US imposes draconian new sanctions against Iran amid spiraling COVID-19 pandemic

Bill Van Auken

The Trump administration Thursday imposed a draconian new round of economic sanctions against Iran aimed at destroying the country’s economy and forcing through Washington’s policy of regime change by means of the starvation and deprivation of the Iranian population.

Announced by Treasury Secretary Steven Mnuchin, the sanctions target 18 Iranian banks with secondary sanctions, effectively cutting Iran off from the world financial markets. Mnuchin declared that the action “reflects our commitment to stop illicit access to US dollars,” adding that it would “continue to allow for humanitarian transactions to support the Iranian people.”

Tehran, capital of Iran (Photo: wikipedia.org)

This last assertion is a blatant lie. The 18 banks were the last ones not to be slapped with secondary sanctions, which subject any financial institution daring to do business with them to being barred from US markets. The effect is to blacklist the entire Iranian financial sector, crippling the country’s ability to purchase desperately needed food, medicine and medical supplies under conditions in which the COVID-19 pandemic is ravaging the country. The US action makes it virtually impossible for Iran to gain access to tens of billions of dollars in state assets held in overseas banks.

US authorities made no attempt to implicate the banks in any supposedly illicit activities—financing “terrorism,” purchasing arms or involvement in Iran’s nuclear program. Instead, 16 were charged with the “crime” of “operating in Iran’s financial sector,” one was accused of being controlled by a previously sanctioned bank and another with being “military-affiliated.”

The “maximum pressure” sanctions campaign launched by the Trump administration after it unilaterally repudiated the 2015 nuclear accord between Tehran and the great powers two years ago had already crippled much of Iran’s economy, largely preventing it from selling oil, the country’s economic lifeblood. In the 12 months ending in March 2020, Iranian oil sales stood at little more than $20 billion, down from $120 billion in 2011.

Last month, in an act of unbridled arrogance, Washington invoked the “snapback” provisions of the 2015 nuclear accord that the US had itself abrogated, demanding that the United Nations re-impose sanctions that it had lifted in return for Tehran accepting strict limitations on its civilian nuclear program. All four of the other permanent members of the UN Security Council, which are signatories to the deal, rejected Washington’s demand.

The US has particularly demanded the maintenance of a ban on the export of conventional weapons to Iran, which is set to expire on October 18 under the terms of the nuclear deal. While both Russia and China have indicated interest in arms sales to Iran, Washington has vowed to unilaterally enforce the ban, raising the prospect of a confrontation between the world’s major nuclear powers.

Iranian authorities have denounced the new sweeping sanctions against the country’s financial sector. Iran’s foreign minister, Mohammad Javad Zarif, tweeted that the “U.S. regime wants to blow up our remaining channels to pay for food & medicine. Iranians WILL survive this latest of cruelties. But conspiring to starve a population is a crime against humanity.”

Speaking before United Nations General Assembly session on counterterrorism Thursday night, Iran’s UN ambassador, Majid Takht-Ravanchi, accused Washington of “state terrorism and economic and medical terrorism.”

“The policy of maximum pressure by the US on Iran is designed to deliberately and indiscriminately target innocent civilians with the aim of creating suffering and hardship, as well as stoking social unrest in accordance with the flawed policy of regime change,” Takht-Ravanchi said.

The new sanctions have hit precisely at a point in which Iran is confronting a devastating resurgence of COVID-19, being referred to by medical authorities as a “third wave” of the pandemic. Within the last few days, the country has seen record numbers of new cases and daily deaths. On October 9, Iran’s Health Ministry confirmed 4,142 new coronavirus cases, bringing the total number of cases to nearly half a million. Over the previous 24 hours, 210 COVID-19 patients had died, bringing the country’s total death toll to 28,098. Over the past week, at least 1,500 have died.

The sharp increase in COVID-19 cases has overwhelmed Iran’s hospitals, particularly in the capital of Tehran and its suburbs, which have been hardest hit by the pandemic. The doctor who heads the infectious diseases department at Tehran’s Masih Daneshvari Hospital told the state-run news agency IRINN: “Due to the unavailability of beds in intensive care units and even in emergency units, ambulances go from one hospital to another to have patients admitted. Newly-arriving coronavirus patients have to wait for beds to become free.”

The Iranian Armed Forces have announced that they are making all of their medical facilities available to treat COVID-19 patients, while civilian hospitals have ceased all non-emergency functions to make room for those who have fallen ill with the deadly virus.

Schools, which the government recklessly reopened last month, have been closed in Tehran and some other cities, as have mosques, shops, restaurants and other public venues. Initially announced as a one-week lockdown on October 3, the governor on Friday extended it for another week.

Even before the pandemic, the US sanctions regime had deprived the Iranian health care system of essential medicines and medical equipment, leading to many preventable deaths. With the pandemic, the sanctions are taking an ever-greater toll, amounting to a massive war crime against a civilian population.

The sweeping sanctions have sharply escalated tensions between the US and Iran, which are already facing off on a number of fronts. Washington has beefed up its military presence in the region, sending the aircraft carrier USS Nimitz, together with the guided-missile cruisers USS Princeton and USS Philippine Sea and the guided-missile destroyer USS Sterett through the Strait of Hormuz into the Persian Gulf last month. It marked the first such deployment of a carrier strike force in nearly a year.

Meanwhile, in Iraq, the Trump administration’s bully-boy Secretary of State Mike Pompeo has given an ultimatum to the newly installed prime minister, Mustafa al-Kadhimi, that if he fails to crack down on Iraqi Shi’a militias that are aligned with Iran, the US will shut down its embassy in Baghdad. US officials have made it clear that this would be the prelude to wide-ranging US airstrikes against militia positions. Organized in the Popular Mobilization Forces (PMF), these militias are part of the Iraqi armed forces, functioning as a kind of national guard. They played a predominant role in the defeat of the Islamic State of Iraq and Syria (ISIS) after it seized control of a wide swath of Iraq in 2014.

Each of these actions, from the carrier deployment to the threats in Iraq and now the crippling new financial sanctions in the midst of the COVID-19 pandemic has the character of a calculated provocation, designed to escalate tensions. These tensions were already brought to the boiling point last January, with the US drone missile assassination of Lt. Gen. Qassem Suleimani, one of Iran’s most senior officials, after he arrived at Baghdad international airport for an official state visit.

Faced with a rapidly deteriorating political situation at home in the run-up to the November 3 election, there is an evident threat that the Trump administration will deliberately trigger a war with Iran as an “October Surprise,” an event designed to shock the electorate and create more favorable conditions for the execution of the extra-constitutional conspiracies that are being hatched in the White House.

Australian budget based on shaky foundations

Nick Beams

As many commentators have noted, the Australian budget, brought down on Tuesday night, was based on what are termed “heroic” assumptions covering the COVID-19 pandemic, as well as the Australian and global economy.

The clearest example of such assumptions is in relation to the pandemic. According to the budget papers prepared by Treasury, “it is assumed over the forecast period material outbreaks of COVID-19 occur but are largely contained” and that “a population-wide COVID-19 vaccination program is assumed to the fully in place by late 2021.”

Treasurer Josh Frydenberg in conference with the Business Council of Australia. (Credit: @JoshFrydenberg, Twitter)

This brings to mind an old joke about bourgeois economics. A physicist, a chemist and an economist are trapped on an island with cans of food but no implements. The physicist and the chemist develop plans to open them, but the economist develops a “model” to solve the problem by saying, “assume a can opener.”

The Treasury assumption has been made under conditions where the virus continues to spread out of control on a global scale, no vaccine has yet been developed, and considerable uncertainties remain. Even if an effective vaccine is developed, there is no assured plan for its acquisition and distribution.

The assumptions on the economy are equally flimsy. The Treasury forecast is that in calendar year 2020 real GDP in Australia will fall by 3.75 percent, before rising by 4.25 percent in 2021. But this is based on the premise that global growth, after falling by 4.5 percent this year, will bounce back to 5 percent in 2021.

Even the International Monetary Fund (IMF), which generally tries to put the best face on a bad situation—its forecasts for global growth in the years leading up to the pandemic were consistently overstated—is more cautious.

In a recent blog, IMF managing director Kristalina Georgieva warned that there was a “risk of severe economic scarring from job losses, bankruptcies and the disruption of education.” Because of this loss of economic capacity, Georgieva wrote that global output will remain “well below” pre-pandemic forecasts, resulting in falling living standards for almost all countries.

The Treasury is forced to acknowledge that “the extent of any longer-lasting effects from the COVID-19 pandemic, both domestically and globally, are difficult to predict.”

The central feature of the budget was the major handouts to business, with a column in the Australian Financial Review describing the “tsunami of money headed for the corporate sector over the next few years” as “absolutely staggering.”

Investment allowances to major businesses at a cost of $26.7 billion over two years enables them to write off in full any eligible depreciable asset for tax purposes, with no limit. This measure has been touted by the government as a boost to jobs, the central theme of its budget spin, coupled with income tax cuts and subsidies for cheap youth labour.

But the crucial question is whether any such investment, which depends on increased demand in the economy, will actually be made. Even before the pandemic hit, the Australian economy was marked by years of negligible wages growth, stagnant household incomes and the lowest growth in productivity ever recorded. This situation led to the Reserve Bank of Australia cutting its base interest rate to a record low even before the pandemic struck.

The Treasury’s assessment of investment is somewhat at variance with the upbeat scenario presented by Treasurer Josh Frydenberg on Tuesday night.

It noted that new business investment was expected to fall by 9.5 percent in 2020–2021, “driven by a significant deterioration in the outlook for non-mining investment.” Treasury forecast a growth of 6 percent in 2021–22.

It said the “highly uncertain environment” created by the pandemic would see a “sharp decline in machinery and equipment investment in the near term” and a “gradual run-off in non-dwelling construction” as demand for new projects declines and work already in the pipeline is completed.

The upturn in 2021–22 is predicated on the assumption that “easing restrictions, improving confidence and newly introduced government policies to support business will drive the recovery in business investment, particularly in machinery and equipment.” There is round robin at work here. The government bases its actions on Treasury forecasts while those forecasts are in turn based on assumptions about the effects of government action.

But even if the predicted investment were to take place, this would not give rise to an increase in well-paying jobs. This is because one of the main reasons businesses undertake expenditure on new machinery and equipment is to reduce labour costs as they struggle to maintain profits in conditions of falling overall demand. Any increase in jobs will be in part-time and low-paid work aided by government subsidies for cheaper youth labour.

One of the most significant features of the Treasury forecasts is the exclusion of any mention of global financial conditions and the threat of another financial crisis as debt, both corporate and government, reaches new records.

Twice in the past 12 years—during the global financial crisis of 2008 and the freezing of all markets in mid-March this year—the international financial system has come to the point of a total meltdown. The conditions for another disaster are clearly in the making.

In contrast to the real economy, now in the midst of its most severe contraction since the Great Depression of the 1930s, stock markets have been on the rise, led by Wall Street which is now back close to the record highs it reached in February. The market rise has been fueled by government spending, estimated by the IMF to reach a record high of 100 percent of global GDP this year, and by the injection of trillions of dollars into financial markets by the world’s central banks in the past seven months.

As former Liberal leader John Hewson noted in a comment published in the Sydney Morning Herald on Thursday, entitled “Heroic forecasts omit debt crunch,” an inherent weakness of COVID economic strategies is that they “ignore the longer-term consequences of massive monetary expansions by central banks… and fiscal expansions by governments.

“The possibility of a pandemic-induced systemic debt crisis cannot be ruled out—compounded by bubbles in many stock and property markets, all threatening stability in bond and currency markets.”

In fact there has already been a preview of such a crisis in mid-March, when financial markets around the world froze, including in Australia, where the dollar experienced one of the sharpest falls of any international currency. A total collapse was only prevented by the intervention of the US Federal Reserve to act as the backstop for all American financial markets, while providing dollar swaps for major central banks around the world.

The intervention alleviated the immediate crisis, but only by creating the conditions for another meltdown through the provision of essentially free money for the very speculation that led to its eruption.

But all of this ignored in the Treasury assessment. The nearest it comes to even acknowledging the explosive contradiction at the heart of the global capitalist system—the divorce between the rise of financial markets and the depressed underlying real economy—is to point to “the risk that global markets have not fully accounted for the economic consequences of the crisis.”

The California wildfires: A disaster of capitalism and climate change

Rafael Azul & Peter Ross

On Monday, California wildfire activity set a double record; first, it was announced that the August Complex Fire in Coastal California had extended to one million acres; second, the total extent of all California fires this season exceeded 4 million acres.

In all, the 42,000 wildfires in the western United States have consumed 6.7 million acres, most of which is in California and Arizona. The 2020 fire season will extend at least until the end of November.

A firefighter at the North Complex Fire in Plumas National Forest, California, on September 14, 2020. (AP Photo/Noah Berger)

The National Interagency Fire Center warned on August 14 of an “above normal significant fire potential” in 2020 for the US, due to delayed rain in the Southwest, the Pacific Northwest and Canada. Within days of this warning, a wave of thunderstorms ignited the massive August Complex and SCU Lightning Complex fires on August 16, and the LNU Lightning Complex on August 17, which developed into some of the largest fires in California history.

The Los Angeles Times reported this week that the record August Complex—an amalgam of 38 separate fires—is burning in 7 counties in the northwestern part of California, an area home to more than 400,000 people.

The Guardian quoted California Department of Forestry (Cal Fire) spokesperson Scott McLean: “The 4m [million acre] mark is unfathomable. It boggles the mind and takes your breath away.” McLean also pointed out that this figure will grow and that the August Complex, for instance, is less than 60 percent contained. According to California Governor Gavin Newsom, the August Complex alone is larger than all of the recorded fires in California between 1932 and 1999.

The current wave of fires has moved toward heavily populated areas along the Pacific Coast, north of the San Francisco Bay and east of Los Angeles, forcing hundreds of thousands to evacuate.

Three weather events have come together this fire season: wind gusts, record heat and extremely dry conditions, which have caused fires to grow more quickly and spread across larger tracts of land than ever before.

In California, the land area burned annually by wildfires is now about eight times greater than in the 1970s. The 4 million acres burned in the state this year are now more than double the previous record of 1.9 million, set in 2018.

A 2006 paper from the University of California Merced, published in Science, found that “the broad-scale increase in wildfire frequency across the western US has been driven primarily by sensitivity of fire regimes to recent changes in climate over a relatively large area.”

A 2016 paper by researchers at the University of Idaho found that the majority of the annual variations in burned area is due to “fuel aridity,” caused by higher temperatures and a decline in summertime humidity, and that “human-caused climate change caused over half of the documented increases in fuel aridity since the 1970s and doubled the cumulative forest fire area since 1984.”

The catastrophic fires sweeping the western United States are only the latest example of the extreme weather events being brought about by human-induced climate change.

The record-breaking 2019–2020 bushfires in Australia burned some 46 million acres, destroyed 5,600 buildings and killed 34 people. Over 500 million mammals, birds, and reptiles are thought to have died in those fires, with some endangered species likely pushed into extinction. In August, the New South Wales government published the results of an inquiry into the fires which characterized the 2019–2020 fire season as “extremely unusual,” but warned that “it is clear that we should expect fire seasons like 2019–20, or potentially worse, to happen again.”

Across the world, wildfires are currently raging in Angola and the Democratic Republic of the Congo in sub-Saharan Africa, in Borneo in Indonesia, in the southern Pantanal wetlands and in the Amazon River basin in Brazil, and in Argentina’s grasslands. “It’s the end of winter, and it’s been a really, really dry winter,” reported University of Colorado research scientist Virginia Iglesias to the New York Times. “These exceptionally dry conditions in central Argentina, and in many other areas of the country create conditions that are perfect for fires once you have fuel.”

Historically high temperatures this year, combined with reduced snow accumulation, have caused wildfires across Russian Siberia, emitting large amounts of carbon dioxide — as much as Norway emits annually — according to a recent New York Times report. Also released by the global wildfires are clouds of carbon monoxide and aerosol particles harmful to human health.

A paper published in January in Science Advances found that changes to normal climate variability have likely contributed to the severe fires in arctic regions. These “zombie fires,” which can smolder beneath the ice and snow in the winter before reemerging as temperatures rise, are themselves shaping conditions in these regions, and releasing immense amounts of greenhouse gases from the permafrost.

Like the California fires, those elsewhere are also spreading clouds of smoke that are endangering public health.

In August and September, the Air Quality Index for the state capital of Sacramento and surrounding cities showed markedly “unhealthy” regions. Smoke alerts were issued and citizens were advised to refrain from outdoor activities because of the Camp Fire.

Eric Guerra of the Sac Metro Air Quality Management board warned “children and the elderly to stay indoors and also anybody with prior respiratory issues.” Guerra indicated that masks used for the COVID-19 virus are not sufficient protection against the small airborne particles emanating from the fires.

A 2018 study in the Journal of the American Heart Association investigating the 2015 fire season found that wildfire smoke exposure was associated with increased rates of emergency department visits for numerous cardiovascular disease outcomes, including ischemic heart disease, dysrhythmia, heart failure, pulmonary embolism and stroke, especially among those older than 65.

Despite the growing danger of fires, the US federal government’s spending on vegetation management decreased under Republican and Democratic administrations from $240 million in 2001 to $180 million in 2015.

In a 2017 speech, US Secretary of Agriculture Sonny Perdue described the inadequate funding for the US Forest Service’s fire management efforts: “We end up having to hoard all of the money that is intended for fire prevention, because we’re afraid we’re going to need it to actually fight fires. It means we can’t do the prescribed burning, harvesting, or insect control to prevent leaving a fuel load in the forest for future fires to feed on.”

Since then, the Trump Administration has repeatedly cut federal funding for wildfire prevention. Trump’s 2020 budget proposed cutting $948 million from the National Forest Service, and the federal wildfire suppression fund has been cut by almost $600 million since 2019. The Joint Fire Science Program, which funds fire science research, has been systematically cut since the early 2000s, and the Trump Administration has cut its budget by more than half since 2017, with the aim of entirely eliminating the fund.

The Democratic Party, which politically dominates California, Oregon and Washington, has likewise refused to provide sufficient funding for wildfire prevention and mitigation at the state level, and has allowed housing development to increasingly expand into high-risk areas. A 2019 report by the McClatchy Company found that more than 2.7 million Californians live in areas highly vulnerable to wildfires.

The West Coast wildfires are only the latest example of the disastrous implications of climate change, which is making living conditions for the most vulnerable layers of society increasingly unbearable.

A September 2019 report by the UN Food and Agricultural Organization estimated that 821 million people are at risk of starvation as global warming makes agriculture increasingly untenable and that 3.2 billion people reside in areas that will become unlivable as soon as the next decade.

A September 2020 congressional report, “The Urgent Need for Climate Action,” estimated that, in California, “approximately 555,000 premature deaths would be avoided in the state over the next 50 years if warming is kept below 2 degrees [Celsius].” The report also found that limiting warming would “avoid approximately 400,000 emergency room visits and hospitalizations for cardiovascular and respiratory disease,” which would otherwise cost the state some $4.5 trillion.

A 2016 report released by the United Nations Development Program found that a “business-as-usual” approach to climate change that allowed global temperatures to rise by 2.5 degrees Celsius would cost the global economy $33 trillion per year by 2050, which is almost certainly a conservative estimate.

Yet, outside of cosmetic non-binding agreements, there have been no attempts to address this immense environmental crisis. The response of capitalist governments around the world to the threat of climate change demonstrates the indifference of the ruling elite to a crisis which threatens countless millions.

A July report by the International Energy Agency estimated that switching to entirely low-carbon sources of energy would cost the world around $44 trillion between now and 2050, but that this amount would more than be made up for in reduced energy expenses. By way of comparison, a recent paper produced by the RAND Corporation think tank estimated that some $47 trillion in income was lost by the bottom 90% of the American population between 1975 and 2018 as a result of rising inequality. In other words, the extra wealth siphoned from US workers to the American ruling class over the last 45 years would be sufficient for the world to make the transition to clean energy. Instead, this vast social wealth has been used to line the pockets of the country’s 600 or so billionaires.

State of emergency declared in Madrid as COVID-19 resurgence sweeps Europe

Jordan Shilton

As COVID-19’s resurgence sweeps Europe, Spain’s Socialist Party (PSOE)-Podemos government was forced to declare a state of emergency in Madrid Friday. Over 600 cases per 100,000 residents had been recorded in the past seven days, over double the nationwide average of 250 per 100,000 residents.

The day before, a Madrid court had struck down the PSOE-Podemos government’s proposed restrictions on travel and social contacts for over four million of Madrid’s 6.6 million inhabitants. The restrictions, which the government can now enforce after declaring the state of emergency, have no impact on nonessential work and in-person teaching in schools, however. The PSOE-Podemos government’s reckless drive to reopen the economy and schools at all costs has resulted in Spain emerging as currently the worst-impacted country in Western Europe.

A healthcare worker stands near a COVID-19 patient at the University Hospital of Torrejon in Torrejon de Ardoz, Spain, Tuesday, Oct. 6, 2020 [Credit: AP Photo/Manu Fernandez]

As of Friday evening, Spain had recorded over 890,000 infections, and major papers have admitted that Spain’s total losses from the disease are around 50,000. The surge of infections in Madrid is hitting a health care system that has been on the brink of collapse for weeks. As the WSWS previously reported, intensive care units were already running at 90 percent capacity in late September. Expecting a further deterioration of conditions in the hospitals, the Madrid regional government imposed a law this week banning all medical staff from talking to the media.

New daily infections across Europe Friday surpassed the mark of 100,000 for the second day running. Europe saw 102,357 new COVID-19 cases on Thursday and 110,051 on Friday, according to Worldometers. Since Tuesday, daily deaths across Europe have hovered around the 1,000 mark.

Europe is re-emerging as a major centre of the pandemic. Europe recorded 460,000 COVID-19 cases last week, compared to 380,000 for North America and South America, according to Britain’s Daily Telegraph.

Alongside Spain, France is witnessing the most rapid rise in new infections. Over 18,000 cases are being reported each day, and hospital wards are filling up with COVID-19 patients. The maximum alert level was decreed in Lille, Lyon, Grenoble, and Saint Étienne, after being decreed in Paris, Marseille and Aix. This entails the closure of bars and indoor sports venues, while restaurants are allowed to remain open under tighter restrictions.

However, the government of investment banker Emmanuel Macron has explicitly ruled out adopting a second lockdown, regardless of the toll in deaths. Health Minister Olivier Véran became the latest official to denounce calls for a lockdown to curb infections, and positively encouraged French residents to go on holiday within the country. Noting that the virus has now spread across all of France, he cynically remarked, “Travel from one zone to the other would not therefore bring the virus to a location where it is not already present today.”

Macron’s homicidal response to the pandemic, which is aimed at protecting the profits of big business and has pushed the death toll above 30,000, is provoking growing popular anger. A recent poll found that 61 percent of respondents were dissatisfied with the government’s handling of the pandemic; 72 percent said they would support a second lockdown to contain the virus.

Germany, long held up as one of the countries that coped best with the pandemic due to its comparatively low number of infections, also saw a dramatic spike in cases in the past week. The Robert Koch Institute, Germany’s main public health agency, reported 4,058 new infections over the previous 24 hours on Thursday morning. This was more than 1,200 higher than the 2,828 reported on Wednesday, which at the time was the highest daily increase since April. Friday saw yet another increase, with 4,516 new infections reported.

The virus is running rampant in large cities in particular, where workers live in close quarters and cannot avoid extensive social contact due to the ruling elite’s reckless reopening of the economy. Berlin, Frankfurt and Bremen have all surpassed 50 infections per 100,000 inhabitants over the past seven days—a level beyond which public health officials recommend adopting strict containment measures to prevent an exponential growth of infections.

But Germany’s political establishment, from Chancellor Angela Merkel’s right-wing Christian Democrats to the Left Party, is doubling down on its criminal drive to keep the economy and schools open.

After a video conference Friday with mayors from Germany’s 11 largest cities, Merkel sought to blame the population at large for the spread of the virus. She demanded that cities restrict private gatherings and ban alcohol in public places if more than 50 infections per 100,000 residents are recorded within seven days. Absolutely no restrictions were unveiled for the operations of big business or in schools, however, which are rapidly emerging as hot spots for new outbreaks.

Merkel said her top priority was not “to restrict economic and social life as earlier in the year.” Governments at all levels have agreed to let the virus rip through workplaces and schools so that the major corporations and banks can continue raking in profits and the stock market can keep rising.

In Britain, a study published by Imperial College London Friday estimated that up to 45,000 people are being infected by the virus each day. Even according to official figures which do not even come close to capturing the true scale of infections, due above all to a collapse in testing, close to 14,000 new cases and over 80 deaths were registered Friday. Illustrating the uncontrolled spread of the virus, an Office of National Statistics survey found that an estimated 224,000 people had the virus during the week of 25 September-1 October, compared to 116,000 for the previous week.

Italy, initially the worst-hit country in Europe in February-March, saw an explosive growth in infections this week. It reported over 5,000 new infections Friday, up from 3,600 on Thursday.

Stressing his determination to avert a second lockdown, Prime Minister Giuseppe Conte said masks must be worn in all outdoor public places where social distancing cannot be maintained. Italy’s lockdown during the first wave of the pandemic, when well over 30,000 COVID-19 deaths were recorded in the country, was imposed only after workers launched wildcat strikes in factories nationwide that then spread across Europe.

Across Eastern Europe, COVID-19 is spreading at an alarming rate. After the Czech Republic declared a state of emergency this week, new infections rose above 5,000 Friday. In neighbouring Slovakia, the government called in the military Friday to support overwhelmed health care systems in Slovak cities. Poland (4,700), Ukraine (5,804), and Bulgaria (516) all hit daily infection records.

The devastating resurgence of the pandemic across Europe, which threatens to claim hundreds of thousands of lives over the coming months, confirms the repeated warnings made by the World Socialist Web Site about the criminal drive by ruling elites to prematurely reopen the economy. This policy of deliberately provoking mass death is bound up with the protection of the wealth of the super-rich. It can be halted only by an international struggle led by the working class.

As the European sections of the International Committee of the Fourth International and its sympathising Turkish group noted in its recent statement, “For a general strike to halt the resurgence of COVID-19 in Europe”: “The task now facing the growing mobilization and political radicalization of the working class in Europe is the struggle to seize the resources stolen by the ruling class in years of obscene bailouts, bring down the EU governments, overthrow the capitalist system, and replace the reactionary EU with the United Socialist States of Europe.”

Richest 50 Americans now have as much wealth as bottom 165 million

Gabriel Black

The Federal Reserve released data this week on US household wealth that documents the acceleration of wealth inequality during the COVID-19 pandemic.

A large homeless encampment near downtown St. Louis [Credit: AP Photo/Jeff Roberson]

In the second quarter of 2020, the bottom 50 percent of households—some 165 million people—held $2.08 trillion, or $12,600 per person, while the richest one percent of the population controlled $34.2 trillion, i.e., over $10.4 million per person. In percentile terms, the top one percent of the population held 30.5 percent of all wealth, while the bottom 50 percent controlled only 1.9 percent.

According to a Bloomberg analysis of the data, the richest 50 Americans now have as much wealth as the bottom half of the population. The increased concentration of wealth at the top in the course of 2020 is the result of the unprecedented injection of money into the stock market by the Fed, which has led to an explosive growth in the fortunes of moguls such as Amazon CEO Jeff Bezos, Tesla chief Elon Musk and Facebook CEO Mark Zuckerberg.

The divide in wealth appears even more gigantic when one looks at the top 10 percent of the population as a whole. Combined, the top one percent and next nine percent held 69 percent of the nation’s wealth at the end of the second quarter of 2020, a total of $77.32 trillion.

Between the first and second quarter of 2020, the top one percent of the population increased its share of the country’s wealth from 30 percent to 30.5 percent. The biggest losers were those in the 50 to 90 percentile range of wealth holders, who saw their overall share shrink from 29.7 percent to 29.1 percent. The 90 to 99 percentile and the bottom half remained largely unchanged.

While these changes may appear slight, they actually represent a substantial shift in a short period of time. The top one percent of the population substantially increased its share of the country’s wealth as the Fed effectively printed over $3 trillion and injected it into the financial markets. Better-off sections of workers, who, unlike the bottom half of the working class, have some level of savings, retirement funds or other assets, saw their wealth share decline, as they were forced to draw on savings amidst the global downturn.

One explanation for this sharpening division between, roughly, the top 10 percent of the population and the bottom 90 percent of the population is the disproportionate ownership of stocks and mutual funds. The top one percent of the population owns 52.4 percent of all corporate equities (stocks) and mutual funds, the next nine percent owns 35.8 percent.

Combined, 88.2 percent of the US economy, as represented in corporate equities and mutual funds, is owned by just 10 percent of the population.

While the bottom half of the population has for the last several decades held only one percent of the nation’s stocks, better-off sections of the working class, the 50th to 90th percentiles, held 21.4 percent of this wealth in the early 2000s. However, today this share has fallen to just 11.2 percent. In other words, better-off sections of the working class, less connected to the financial markets, have seen their fortunes move in an opposite direction to those in the top 10 percent of the population.

Another interesting feature of the Fed data is its breakdown by age group. The Millennial group—those born between 1981 and 1996—is today the largest share of the American workforce, accounting for 72 million workers. However, Millennials own just 4.6 percent of US wealth.

In contrast, the data shows that in 1989, when the typical member of the Baby Boomer generation was 34, that generation controlled about 21 percent of wealth.

This contrast between the wealth of Millennials and that of Boomers at similar times in their life cycles reflects the incredible difficulty that young people today face in landing a decent-paying job, paying for college and paying for health care, let alone taking out a mortgage, raising a family and saving for retirement.

The Fed data comes on top of several other recent reports and announcements about social inequality, including:

• A UBS report showing that the world’s billionaires have increased their wealth by over $1.3 trillion, more than 10 percent, in just three years.

• An announcement by the World Bank that the fallout from COVID-19 will push as many as 150 million people into what it classifies as extreme poverty (living on less than $1.90 per day) by 2021. This is the first time the number of people in extreme poverty has increased since 1998.
• A Wall Street Journal report that, using Labor Department data, demonstrated the divergence of fortunes for educated and non-educated workers amid the pandemic. The Journal found that, while those with college degrees have nearly recovered from COVID-19 job losses (which were smaller), high school dropouts still have 18 percent fewer jobs.
• A RAND report that found the bottom 90 percent of Americans would be making 67 percent more without last four decades of deepening inequality.

The ever-growing concentration of wealth at the top of the population weighs like a malignant tumor over society. No social problem, whether it be inequality, global warming, education, health care, retirement or the pandemic, can be solved without mobilizing these vast fortunes at the top and placing them under the democratic control of the broad majority of the population.

The process of extreme class restructuring, and the decimation of the ranks of the better-off, “middle-class” workers depicted in the Fed data, has been underway for at least 40 years. Under Democratic no less than Republican leadership, president after president, Congress after Congress, policies have been carried out that inflated the wealth of the ultra-rich while degrading the conditions of the working class.

This process was sped up by the 2008 financial crisis, in which the Obama administration took measures to gut autoworkers’ pay while funneling trillions of dollars to Wall Street.

Now, a similar but even more drastic social restructuring is underway in response to the COVID-19 pandemic. Millions have been thrown into long-term joblessness and poverty, while $3 trillion have been injected into the financial markets and hundreds of billions of dollars given out to major corporations under the bipartisan CARES Act.

The needs of the working class—the broad majority of the population—stand in direct conflict with the interests of the parasitic financial elite. The major banks and corporations, which control nearly every aspect of global life today, must be placed under the democratic ownership and supervision of the working class so that that the needs of the population can be met.

Trudeau admits US heading for post-election “disturbances,” but won’t condemn Trump

Keith Jones

Canadian Prime Minister Justin Trudeau has been compelled to break his silence on American President Donald Trump’s repeated statements that the only legitimate outcome of the November 3 US presidential election is his re-election and that he will not countenance a peaceful transfer of power, whatever the vote tally.

Canadian Prime Minister Justin Trudeau speaks to reporters from the roof of the Canadian Embassy in Washington [Credit: AP Photo/J. Scott Applewhite]

These statements are Trump’s public call to arms for a coup d’état, already set in motion by the White House and aimed at establishing a presidential dictatorship. Trump is conspiring to overturn his all but certain defeat at the polls by mobilizing sections of the military-police apparatus and his fascist supporters to unleash violence and mayhem, and through intrigues involving the unelected Supreme Court and the anti-democratic Electoral College (see: “Trump’s Operation Dictatorship: What the debate exposed”).

Asked at a media event Thursday about the US political crisis, Trudeau refused to condemn Trump for his flouting of the most basic democratic norms and his lies about the integrity of mailed ballots, let alone for plotting to overthrow American democracy.

“We are certainly all hoping,” said Trudeau “for a smooth transition or a clear result from the election, like many people around the world.

“If it is less clear, there may be some disruptions and we need to be ready for any outcomes. That’s what Canadians would expect of their government, and we’re certainly reflecting on that.”

As in early June, when Trudeau visibly groped for a response when asked about Trump’s attempt to illegally deploy the military against the mass protests over the police murder of George Floyd, Canada’s prime minister went on to say he wouldn’t “comment or weigh in on American political processes.”

Trudeau’s remarks and not for attribution statements by various senior government officials indicate that he, his inner circle, and Canada’s military-intelligence apparatus are fully aware of what is now unfolding in America, and carefully calculating their response based on the two principal concerns of the Canadian ruling class. These are: maintaining Canadian imperialism’s longstanding and ever more pivotal economic and military-security partnership with Washington and Wall Street; and limiting, as best they can, the political crisis in the US from further destabilizing class relations in Canada, which have already been rendered fraught by rampant social inequality, the decades-long assault on public services and worker rights, and now the COVID-19 pandemic.

According to a Reuters’ report, published later Thursday, the Canadian government is in consultations with the principal European imperialist powers, and likely also Japan, about how they will respond to a Trump coup.

“Canada’s foreign ministry,” wrote Reuters, “is gaming out scenarios for the US election and what the implications could be, especially if the aftermath is unpredictable, five sources familiar with the matter said.

“Ottawa,” continued the Reuters report, “is talking to other members of the Group of Seven leading industrialized nations who are working on similar initiatives that plan out responses to various election outcomes, one source said.

“The sources said officials were looking at scenarios ranging from a straightforward win by either Republican President Donald Trump or Democratic opponent Joe Biden to more complicated outcomes where the result is contested or delayed.”

Just hours after Trudeau spoke of his government’s concern about the crisis in the United States, the extent of the coup plot was starkly revealed when news broke of the arrest of over a dozen right-wing militiamen in Michigan on charges of plotting to kidnap and kill Governor Gretchen Whitmer—a frequent target of Trump’s tirades. They also planned to seize the state legislature and violently overthrow the state government.

Trump, subsequently, refused to denounce the conspiracy against Whitmer’s life and the constitutional order, and instead railed against her on Fox News for “complaining” about the plot and implementing COVID-19 restrictions.

In his remarks Thursday, Trudeau, just before speaking about possible post-election “disruptions,” referred to the election outcome’s “potential impact on the Canadian economy.”

The Reuters report similarly cited Ottawa “insiders” concerns about the adverse impact events in the US could have on “highly integrated” Canada-US “supply chains, especially for the auto industry.”

This has been interpreted by the media as a reference to the possible disruption of Canada-US trade due to White House orders to close the border or restrict cross-border commerce, similar to those George W. Bush issued following the Sept. 11, 2001 terrorist attacks. Left unsaid is another even more significant scenario: an explosion of working class opposition to Trump’s coup in the form of mass protests and strikes that could shut down the auto industry and all or much of the US economy.

The Toronto Star also published a report Thursday citing a “senior government source” who “agreed to lay out Ottawa’s contingency planning on the condition the Star withheld their name.”

According to the Star, their source “downplayed” one of the government’s “scenarios”—“that a disputed” election outcome leads “to widespread civil unrest and protests, with Trump refusing to leave office and discrediting the election results.”

The Star report said the government is bracing itself for the next stage of the US political crisis by focusing on reaching out to US “powerbrokers,” just as it did when Trump repudiated the North American Free Trade Agreement, which was ultimately replaced by a more expressly US-led continental trade war bloc. The Trudeau government’s NAFTA response, as the Star article notes, saw Ottawa court leading Congressional representatives and state governors, as well as key figures in Trump’s inner circle, including Jared Kushner, Ivanka Trump, and the fascist ideologue Steve Bannon.

The Reuter’s report suggests that Canada’s US ambassador, Kirsten Hillman, a career civil servant, “is playing a central role” in the current reconnoitring mission.

All of these reports should be viewed critically. Trudeau and his Liberals have very close connections to the Democratic Party, and were on the best of terms with the Obama-Biden administration. As such, the highest levels of Canada’s government are no doubt fully informed as to the Democrats’ response to Trump’s coup plot.

As highlighted by the refusal of Biden’s running mate, Kamala Harris, to answer a question in Wednesday’s vice presidential debate about what the Democrats would do if Trump refused to leave office, the Democrats are desperately seeking to downplay Trump’s coup threat.

It is the growing of social opposition in the working class that is the greatest fear of the Democrats and of the sections of the US financial oligarchy and military-intelligence apparatus for which they speak. They are determined to keep the American political crisis within the corridors of power and aim to thwart Trump’s coup plot, not by an appeal to the American people, but by convincing the military and intelligence agencies that his attempt to overturn the results of the election will provoke mass opposition thereby imperiling bourgeois rule. A Biden-Harris administration, they are arguing, is the “safer, better” bet to uphold US imperialist interests at home and abroad.

Trudeau, his government, and the broad sections of the Canadian ruling class that oppose Trump are similarly determined to downplay the threat represented by Trump’s coup plot, and for like reasons.

First, because any serious examination of the breakdown of US democracy would quickly reveal that the same fundamental processes—rooted in the ruling elite’s monopolization of wealth, promotion of war and militarism, and cultivation of reaction—are at work in all the imperialist countries.

Second, because they share the Democrats’ mortal fear of an upsurge of the American working class and the galvanizing impact that it would have on the class struggle in Canada.

And finally, because much as they consider Trump a liability to North American imperialist interests, should he prevail the basic economic and geopolitical interests of Canadian capital will require that they work out a modus vivendi with America’s führer president—just as they have for the past four years.

The preparations for a coup in Washington and the Canadian ruling elite’s complicit response must serve as a call to action. Opposition to the growing threat of dictatorship and the imperialist Canada-US military-strategic partnership requires uniting Canadian and American workers in a common struggle and on the basis of a socialist and internationalist program.

Masking the True Poverty Rate

Shawn Fremstad

According to the Census Bureau, the poverty rate for the United States was 10.5 percent in 2019, “the lowest since estimates were first released for 1959.”  What the Census Bureau didn’t say is that the poverty measure it uses is still based on 1959 assumptions that have little to do with the realities of families today. If we had poverty measures that replaced these outdated assumptions with modern ones, the real poverty rate would be much higher, especially for children.

Several of these outdated assumptions relate to care, gender, and children’s developmental and participation needs. One of the bedrock assumptions of the Official Poverty Measure (OPM) is that every family includes a “housewife.” That is, a married woman whose full-time job  is “running or managing her family’s home — caring for her children; buying, cooking, and storing food for the family; buying goods that the family needs for everyday life; housekeeping, cleaning and maintaining the home; and making, buying and mending clothes for the family—and who is not employed outside the home ….”

The vast majority of women were married and not working in the labor force in the late 1950s, so this assumption may have made sense back then, although even that is debatable. Regardless, it holds little water today when most women are in the labor force and only about half live with a spouse.

Moreover, the “housewife” assumed by the OPM is not just any “housewife,” but a qualitatively specific kind of housewife. According to Mollie Orshanky, the economist at the Social Security Administration who developed the poverty measure, it assumed: “a careful shopper, a skillful cook, and a good manager who will prepare all the family’s meals at home.”

Because the OPM assumes children are being cared for by housewives, no allowance is included in the poverty line for the child care a parent may need to work outside the home. As a result, a parent working outside the home is treated as having the exact same set of needs as a parent working inside the home. Another fundamentally important form of care, health care, is also not included in any meaningful way in the OPM.

Finally, the OPM treats children as equivalent to little adults without any distinct developmental needs. Interestingly, the family budgets produced by the Bureau of Labor Statistics in the 1960s did “assume that maintenance of health and social well-being, the nurture of children, and participation in community activi­ties are both desirable and necessary social goals for all families of the type for which the budgets were constructed.” Yet, these same assumptions were not applied to the OPM when it was developed.

What about the federal government’s other poverty measure? The Supplemental Poverty Measure (SPM), was adopted during the Obama administration and based in large part on recommendations made in 1995 by an academic panel of the National Academy of Sciences.

Although it is a newer measure than the OPM, the SPM leaves these outdated assumptions mostly in place. According to the SPM, two adults raising two children in 2019 needed only $28,881 to not be poor (assuming they rented and lived somewhere with average housing costs), an amount just under $3,000 more than the OPM’s that same year.

As Barbara Bergmann and four other experts put it in 2011: “the most dramatic development of the last half-century has been the flow of women into the formal labor force, with the resulting partial marketization of child care (in the case of the United States). It’s vexing, then, that the first major reform of poverty measurement [the SPM] in the last half century doesn’t satisfactorily represent the implications of that development.” To this I would add that it is similarly vexing that the SPM does not take children’s developmental and social participation needs into account in any meaningful way, despite several decades of research documenting the importance of these needs.

In a new report, published by the Bernard L. Schwartz Rediscovering Government Institute at The Century Foundation, and jointly released with the Center for Economic and Policy Research, I make several recommendations that would increase the relevance and accuracy of poverty measurement in the United States, particularly when it comes to the treatment of child care, health care, and children’s development and participation needs.

It’s also important to note that the American public is already ahead of the experts. As I detail in the report, public opinion surveys show that the public thinks that the federal government sets the poverty line at a significantly higher dollar amount than SPM. Similarly, when the public is asked to name the minimum income needed to get by where they live, the responses average more than twice the SPM.

Will resetting the poverty line in a reasonable fashion mean that more Americans will be counted as having resources below it? Yes, but that’s only because a reasonable reset will provide a more accurate picture of who is economically deprived by today’s standards, rather than yesterday’s. At the same time, such a reset will help capture the extent to which care- and child-related benefits, like Medicaid and child care assistance, reduce the real poverty rate, and have the added benefit of better reflecting the public’s understanding of what it takes to not be poor today.

Britain is on the Skids, Economically and Morally

Brian Cloughley

Countless millions in Britain are suffering economically and/or medically from the effects of the government’s erratic whack-a-mole approach to the Covid-19 crisis.  On the other hand, criminal gangs and some very rich citizens have prospered greatly from the effects of the pandemic, and morally it is difficult to draw a line between these elements of the community.

Scams by criminals have included fake websites offering supposed cures for the virus, and bogus claims for job support.  There have been many news reports about such things but these are just the ones that have surfaced because their originators have been inefficient or unlucky.  There are countless other scams out there, with evil people making a lot of money by defrauding innocent citizens. It was ever thus, but the charity Age UK has listed a number of particularly squalid con-jobs aimed specifically at cheating the old and vulnerable, and when one examines them it is difficult not to doubt that human beings are indeed far from being nature’s last word in moral development.

Which brings us to Sir Jim Ratcliffe, Britain’s richest person and vulgar creep who was honored by being made a knight in 2018 for “Services to Business and Investment”.

Britain’s honors system is discredited and devoid of utility.  It is officially intended that a distinction such as a knighthood or the Order of the British Empire (patently an anachronism) is given to those who have made a “major contribution” to the nation at a national or local level.  Deterioration set in during the prime ministership of David Lloyd George in the 1920s, when a series of squalid shenanigans devalued the system.  A conman called Maundy Gregory sold honors, with a knighthood, for example, being available for the equivalent of half a million dollars in today’s money.  Official inquiries cleared those involved (they always do), and the system continued, with lots of what we might call colorful persons being given honors for indefinable services.

On 25 September it was reported that Britain’s richest person had ditched the country that had honored him for “Services to Business” and that “Ratcliffe, a petrochemicals magnate with an estimated £17.5 billion fortune, has . . . changed his tax domicile from Hampshire to Monaco, the sovereign city-state that is already home to many of the UK’s richest people. It has been estimated that the move will save him £4 billion in tax payments. People who live in Monaco for at least 183 days a year do not pay any income or property taxes . . .”

There have been several periods during which Britain was greatly in need of money for reasons of national survival, but this time the situation is desperate. The Financial Times noted the Bank of England’s “forecast that the coronavirus crisis will push the UK economy into its deepest recession in 300 years . . .” and it is obvious the country needs every penny it can get in order to weather the present economic typhoon and try to get back on the rails of development and progress.  So it’s just the right time for Britain’s richest man to conjure up a scheme whereby he can avoid paying billions that his country so urgently needs.

The casual obscenity of this man’s greed would be entirely his own business (used in the widest sense) were it not for the fact that if he condescended to pay tax in the country that has provided him with his fortune, he would not suffer in the slightest.  He would still have his bling-bling yacht and his flashy mansions confetti-scattered over England (and now Monaco).  He would still have his four luxury jet aircraft, each of which cost over 50 million dollars. His lifestyle is redolent of his immense wealth and would not change in the slightest were he to live in Britain and pay his taxes, and unfortunately he exemplifies the moral tenor of the country’s rich and influential top dogs: it’s all for me and nothing for them.

Which leads us to the British government, headed shakily by Boris Johnson, a cartoon figure with the morals of an alley-cat on happy pills whose accession to leadership of the Conservative Party was the result of a campaign of squalid deviousness. The Conservative Party has an indestructible majority in Parliament but is lurching from crisis to crisis because of ham-fisted management and the machinations of unelected “special advisers” (known as Spads) and other highly-placed political appointees who are paid by the taxpayer and wield power without responsibility.  Johnson’s chief Spad, a repulsive scumbag called Dominic Cummings who has all the charm and attraction of a dirty sack full of cold wet spaghetti, continues to perform unprincipled antics which give a good indication of the government’s overall character, but there are other signals that are equally alarming.

A former Australian politician, one Tony Abbott, has been appointed Britain’s international trade envoy, a post of considerable power and importance, given that he will be required to negotiate international trade agreements from the UK’s position of post-Brexit weakness.  His competence to do this is open to question, but the main doubt about his selection by the British government is not his lack of technical ability but his totalitarian convictions.

It is barely credible in this time of plague crisis that any prominent individual would declare that the media had spread “virus hysteria” and that people should be allowed to make their own decisions. Abbott regrets that governments around the world have policies designed to save “almost every life at almost any cost” because instead of trying to save lives these governments should behave “like health economists, trained to pose uncomfortable questions about a level of deaths we might have to live with.”  He costed the value of life in cash terms and said that “if the average age of those who would have died is 80, even with roughly 10 years of expected life left, that’s still $200,000 per quality life year or substantially beyond what governments are usually prepared to pay for life-saving drugs.”

In other words, Abbott and his disciples believe that older people aren’t worth much and should not be protected from the Covid-19 virus and in order to save money should just be allowed to die.

His callous and pitiless stance has no doubt been welcomed by those in the British hierarchy who intend to introduce a system whereby refugees seeking asylum in the UK will be confined in centers “offshore” in small desolate islands or disused ferries or cruise ships (as in Australia which operates several establishments resembling the US prison camp at Guantanamo Bay). The crass inhumanity of such a procedure might pass belief in the minds of real people but is consistent with the convictions of many in power in Britain.

In the Covid emergency the UK has the highest number of deaths in Europe and is the worst hit of all major world economies. It is in the middle of complex Brexit negotiations with the European Union, and will suffer even more when its exit is final. As always, it will be the poorest and least technically or academically qualified who will suffer most, but, like the old people who aren’t worth much, the poor and underprivileged do not figure on the screens of the rich and influential. And they can’t go to Monaco.

Britain is on the skids, economically and morally, and is approaching catastrophe.  Certainly there is blame to be allocated — but what the real people need is support and guidance from a considerate and responsible government. They won’t get it ;  and all we can do is pity them.