending Washington’s “forever wars” and pulling all US troops out of Syria.

Facing a firestorm of criticism from within the US military and intelligence apparatus, Trump backed down, announcing that he would retain a US force in Syria to “keep the oil.”

At the time he stated, “We’ll work something out with the Kurds so that they have some money, so that they have some cash flow. Maybe we’ll get one of our big oil companies to go in and do it properly.”

The announcement of the oil deal provoked bitter criticism from the Syrian government. Syria’s Ambassador to the United Nations Bashar Ja’afari spoke before the Security Council last week, denouncing Washington for “stealing Syrian oil and depriving the Syrian state and Syrian people of the basic revenues necessary to improve the humanitarian situation, provide for livelihood needs and reconstruction.” He also charged both the US and the European Union with enforcing a sanctions regime that serves to “prevent the Syrians from obtaining their basic needs of food, medicine and medical equipment, especially in light of the spread of the corona pandemic and its dire effects.”

The principal allies of the Damascus government of President Bashar al-Assad, Iran and Russia, also denounced the US oil deal as a violation of Syria’s national sovereignty. Also condemning the agreement was the government of Turkey, which is continuing its own occupation and de facto annexation of Syrian territory.

The government of President Recep Tayyip Erdoğan issued a statement hypocritically denouncing Washington for “disregarding international law, violating territorial integrity, unity and sovereignty of Syria,” while going on to charge that the oil deal amounted to “financing terrorism.” Ankara regards the Syrian Kurdish YPG as a branch of the PKK (Kurdistan Workers’ Party) Kurdish separatist movement inside Turkey, which is designated by both the US and Turkey as a “terrorist” organization. The Erdogan government regards the consolidation of any Kurdish-controlled entity near its border with Syria as a threat to Turkish national security.

The oil deal has ratcheted up dangerous tensions in northeastern Syria, where US, Russian, Turkish, Syrian government and Kurdish YPG forces, along with remnants of the Islamic State (ISIS) militia, are all operating in close proximity.

Last week, on the same day, August 18, a US base near Syria’s Conoco oil field in Deir ez-Zor—now under the control of the American military and its Kurdish proxies—came under rocket attack for the first time, and a Russian major general was killed by an improvised explosive device.

The Pentagon blamed the rocket attack on Iran and Iranian-aligned militias, while the killing of the senior Russian officer was initially blamed on ISIS. There is no proof that either is the case, and there is reportedly substantial speculation that the killing of the Russian general may have been the work of Washington and its Kurdish proxies.

A day earlier, on August 17, a US convoy engaged in a firefight with Syrian government forces at a checkpoint in al-Hasakah, leaving one Syrian soldier dead and two others wounded. US and Syrian accounts of the incident were at odds, with the Pentagon claiming that the convoy came under attack from unknown elements after passing through the checkpoint, and the Syrian government reporting that the shooting began when the Syrians tried to stop the convoy. Apache helicopters were escorting the US armored vehicles.

US military officials have reported that encounters between US and Russian soldiers are virtually a daily occurrence. For its part, Russia has built up its forces in the region, strengthening its base at the Qamishli airport on the Turkish border and bringing in attack helicopters. Meanwhile, Russia has deployed some two dozen tanks and armored vehicles to the village of Mazloum, little more than a mile from a US base.

US imperialism has been at war in Syria since launching a regime change operation in 2011, using CIA-backed Islamist militias as its proxies in a bid to topple the Assad government and impose a US puppet government in Damascus. It subsequently launched a direct military intervention in Syria as well as Iraq on the pretext of combating ISIS, an offshoot of the very Islamist militias that it had previously armed and funded. The toll of these interventions numbers in the hundreds of thousands of dead and millions of displaced.

Now the US remains in Syria for the purpose of controlling and exploiting the country’s oil, as part of a broader military campaign to impose a neo-colonial US hegemony in the Middle East at the expense of Iran, and the countries the Pentagon defines as “great power” rivals, China and Russia.

These aims, combined with the profound political instability driven by the economic and social crisis within the United States itself, pose a growing danger that the heightened military frictions in Syria can metastasize into a broader war, drawing in regional and major powers alike.

Thai protest movement spreads across country’s northeast

Owen Howell

Thailand’s student-led protest movement shows no signs of diminishing, as major rallies erupted over the past few days in the northeastern region of Isan. For more than a month now, large anti-government protests have been held almost daily.

Last week’s police operation, in which seven student leaders were arrested on charges including sedition, has done little to intimidate or stifle the growing movement.

On Thursday, a protest in the northeastern city of Khon Kaen was organised by a local student group called Khon Kaen’s Had Enough. Around 1,000 people, mostly high school students, gathered at the Chao Por Lak Muang Shrine, where numerous students were invited on stage to deliver speeches.

The protest’s organisers also performed a Buddhist ritual, intended to chase Prime Minister Prayut Chan-o-cha out of power. A main road was closed for the event, which drew a much larger crowd than anticipated.

Nakhon Ratchasima protest on Thursday, Credit: @arthemmarach (Twitter)

Siwakorn Namnuad, a leader of Khon Kaen’s Had Enough, told Khaosod reporters that Thursday was the first large-scale protest in the city centre. He noted the crowd’s enthusiastic response to the three demands of the protest movement: to dissolve parliament, end intimidation of political opponents, and rewrite the constitution.

“If our demands are not met, we will increase the scale of our operations. Students are ready to call for change; we are waiting for working age people to join us,” Siwakorn said. Opposition in Thailand’s rural north and northeast to Prayut’s military-controlled government has meant that the movement is expanding beyond high schools and universities in the region.

Another large demonstration was held on Thursday at the Yo Ma Monument in the city of Nakhon Ratchasima. As in Khon Kaen, the crowd was estimated at over 1,000, while the stage was dominated by high school pupils.

Speakers denounced the 250 senators in office, all of them appointed by the military junta that assumed power in 2014, under Prayut’s leadership. They also made special appeals for the resignation of Deputy Prime Minister Prawit Wongsuwan, widely despised for his critical role in the military coup and involvement in a 2018 corruption scandal.

Khon Kaen was the location for another rally on Saturday, arranged by student organisations from nine provinces under the name of the Isan Liberation Network. At the same time, a protest in Ubon Ratchathani was notable for the appearance of Parit Chirawak, a central leader of the Free Youth movement that has orchestrated the Thai protests.

In the north, a significant student rally within the grounds of Chiang Mai University was held by student group Community of MorChor. Attendance was so much greater than expected that the venue overflowed with students, and barriers had to be dismantled to accommodate members of the public drawn to the event. Police officers were reportedly scattered through the crowd taking pictures of the organisers.

According to Prachatai, student representatives on stage read out a list of Chiang Mai University students who had been killed during the bloody Thammasat University massacre in 1976. They also read the names of members of the Farmers’ Federation of Thailand (FFT), involved in the peasant revolts of the 1970s, who died in the massacre.

One student leader called on the Red Shirts movement to participate more openly in upcoming protests. The Red Shirts, supporters of former Prime Minister Thaksin Shinawatra, staged mass demonstrations in Bangkok in 2010, and were largely based in the north and northeast.

Anti-government activity in Bangkok, meanwhile, has continued since the August 16 rally, which drew tens of thousands of people and was the largest demonstration since the 2014 coup.

Around 400 high school students from across the capital besieged the Ministry of Education on Wednesday, showing the three-fingered salute in solidarity with the protests. When Education Minister Nataphol Teepsuwan and his aides appeared outside, the students treated them with contempt, jeering loudly and making thumbs-down gestures and then ordered them to the back of the crowd.

Some students blew whistles as he tried speaking to them, a disruptive tactic notoriously used in the 2014 protests that helped trigger the military coup, in which Nataphol himself had played a role.

Students from Rajini School, a private girls’ school in Bangkok, yesterday wore white ribbons (a symbol of the protests), even after the school’s administration banned all forms of political expression on campus. A group of nearly 1,000 alumnae have signed an open letter to protest the ban.

On Sunday, students from four major Bangkok universities—Kasetsart, Silpakorn, Bangkok, and Rangsit—assembled on Sunday at the Lan Khon Meaung Square in Phra Nakhon district.

Nakhon Ratchasima protest on Thursday, Credit: @arthemmarach (Twitter)

They were campaigning against the state persecution of political activists, in particular those condemned under the country’s draconian lèse majesté law, which criminalises any alleged criticism of the Thai monarchy. The student leaders announced that they would gather more often every time the government used the law to arrest protesters.

The response of Prayut’s government to the protest movement changed markedly after a rally on August 3, when student leaders added to the three initial demands a call to reform the monarchy.

King Vajiralongkorn’s ties with the military-backed government, along with his personal possession of crown assets, has provoked hostility throughout the population. This was demonstrated in the outrage on social media when Thanathorn Juangroongruangkit, leader of the disbanded Future Forward Party, exposed a steep rise in the annual budget for Palace agencies over the last three years.

The amount was pegged at $US285 million for the next fiscal year—up 16.8 percent from last year, compared to a 3.1 percent rise in the overall national budget, Nation Thailand reported.

After the seven arrests last week, protest leader and vocal critic of the monarchy Panupong Jaadnok was arrested yesterday on sedition charges related to his participation in the August 10 rally, where a manifesto of 10 demands for monarchy reform was declared. Yesterday evening, he was transported to a police station in Pathum Thani, where Parit Chirawak said a protest would be held in his defence.

Two organisers of a student rally in the northern city of Lamphun have been ordered to report to police and hear charges against them. One of the students, Thanatorn Vitayabenjang, said in an interview with Al Jazeera: “There’s been many cases where [police] tried to report protesters, but at the end of the day, after everyone is over that fear, it becomes a catalyst to come out more and go against the government.”

Many more protests are planned for the coming weeks. In Nakhon Ratchasima, protesters announced that a major student rally would take place on September 19 at Thammasat University’s main Tha Prachan campus in Bangkok. Free Youth has not yet revealed details, but stated its plans to camp out overnight, in what could be a massive rally of students and broader sections of society.

The Bangkok Post reported that security agencies were fearful of the upcoming protests. A meeting between Prime Minister Prayut and high-ranking military generals was held on Friday, in which preparations for possible mass upheavals were discussed.

Never Again: 75 years After Hiroshima and Nagasaki

Manpreet Sethi

This August marks 75 years of the dropping of Little Boy and Fat Man on Hiroshima and Nagasaki. These were the first two nuclear bombs built by the US in the secret Manhattan Project; run at a frenzied pace to beat the possibility of Germany getting to the weapon before the Allied powers. Within minutes of the nuclear attack, a bustling city turned into a wasteland, as nearly 60,000-80,000 people vaporised immediately. None had seen such death and destruction being caused by just one bomb.

At 75 years of age now, nuclear weapons and the era of nuclear deterrence they heralded are going strong, immune to all efforts at dislodging them. Just as we have been asked to learn to live with COVID-19, we have long learned to live in a balance of terror with these weapons. But it has always been a delicate balance, and has become more so in the past few years.

Today, there are nine nuclear-armed states, each engaged in a process of strategic modernisation to hone a capability to which they attach great value. Consequently, the state of the global nuclear order is far more complex and full of risks. What kinds of risks are these? What are the factors exacerbating them? What can be done to address them?

Kinds of Nuclear Risks

Two kinds of risks have preoccupied the imagination ever since nuclear weapons entered inter-state equations: proliferation and use. Interestingly, the possibility of uncontrolled horizontal nuclear proliferation was perceived to be at its lowest just about a decade ago. It was widely believed that owing to a well-crafted non-proliferation regime comprising multilateral treaties, export control arrangements, norms of behaviour, etc, the world had overcome the nth country problem. With NPT membership being nearly universal except for four nuclear-armed states outside of it, the norm of nuclear non-proliferation was believed to be robust.

20 years on, however, fears of more countries harbouring the desire for nuclear weapons has surfaced. In Northeast Asia, incipient debates in favour of acquiring nuclear weapons are being heard. In South Korea and Japan, they have emerged in response to DPRK's nuclear programme and difficult relations with China. The US nuclear umbrella, supposed to keep its allies non-nuclear, has been affected by President Trump’s approach towards alliances.

In West Asia, with the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA), Iran is back in the reckoning as a proliferation possibility. Saudi Arabia has indicated its intention to go nuclear in case Iran moves in that direction. Recent reports about Chinese enrichment help to Saudi Arabia are worrisome. The UAE, Egypt, and Turkey could also display a similar interest in nuclear weapons. The issue of nuclear proliferation is once again a live challenge to the global nuclear order.

The second palpable nuclear risk is that of the use of the weapon. This could happen in three ways, though the chances of each possibility vary. First, it could happen through a pre-meditated or deliberate decision to use. The possibility of such an eventuality is low, however, because every adversarial nuclear relationship confronts a secure second-strike capability in the other. So the prospect of assured retaliation is likely to keep deterrence in place.

Second, nuclear use could take place through an accident caused by malfunctioning command and control (C2) systems. But, this eventuality too is relatively low given that states take great care in building positive and negative controls in their C2. The highest probability is in the third scenario, that of inadvertent escalation as a result of miscalculation or misperception. The risk of stumbling into a nuclear war that no one wanted or anticipated is the highest.

Factors Exacerbating Nuclear Risks

A slew of current political, technological, and doctrinal factors heighten the chances of nuclear use. High trust deficits between major nuclear-armed states create nuclear dyads that assume the worst of the other, and believe in the utility of hedging. These dyads entangle states in capability build-ups to meet their concepts of credible deterrence.

The collapse of US-Russia arms control arrangements has led to an offence-defence spiral and mutual arms racing, whose implications are being felt in other states as well. China, for instance, responds to these developments in the US and sets into motion a new set of threat perceptions in India. Indian responses, or even a sense of what these will be, leads to actions in Pakistan. A chain conundrum thus complicates the nuclear landscape.

Meanwhile, new technologies like cyber offensives, artificial intelligence (AI), and hypersonics are certain to make states unsure about the credibility of their nuclear deterrence. The fear of a loss of nuclear assets to an adversary’s first strike could move states into accepting more hair trigger postures. The attendant risks can well be imagined.

At the doctrinal level, the US and Russia are reviving the concept of fighting ‘limited wars’ with low-yield nuclear weapons. Such a belief system makes the use of the weapon more likely. 'Limited' use of the weapon is peddled for greater credibility, and to signal the ability to control and manage escalation. This, however, is an extremely risky venture with no guarantee of how it would end.

Addressing Risks

Acknowledging the existence of risks is the first step towards finding ways to deal with them. However, none of the nuclear-armed states appear to be in the mood to do so. They could be jolted into this reality in three ways.

One, through the emergence of a situation akin to the Cuban Missile Crisis that brought the US and the USSR to the brink of a nuclear precipice, and to their senses about its existential dangers. Two, the emergence of a wise, statesman-like leader who is able to mobilise political opinion on the issue, much like how former US President Obama managed through the Nuclear Security Summits (NSS) that provided a platform for dialogue on the risk of nuclear terrorism. A similar forum is needed to engage nuclear-armed states on doctrines, force postures, and structures to address misperception, foster habits of engagement, and help create a shared understanding of risks.

The third way is by bringing nuclear risks into public imagination through creative media such as movies, art, and music, etc. This would infuse the knowledge of risks more generally and create momentum for public demands to make such issues a part of inter-state dialogue.

Marking the 75th anniversary of the Hiroshima and Nagasaki bombings must involve an understanding of where the world stands today, to ensure that such a disaster never happens again.