Airline unions try to impose wage freeze deal with Virgin Australia

Terry Cook

Within weeks of corporate raider Bain Capital fully taking over Virgin Australia, the country’s second largest carrier, the airline unions have signed off on “in-principle” work agreements that would inflict an 18-month to two-year pay freeze on the company’s remaining 6,000 workers.

This is on top of the unions opposing any unified struggle against the destruction of thousands of jobs at both Virgin and Qantas, the former publicly-owned airline, and the similar suppression of airline workers’ struggles internationally against massive job and pay cuts.

Virgin collapsed and went into administration in March, owing banks and other creditors more than $6.8 billion. It was eventually sold to Bain, a private equity firm selected by the administrators from a gaggle of corporate hyenas circling the failed airline looking for lucrative pickings.

Virgin Australia Airbus A320 at Christmas Island International Airport [Source: Wikimedia Commons]

The pay freeze deal, hatched during closed-door negotiations, was brokered by the Transport Workers Union (TWU), Flight Attendants Association of Australia (FAAA), Australian Services Union (ASU) and Australian Licensed Aircraft Engineers Association (ALAEA).

Anxious to prove their worth to Bain as reliable industrial police forces for further cost-cutting measures, the unions are trying to ram through the deal via online ballots, while providing their members with scant and misleading outlines of their agreements.

The unions even claim that the deal is an “achievement,” because it supposedly provides the surviving workers with “job security.” In reality, they are holding the threat of further job losses over their members’ heads to intimidate any opposition.

TWU national secretary Michael Kaine told media that the agreements ensure “Virgin workers will carry out the airline’s work as opposed to being outsourced.” ASU assistant national secretary Emeline Gaske said it was “pleasing the airline would keep roles in-house instead of contracting work to outside agencies.”

Summing up the unions’ pro-corporate role, ALAEA federal secretary Steve Purvinas said the pay freeze would help place “Virgin on the footing it needs to be a strong, competitive airline.” He called on the Liberal-National Coalition government to provide the company with millions of dollars more in more taxpayer-funded assistance “to ensure the airline’s future survival.”

The unions’ thinly-veiled threats that Virgin workers would face deeper job cuts unless they accept the wage freeze follows confirmation by Qantas last week that it will outsource over 2,000 positions, including baggage handlers, ramp workers and cabin cleaners.

To block any fight by workers against the Qantas outsourcing, the unions are now placing it in the hands of the Federal Court. That was after the TWU failed to convince Qantas to employ the union itself as the cheap labour contractor for the outsourcing operation.

The unions’ claim that by accepting cuts to working conditions and wages workers will protect their jobs is a fraud. Like every airline owner around the world, Bain is utilising the COVID-19 pandemic to restructure and slash costs at the expense of the workforce.

Immediately on acquiring Virgin, without any resistance by the unions, Bain slashed 3,000 jobs and ditched the carrier’s low-cost airline TigerAir at the cost of hundreds of jobs, including cabin crew and ground staff. All the 220 pilot positions at TigerAir were shed before the Bain takeover to make Virgin more attractive to investors.

Responding to the 3,000 job cull, the TWU’s Kaine telegraphed the unions’ willingness to police further cost-cutting. He welcomed Bain’s plan “to restart Virgin Australia” as a “leaner” operation, claiming it offered a “glimmer of hope” for the future.

As they have done for decades, the unions will harness airline workers behind the drive to make their employers “competitive” in the ruthless war for market share. This means that workers will be played off against each other in a continuous driving down of working conditions throughout the global industry.

Virgin’s new CEO Jayne Hrdlicka praised the unions for negotiating the pay freeze. “We’ve asked a lot of them as a result of the operating environment we find ourselves in, and we are grateful for their understanding and support throughout.”

Hrdlicka has a record. She left Bain to become head of strategy at Qantas in 2010, mentored by the airline’s CEO Allan Joyce. She was directly involved in Qantas’s assault on workers’ conditions after Joyce grounded its entire fleet and locked out its workforce during a work contract dispute. This paved the way for destruction of 5,000 full-time jobs, the imposition of an 18-month wage freeze and the slashing of working conditions.

After being appointed CEO of Qantas’s budget airline Jetstar, a position she held until 2016, Hrdlicka drove through cost-cutting programs, including pay freezes, by promising future bonuses that never materialised. During this process, Hrdlicka clearly learnt that the unions’ ritual chest-thumping was empty bluster designed to pull the wool over workers’ eyes.

In October the unions initially railed against Hrdlicka’s appointment as Virgin CEO, fearing she might try to sideline them. Clearly, she and Bain have decided to retain their services as pro-business industrial enforcers for now.

Typically, the unions have given their members only highly selective and deceptive information about the deals they have reached with Virgin. According to the scant details posted on the ASU web site on December 3, the agreements lock workers into low pay and poor conditions.

Under the ASU proposal, the highest pay rate for the most experienced and most qualified guest services workers will remain at the base rate of just $27.27 an hour, while “trainees” will be stuck at $22.22 and new recruits will be unable to rise above $24.64. Only 18 percent of the workforce must be full-time, leaving the vast majority on part-time work, and only guaranteed a minimum of 20 hours a week.

The response of the unions at Virgin takes to new level their record of collaboration with the employers since the 1980s. They have worked with Labor and Coalition governments alike to enforce the destruction of thousands of jobs, the imposition of ever-more onerous workloads and the decimation of previous hard-won conditions.

Virgin workers should reject the pay freeze deals as a first step in breaking out of this union straitjacket. They have to take matters into their own hands and build new organisations of struggle, such as rank-and-file committees, completely independent of the unions. These committees would be tasked with turning out to airline workers globally for a unified struggle against the ruling class offensive.

To succeed, this struggle needs to be based on a socialist perspective. That means the fight for workers’ governments that would place the airlines and all essential industries, along with the major banks and corporations, under public ownership and democratic workers’ control.

US autoworkers speak in support of strikes in South Korea and India

Shannon Jones

US autoworkers are speaking out in support of their brothers and sisters in South Korea and India, who are engaged in struggles against transnational car companies General Motors, Toyota and Kia.

Earlier this month, General Motors workers in South Korea voted down a sellout deal brokered by their union, the Korean Metal Workers Union (KMWU), which was aimed at shutting down a powerful walkout by thousands of autoworkers. The KMWU proposal would have substituted bonuses for annual wage increases. The workers are seeking to win a substantial raise after wages were frozen in 2018 following economic blackmail by management, which threatened to close down operations and seek cheaper labor elsewhere, possibly in China.

Meanwhile, South Korean Kia workers have engaged in partial strikes aimed at securing a wage increase to augment their inadequate salaries. Like GM workers, Kia has retaliated by threatening workers with job losses. Auto management as well as the government are insisting that workers increase productivity to offset financial losses due to the pandemic.

2 GM workers in South Korea, 2019 (Credit: AP photo/Ahn Young-joon)

A member of the Faurecia Gladstone Rank-and-File Safety Committee in Columbus, Indiana, spoke to the World Socialist Web Site Autoworker Newsletter in support of the South Korean autoworkers. The Faurecia Gladstone plant produces catalytic converters and complex exhaust systems for all the major car companies as well as for heavy truck manufacturers and farm equipment makers like Cummins and John Deere.

“General Motors is banking on the workers being intimidated by the threat of closing that plant in South Korea, but that will not be so easy. Really, the working class has them by the shorthairs because the corporation needs that production.

“I was thinking about this in relation to the situation at our plant. I think they’re planning something like a move or a shutdown. I have never seen so many parts stacked up inside the factory and out. They treat you so badly, they can’t even find enough people to come in and work.

“General Motors is doing the same thing to them that Trump is doing to us. But we have the power to shut them down. We need to put our foot down and tell these companies that we are not going to be the victims. They have already demonstrated that they cannot run these businesses without putting their employees in jeopardy.

“Trump advocates a law that says that a company cannot be sued by their employees if they cause them to be infected with COVID-19, and Democrats and Republicans are likely to agree to it.

“All the working class needs to take the Korean autoworkers as an example because these companies are not going to do anything for us. We have to do it ourselves.”

A worker at General Motors’ plant in Fairfax, Missouri, also spoke in support of the striking South Korean workers, drawing a parallel with the experiences of the UAW sellout of the 2019 strike by GM workers in the US.

“It’s just another gross display of the union willing to sell out its members and benefit General Motors. By offering bonuses it saves the company from increased pensions, since hourly wages increase pensions and bonuses don’t.

“It’s tiresome that General Motors threatens its employees and doesn’t abide by a legally binding contract and gets away with it.”

A month-long strike by 3,000 Toyota workers at two plants in the southern state of Karnataka is in imminent danger. Workers are defying a government order to end the strike and accept management’s demands for increased production targets. Now the Karnataka government is threatening to prosecute strikers if they do not knuckle under.

On November 25, tens of millions of workers in India joined a one-day general strike to oppose the right-wing, Hindu-chauvinist Bharatiya Janata Party (BJP) government’s pro-investor “labor reforms,” including fire-at-will contracts and the elimination of health and safety regulations.

The Faurecia Gladstone worker commented, “If we all combine together, even 30 percent of the working class, they won’t be able to push us around like that. The unions put it in the contract that the company has the right to fire you if you refuse to work. The unions are getting rid of strikes. They want to get somebody in there that is more compliant.”

Workers at Fiat Chrysler Sterling Height Assembly (SHAP) north of Detroit also spoke in support of autoworkers In South Korea and India. Workers at SHAP defied threats by the United Auto Workers and management to conduct a wildcat job action over the spread of COVID-19 in the plant last March, helping to force a temporary shutdown of North American Auto production.

A member of the Sterling Heights Rank-and-File Safety Committee said, “It is important that they understand they are not alone in this. It is what we are going through in the US. I thought we were alone in this, but we are not, it’s going on around the world.”

Another SHAP worker spoke about the attempts to repress strikes in India and South Korea, saying, “I am definitely opposed to that. Something like that can easily trickle down to the US. I don’t want anyone to force me to work, like I am in prison or on probation.”

The sentiments expressed by US autoworkers in solidarity with their working class brothers and sisters overseas stands in sharp contrast to the nonstop nationalist poison promoted by the UAW, which spreads the lie that American workers share common interests with the auto company billionaire stockholders and corporate owners.

Workers are objectively united in a globally interconnected network of production, with every vehicle the result of the labor of countless workers internationally. The attempt by employers to increase the exploitation of workers in any area of the world has a detrimental impact on all. Only by overcoming national and ethnic divisions promoted by the unions and uniting as a common force against the transnational conglomerates can autoworkers and all workers secure the defense of jobs, wages and decent and safe working conditions.

New study finds young adults vulnerable to developing debilitating long-term complications from COVID-19

Dominic Gustavo

A new study conducted by the University of Dayton in Ohio has concluded that adolescents and young adults who fall ill with COVID-19 have a high chance of being afflicted with persistent and potentially devastating long-term complications. The results expose the pseudoscientific claims, promoted by the bourgeois press, that young people are exempt from the most serious effects of COVID-19. The promotion of this lie has been used to justify the homicidal back-to-school drive despite record cases, hospitalizations and deaths from the virus.

The preliminary study surveyed 43 students who had either tested positive or been clinically diagnosed with COVID-19. Only students who had been sickened with a mild or moderate (non-hospitalized) case of COVID-19 were surveyed. Over 50 percent of these students reported symptoms more than 28 days later, and 30 percent were still experiencing symptoms more than 50 days later. The study also surveyed 58 students who had not contracted COVID-19 as a control group, to make sure that the symptoms were not the result of general stressors or other health issues that typically affect college students.

The symptoms reported most frequently by what they called the “post-COVID syndrome” group were impaired concentration, headaches, rhinitis, exercise intolerance, dyspnea, sleep impairment, brain fog, appetite loss, fatigue, and chest pain. It is notable that all but one of the post-COVID-19 syndrome group were women. According to the study, although men are more likely to die from COVID-19 (accounting for 70 percent of COVID-19 deaths), women are more likely to experience prolonged complications.

Young people wearing masks (pikist.com)

The study explains: “It is plausible that the more active female immune system may be an advantage in clearing the virus, but this could be a double-edged sword if the female immune activation produces a lingering syndrome. This sexually dimorphic immune response is further supported by a recent study which found that 12.5 percent of males but only 2.6 percent of females with severe COVID-19 had neutralizing immunoglobulin G (IgG) autoantibodies against interferons which could explain some of the increased male mortality.”

Overall, these findings sharply contradict the claim that long-term complications from COVID-19 only affect middle-aged or elderly people. Dr. Julie Walsh-Messinger, one of the organizers of the study, said in a statement on the university website:

The common belief in the U.S. is that COVID-19 is benign or short-lived in young adults. … Our study, which we believe is the first to report on post-COVID syndrome in college students, almost exclusively between 18 and 21 years of age, suggests otherwise. More research needs to be done to confirm these findings, but until then, we urge the medical and scientific community to consider young adults vulnerable to post-COVID syndrome and to closely monitor those who contracted the disease for lingering viral effects.

The study goes on to cite a Centers for Disease Control and Prevention (CDC) report, which found that one in five adults between the ages of 18 and 34 reported that they were still experiencing symptoms three weeks after testing positive for the virus. A July report by the CDC found that fully 35 percent of people with mild cases of COVID-19 had not fully recovered two-three weeks later.

It is notable that the study took place at the University of Dayton, where an  18-year-old freshman died of COVID-19 in October, a deadly consequence of the pseudoscientific notion that young adults and adolescents have nothing to fear from the novel coronavirus. Since reopening, the University of Dayton has recorded at least 1,532 cases of COVID-19 on campus.

The as yet unnamed “post-COVID syndrome” presents itself in a wide range of symptoms from mild to debilitating and potentially life-threatening. Common symptoms include chronic fatigue, shortness of breath, headaches, heart palpitations, aching of the joints, chest pain, loss of taste or smell, and gastrointestinal issues. More serious complications include damage to the heart, lungs and kidneys, among many others.

The syndrome can also manifest in a number of neurological disorders ranging from insomnia to cognitive impairment—which some survivors have likened to dementia—marked by “brain fog,” memory loss and general confusion. Psychological disorders such as depression and anxiety have also been commonly reported.

One case that has received widespread attention is that of Arizona resident Riley Behrens. Behrens, a 23-year-old Harvard student and rugby athlete, suffered a Transient Ischemic Attack, a form of mild stroke, after contracting COVID-19. Though mostly recovered since then, he continues to experience dizziness and fatigue, with even mundane activities proving a challenge. According to USAToday: “I’m not walking my dog on long walks. I’m not over-exerting myself cleaning my house. I’m not allowed to drive until I’m cleared by a neurologist. I can’t play sports because the risk of another head injury increases the risk of a stroke.”

Dr. Luay Shayya, associated with Neurology Consultants of Arizona, told USAToday that the case of Behrens is more common than one might imagine: “There have been multiple case reports published ... about patients who are young having large strokes due to COVID. … It’s very unusual for young people to have strokes to begin with.”

It is also known that young children and teens are susceptible to developing post-COVID syndrome. One anguished parent told the WSWS: “My daughter has lost 30 pounds, she has heart problems, she has joint swelling and pain, she spends four hours a week at therapy, she has weird infections, she fights fatigue daily, she has brain fog. I just found out yesterday that she has a weak heart with a constant rapid heart rate. She just hasn’t been the same.”

Those who suffer from post-COVID syndrome, known as “long-haulers,” are breaking their silence and speaking out about their struggles. Many have had their experiences dismissed by doctors as being the result of PTSD or depression resulting from their COVID-19 illness. However, as the population stricken with the syndrome grows, their pain has become undeniable. Online support groups such as Body Politic and Survivor Corps have appeared, giving a voice to those who had been suffering in silence.

A recent New York Times article published the accounts of COVID-19 survivors and their health care providers as they struggle to understand and treat the debilitating syndrome. Dr. Ann Parker, who works at a post-COVID clinic at Johns Hopkins, reported: “Approximately three months after their acute illness, more than half of our patients have at least a mild cognitive impairment. … We’re also seeing substantial mental health impairments.”

Hannah Davis, a 32-year-old Brooklyn artist and researcher, told the Times: “I forgot my partner’s name. … I would regularly pick up a hot pan, burn myself, put it down and literally do it again. I forgot how to shower. I forgot how to dress myself.” Davis, who is involved with Body Politic, went on to cite a survey conducted by the group of 3,800 of its members in 56 countries. According to the Times, the survey found that 85 percent reported cognitive dysfunction, 75 percent were having difficulties functioning at work, and almost half had difficulties with speech and language.

Several physicians, among them Dr. Anthony Fauci of the National Institute of Health, have speculated that many of those suffering from COVID-19 complications are on track to develop a condition resembling Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). ME/CFS, is described by the Institute of Medicine as “a serious, chronic, complex systemic disease that often can profoundly affect the lives of patients.” This is a mysterious affliction that has no known cure and can cripple its sufferers for months, and sometimes years.

While the exact mechanism whereby COVID-19 causes these long-term effects remains murky, what is undeniable are the devastating implications of hundreds of thousands, and possibly millions of Americans being stricken with debilitating chronic health issues. In light of the growing mountain of evidence showing that young adults and adolescents are vulnerable to the ravages of COVID-19, the policy of reopening the schools and universities assumes a criminal character.

The catastrophic policies of the ruling class—represented by both Democrats and Republicans—which have allowed the uncontrolled spread of the coronavirus, will not only result in hundreds of thousands of preventable deaths, but will also cause untold suffering and misery for the millions who survive. This constitutes nothing less than a crime against all of humanity, and only the intervention of the international working class on the basis of a revolutionary socialist program—with the explicit aim of overthrowing capitalism—can halt this orgy of agony and death.

Lufthansa increases job cuts to almost 50,000

Ulrich Rippert

Resting on the close collaboration of Verdi and the other airline unions, the Lufthansa Executive Board is stepping up its cost-cutting measures. The already announced reduction of 30,000 jobs is being accelerated and increased to almost 50,000.

In the spring, the German government provided the company with a rescue package worth €9 billion. This money will now be used to organise an unprecedented retrenchment, destroying the livelihoods of tens of thousands of workers and their families in what is a jobs massacre at state expense with the support of the trade unions.

On Monday, Focus-Online magazine published a report on the effects of the coronavirus pandemic on Lufthansa. It states that the already announced and commenced reduction of 29,000 jobs will not be stretched out to the end of next year but will be completed in the next three weeks, by the end of the year, meaning compulsory redundancies are unavoidable.

Lufthansa aircraft at Frankfurt Airport (Photo: Kevin Hackert / CC BY-NC 2.0)

“But that is by far not all,” the article states. The airline had also sold off its catering subsidiary LSG’s European business, with 7,500 employees, and next year, another 10,000 jobs are to be slashed in Germany. “Those who stay at Lufthansa should forgo their salary—others will be laid off,” Focus-Online writes. A company spokeswoman confirmed a corresponding report in Bild am Sonntag over the weekend.

This massive attack on the jobs and incomes of employees is not the inevitable result of the flight cancellations and falling passenger numbers due to the coronavirus crisis, as the company management and union officials claim in identical statements. If this were the case, employees—who are, in any case, largely being financed by the state via short-time work compensation—could receive interim payments from the rescue fund until after the crisis.

The coronavirus is not the cause but serves as a pretext for enforcing long-planned and long-prepared restructuring measures, combined with job and wage cuts and worse working conditions. The goal is to build up Lufthansa as a leading European airline and make it highly profitable for investors—i.e., to trim it for profit and position it successfully for international competition.

The pandemic is being used to accelerate the industrial policy goals of the grand coalition of Christian Democrats and Social Democrats, which Economics Minister Peter Altmaier (CDU) presented at the beginning of last year as the “National Industrial Strategy 2030.”

The German government is working closely with major shareholder Heinz Hermann Thiele, who increased his shareholding in Lufthansa to 15 percent in March. Last month, he had called for a “viable restructuring programme worthy of the name.” According to Thiele, the most important thing is that costs be reduced immediately and sustained through “comprehensive job cuts.”

Thiele is known for his ruthless capitalist methods. The 79-year-old multibillionaire has assets of €13 billion and is one of the 10 richest people in Germany. He built his company Knorr-Bremse into the world market leader in brakes for trains and commercial vehicles by radically intensifying the levels of exploitation. He makes employees work 42 hours a week, seven hours longer than in metalworking companies covered by collective agreements.

The unions also support the federal government’s “National Industrial Strategy.” Although they still call themselves “employee representatives,” they collaborate closely with the government and management and play a key role in pushing through dismissals, wage reductions and social cuts.

To combat this social devastation and defend jobs and wages, it is necessary to understand the function and role of the trade unions and their works council representatives. Their top officials sit on company supervisory boards, advise management on all personnel matters, and draw up the strategic plans to implement the cuts—i.e., the social attacks. For this, they are rewarded with princely earnings, in addition to being bribed with high emoluments. In total, the 10 so-called employee representatives on the Lufthansa Supervisory Board have received €1,070,000 for their close cooperation in the elaboration of savings measures and redundancies.

The works council and union representatives implement the cuts programmes, compile the list of layoffs, persuade employees to sign termination agreements in one-on-one talks, exerting blatant pressure and threatening anyone who resists with being placed on the layoff list. At the same time, they organise the occasional noisy protest to blow off steam while doing everything to suppress any serious struggle to defend jobs.

At Lufthansa, the role of the unions takes drastic forms. In recent months, all three aviation unions have signed downgrading agreements that dwarf all the concessions and give-backs made by the unions.

The pilots’ union Cockpit (VC), the Independent Flight Attendants Organisation (UFO) and service union Verdi, which represents the approximately 35,000 ground workers and acts as Lufthansa’s de facto in-house union, are seeking to outbid each other in terms of the social cuts. According to their own statements, they have offered the Lufthansa board of directors a €1.2 billion cut in employee incomes.

Cockpit already agreed in the spring to reduce pilot salaries by up to 50 percent by the end of the year. On Wednesday, the union announced that this salary cut would be extended until the end of June 2022. In addition to short-time work, the package provides for concessions in salaries and pensions, VC said. “The concessions agreed this spring, and those now additionally offered, amount to a total of over €600 million. This corresponds to salary reductions of up to 50 percent compared to the pre-crisis period,” VC President Markus Wahl said.

UFO signed an agreement with Lufthansa in the summer, which will save the company half-a-billion euros by the end of 2023. For the 22,000 cabin crew of the parent company to which the agreement applies, this means an average loss of income of €23,000 over three-and-a-half years.

The savings will be realised by suspending wage increases, shortening working hours with a corresponding reduction in wages, reducing contributions to the company pension scheme and cutting jobs. In addition, there will be “voluntary” measures, such as using unpaid leave, further reductions in working hours and early retirement. Those affected will thus lose not only a large part of their current income but also their future pension provisions.

At the beginning of November, Verdi also agreed to a downgrading agreement for the ground staff. By immediately waiving vacation and Christmas bonuses as well as a wage freeze and waiving allowances until the end of 2021, “the ground staff are making a savings contribution of more than €200 million to help overcome the crisis,” explained Verdi Vice-chair Christine Behle, who is also deputy chairwoman of the Lufthansa Supervisory Board. By reaching an agreement covering ground staff, up to 50 percent of the personnel costs of this group of employees could be saved next year, rejoiced Michael Niggemann, head of Human Resources.

It is a first for the trade unions in Germany to agree on such a wages give-back totalling €1.2 billion. This takes on a new dimension of union sell-outs and is encouraging management to take even tougher action and drastically accelerate job cuts.

In the summer, WSWS published the article “Lufthansa and the bankruptcy of the unions,” in which we stated: “The events at Lufthansa clearly show the bankruptcy of the trade unions and their perspective. For decades, they have subordinated the interests of the workers to the profit interests of the corporations, within the framework of ‘social partnership.’ There are no mass dismissals and plant closures in Germany that do not bear the signature of the trade unions and their works council representatives. At Lufthansa, the unions are now going so far as to organise rallies for a ‘rescue package’ that includes the destruction of tens of thousands of jobs and massive wage and social cuts!”

The events at Lufthansa expose the transformation of the unions into management consultants defending the interests of the corporations and the government. Faced with the deepest global crisis of capitalism in 75 years, they are determined to decimate workers’ living standards to defend the profits of “their” national corporations in the international trade war—not only at Lufthansa but also in auto, engineering, steel, chemical and all other industries.

It is time to break with these corrupt organisations. Jobs, wages and social gains can only be defended in a rebellion against the unions. The Sozialistische Gleichheitspartei (Socialist Equality Party, SGP) calls for the establishment of independent rank-and-file committees that network internationally and across corporations and organise the struggle to defend jobs and wages.

This requires a socialist perspective centred on the interests of working people, not company profits and the enrichment of shareholders. The crisis in the airline industry cannot be solved on a capitalist basis and within a national framework. It requires the expropriation of the corporations and their transformation into democratically controlled public institutions that serve the needs of society rather than the drive to increase profits.

US secretary of state hypocritically sanctions Chinese officials over Hong Kong human rights

Peter Symonds

On Monday, US Secretary of State Mike Pompeo seized on the disqualification last month of four opposition members of Hong Kong’s Legislative Council to sanction 14 members of the standing committee of China’s National People’s Congress (NPC). The standing committee had authorized the Hong Kong administration to disqualify legislators who promoted Hong Kong independence, refused to recognise Chinese sovereignty or called for foreign intervention. Opposition members of the Legislative Council resigned en masse in protest.

In his statement, Pompeo, who is notorious for his anti-China diatribes, again lashed out at “Beijing’s unrelenting assault against Hong Kong’s democratic processes [that] has gutted its Legislative Council, rendering the body a rubber stamp devoid of meaningful opposition.” He attacked the actions of the NPC standing committee as having “effectively neutered the ability of the people of Hong Kong to choose their elected representatives.”

Secretary of State Mike Pompeo and President Donald Trump speaks during a press briefing in March, 2020. (Image Credit: AP Photo/Evan Vucci)

Pompeo also condemned the NPC standing committee for passing a sweeping anti-democratic National Security Law in June that has been used to crack down on anti-Beijing protests that erupted last year over the attempts by the Hong Kong administration to enact a new extradition treaty. Last week, the Hong Kong courts sentenced three prominent protest leaders—Joshua Wong, Agnes Chow, Ivan Lam—to jail terms for their part in an unauthorized assembly last year.

Under the sanctions, the 14 members of the NPC standing committee and their immediate family members will be barred from entering the United States, their assets in the US will be blocked and American citizens will be barred from any dealing with them. On the pretext of defending democracy in Hong Kong, the US State Department has already imposed similar sanctions on a number of individuals including its chief executive Carrie Lam, who holds the territory’s top post.

Fearing that the protests in Hong Kong could encourage unrest on the Chinese mainland, the Chinese Communist Party (CCP) regime has since resorted to increasingly anti-democratic methods to suppress opposition. However, for the Trump administration to portray itself as the defender of democratic rights in Hong Kong, or anywhere else for that matter, is the height of hypocrisy. Trump had no compunction about mobilizing federal paramilitary forces to brutally crack down on widespread protests in the US against police violence, and moreover has conspired to subvert the victory of Joe Biden in the presidential election last month.

Washington has a long record of selectively exploiting human rights issues to further its economic and strategic interests, while turning a blind eye to flagrant abuses of democratic rights by its allies and strategic partners. Pompeo’s denunciations of China over a growing range of issues—from human rights in Hong Kong, Xinjiang and Tibet, to Chinese territorial claims in the South China Sea and blaming Beijing for the coronavirus—are part of the escalating US-led economic and strategic confrontation with China over the past decade.

In a comment entitled “China Is National Security Threat No. 1” published in the Wall Street Journal last week, the US Director of National Intelligence

After declaring that “the People’s Republic of China poses the greatest threat to America today, and the greatest threat to democracy and freedom world-wide since World War II,” Ratcliffe accused China, on the basis of unsubstantiated assertions, of robbing US companies of intellectual property, stealing sensitive defence technology and developing its own “world-class capabilities in emerging technologies.”

In other words, the US fears that China will overtake it economically and technologically, including in the arena of military power. Declaring that China posed a “once-in-a-generation challenge,” Ratcliffe declared: “This generation will be judged by its response to China’s effort to reshape the world in its own image and replace America as the dominant superpower.” And he urged a warlike response, on a par with the US entry into World War II to defeat “the scourge of fascism” and Cold War measures aimed at “bringing down the Iron Curtain.”

Should Joe Biden assume the presidency next January, his administration will only escalate the US war drive against China. As the vice-president in the Obama administration, Biden was closely involved in its aggressive “pivot to Asia” that involved an across-the-board diplomatic, economic and strategic offensive aimed at undermining China. Its military “rebalance” has ensured that 60 percent of American naval and air assets were stationed in the Indo-Pacific region by 2020 and has strengthened US alliances, basing agreements and strategic alliances throughout the region.

During his election campaign, Biden sought to outflank Trump as a more aggressive and hardline defender of the interests of US imperialism. He branded Chinese President Xi Jinping as a “thug” and, in one of his election ads, declaring that “Trump rolled over for the Chinese—he took their word for it” over COVID-19. While Biden’s tactical approach to China may be different, he is just as determined to prevent it from challenging US global hegemony.

“Human rights” is the increasingly tawdry banner under which the US is prosecuting its aggressive confrontation with China. Last month, the Five Eyes top-level intelligence-sharing group—comprising the US, Britain, Australia, Canada and New Zealand—took the unusual step of weighing in alongside Washington in condemning the disqualification of Hong Kong legislators and posturing as defenders of democratic rights.

Hong Kong, which was a British colony up until its hand-over to China in 1997, has never been ruled democratically. Beijing simply took over the anti-democratic structures through which London administered its colony—the all-powerful British colonial governor was renamed as the chief executive and selected by a committee of Beijing appointees. The Legislative Council, with its limited powers, remained largely as it was—only partially chosen by direct elections. The US of course never cavilled against Britain for its undemocratic, colonial rule.

The political weakness of the protest movement that erupted last year is that it was dominated by organisations and parties that promoted the false hope that the US and Britain would defend democratic rights in Hong Kong. For Washington, the rights of people in Hong Kong, or for that matter throughout China, are simply a convenient pretext for its war drive. The real allies of working people in Hong Kong are workers in China and internationally, not US and British imperialism, which will quickly abandon their “democratic” bluster if it suits their interests.

Moreover, the orientation towards Washington and London plays directly into the hands of Beijing, which exploits claims of “foreign interference” to justify its anti-democratic methods. On Tuesday, China denounced the US sanctions on NPC standing committee members. Foreign ministry spokeswoman Hua Chunying condemned “the American side’s rude and unreasonable, crazy and vile behaviour.” On the same day, the Hong Kong police arrested at least eight opposition leaders in a new sweep under the draconian National Security Law.

European Central Bank set to provide further market boost

Nick Beams

The European Central Bank is expected to announce a further boost for financial markets by adding an additional €500 billion to the €1.35 trillion financial asset purchasing program it initiated in response to the COVID-19 pandemic, when its governing council meets on Thursday.

On the same day, European leaders will start a series of virtual meetings to try to gain agreement on a €750 billion European Union fund aimed at providing assistance to governments that have been hardest hit by the pandemic.

Christine Lagarde, President of the European Central Bank (Image credit: Bernd Hartung / European Central Bank)

The fund was approved in principle earlier this year, but its operation has been held up because of disputes with the increasingly authoritarian governments of Poland and Hungary over its disbursement. The EU majority has said the provision of funds must be tied to respect for the rule of law.

One of the aims of the increased ECB financial asset purchases is to raise the price of government bonds, thereby lowering the interest rates that governments have to pay to finance their borrowing programs, as well as providing a further boost to financial and equity markets.

The crucial importance of the ECB program was highlighted back in March when it was developing its response to the COVID-19 pandemic. Incoming ECB president Christine Lagarde remarked at a press conference that it was not the job of the central bank to close the gap between the yield on the bonds of the stronger and weaker members of the eurozone.

Her remarks prompted a major sell-off of Italian government bonds and a 17 percent fall in the country’s stock market. Lagarde gave a television interview in which she pulled back from her previous remarks.

At the same time, according to a report in the Wall Street Journal earlier this month, the ECB’s chief economist Philip Lane “made dozens of private calls to banks and private investors,” to provide reassurances that the ECB was ready to buy Italian bonds if necessary.

The calls, which involved major hedge funds and banks, such as BlackRock, Deutsche Bank and Goldman Sachs, were a significant departure from what is considered the normal practice of only delivering information to market participants at the same time.

Whatever the content of the discussions, they were followed by a major initiative six days later when the ECB unveiled a €750 billion asset purchasing program which it upscaled to €1.35 trillion in June.

Bond prices rose, leading to a fall in yields (the two have an inverse relationship), with the result that yields on Italian and Spanish government bonds have fallen to record lows. As the WSJ noted, “this has meant that owning European government bonds has been profitable for investors this year” because the value of their holdings has risen.

As Sandra Holdsworth of Aegon Asset Management told the Financial Times: “The commitment to keeping spreads low has impressed markets this year. Why wouldn’t you buy Portuguese or Italian bonds if you know they have the support of the central bank?”

Since the upscaling of the asset purchasing program in June, the ECB has indicated it intends to provide still further stimulus.

Its actions form a vital component of the trillions of dollars poured into financial markets by the world’s central banks, which have seen stock prices soar to record highs amid the carnage inflicted on the lives of workers the world over.

According to the Financial Times, the MSCI All-Country World share index rose by 12.2 percent in November in its best month on record to reach an all-time high. Since the lows reached in March, market capitalisation has increased by $30 trillion.

Wall Street, as a result of the Federal Reserve’s stimulus measures, is leading the way. After rebounding from the lows in March, when a financial freeze led to a massive Fed intervention, it has reached all-time highs with the Dow passing what President Trump called the “sacred” number of 30,000. This has taken place amid a dramatic acceleration in the infection rates for COVID-19.

The markets have been boosted by the prospect of a rollout of the COVID-19 vaccine. But the main factor in the Wall Street surge has been the stimulus provided by the Fed along with the more than $3 trillion funnelled to corporations through the CARES Act.

Wall Street is looking to further measures from an incoming Biden administration following the announcement that former Fed chair Janet Yellen will be appointed Treasury Secretary. Yellen was a firm proponent of the quantitative easing policies, initiated by her predecessor Ben Bernanke under the Obama administration.

In a comment to the Financial Times, long-time market analyst Ed Yardeni described Yellen as the “Fairy Godmother of the Bull Market” and said that as Biden’s Treasury Secretary “she will continue to wave her magic wand.”

In terms of their relationship to underlying value, stock prices have reached record highs, especially in the high-tech area which has risen 36 percent this year while the broader market has gained 14 percent.

The cyclically adjusted price to earnings ratio of the S&P 500 index developed by economist Robert Shiller reached 33.4 at the start of this month, putting it above the level it reached in 1929 before the crash that ushered in the Great Depression and nearly double its historic average of 17. The only time that current levels have been exceeded is December 1999 on the eve of the collapse of the tech bubble.

The rise and rise of global markets has far-reaching implications. In the first place it makes clear why governments refuse to take meaningful measures to deal with the pandemic—including the shutdown of non-essential services with payment to workers affected. Such measures, which would necessitate significant inroads into corporate wealth, would precipitate a stock market meltdown.

Secondly, the rise and rise of the markets, amid the most significant economic contraction since the 1930s, is not an indication of health but rather of financial parasitism. Stocks as well as bonds, both corporate and government, are not value in and of themselves. In the final analysis they are fictitious capital—claims on the surplus value extracted from the working class elsewhere in the economy.

This is why, in every country, class relations are being restructured to worsen working conditions, lower real pay and step up exploitation in order to feed this ever-growing cancer.

Trudeau Foundation Doctoral Scholarships 2021/2022

Application Deadline: 5th January 2021

To be taken at (country): Canadian Universities

Accepted Subject Areas: Social Sciences and Humanities related studies, preferably one of the following:

• Human Rights and Dignity
• Responsible Citizenship
• Canada and the World
• People and their Natural Environment

About the Award:  The Pierre Elliott Trudeau Foundation Scholarship Program will help shape researchers into engaged leaders who are conscious of the impact of their research, connected to the realities of the communities in which they work, and open to non-conventional forms of knowledge. The Foundation is seeking candidates who are audacious, original, and forward-thinking.

The program will last for three years and will also provide generous support for Scholars’ doctoral work in the form of a stipend and a research and travel allowance.

While the pandemic will require that the process be much more virtual, the Foundation will seek the brightest emerging Scholars from Canada and abroad to receive this remarkable Scholarship, as has always been the case. Through the Foundation’s leadership development program, these Scholars will learn from a new cohort of Fellows and Mentors, leading lights in their institutions and communities, under the scientific theme beginning in 2021, Language, Culture & Identity. 

The selection criteria for 2021 ushers in important changes rooted in the Foundation’s Strategic Plan 2019-2024. Importantly, these criteria are built upon the definition of diversity outlined in the plan, including the commitment to a diversity of perspectives, now under the banner Plurality of Perspectives. We continue to seek scholars with the greatest intellectual capacity, while also looking for those committed to deep listening, profound curiosity, exploring grey areas, and demonstrating a willingness to engage with a diversity of people, cultures, ideologies, and perspectives. In tandem with this development, the Foundation is pleased its programs will bear the emblem Brave Spaces, accountable and democratic spaces where a multiplicity of ideas may be expressed and debated in an open and welcoming fashion. This commitment to Brave Spaces, privileging robust debates while offering a safety net of policy, empathy circles, and mutual respect, recognizes that challenging and sometimes uncomfortable discussions are important steps on the road to becoming an Engaged Leader. 

Also, of note, all eligible candidates must now apply to the Foundation directly. In the past, universities selected a shortlist of nominees, a step that will no longer be part of the process in 2021. Universities will remain a vital partner in our selection process, however, this open application will allow far more candidates to be considered for the Pierre Elliott Trudeau Foundation Scholarship. We look forward to applicants who demonstrate the greatest academic excellence and intellectual capacity, leadership and engagement, agility and resilience, and, importantly, a commitment to engaging with a plurality of perspectives.  

Selection Criteria

• Academic excellence;
• Leadership experience and abilities;
• Thematic relevance of research to the Foundation’s themes;
• Public engagement;
• Desire to contribute to public dialogue and share knowledge;
• Communication skills;
• Desire to belong to a vibrant community made up of leaders from across sectors

The Foundation welcomes candidates embodying all forms of diversity, including but not limited to gender, ethnicity, language, region, and discipline. We encourage First Nations, Métis, and Inuit candidates.

Eligibility:

• You must be already accepted into or in year one, two, or three of a full-time doctoral program in the humanities or social sciences
• Your doctoral work must relate to at least one of the Foundation’s four themes: Human Rights and Dignity, Responsible Citizenship, Canada and the World, People and their Natural Environment
• Canadian citizens are eligible whether they are at a Canadian or an international institution
• Non-Canadians (permanent residents or foreign nationals) enrolled in a doctoral program at a Canadian institution are eligible

Selection:

1. Candidates who are committed to a three-year leadership program and who meet the eligibility criteria can apply directly to the Foundation through the application portal.
2. Universities play an integral role encouraging candidates to apply, recommending candidates (academic referees) and later, confirming the status of their students and other details.
3. The Foundation reviews all applications and shortlisted candidates are invited to group interviews. Finalists proceed to interviews with the Application and Nomination Review Committee (ANRC) who ultimately recommend their choices to the Board of Directors for final approval.

Number of Awards: Up to 20 Scholars will be selected in 2021.

Value of Awards: If you are chosen as a Pierre Elliott Trudeau Foundation Scholar, you will receive:

• Membership in a community of other Scholars, Mentors, and Fellows, all of whom are leaders and change-makers in their respective disciplines and sectors;
• Leadership training from Mentors and Fellows;
• $40,000 per year for three years to cover tuition and reasonable living expenses; and
• Up to $20,000 per year for three years, as a research and travel allowance;

If you are chosen as a Pierre Elliott Trudeau Foundation Scholar, you must:

• Attend a community retreat and two Institutes of Engaged Leadership during the first year of your term;
• Collaboratively plan and participate in a conference event during the second year of your term;
• Work with other Scholars, Mentors, and Fellows on a creative knowledge sharing and dissemination project during the third year of your term;
• Work towards fluency in English and French with support from the Foundation;
• Actively engage and collaborate with the Foundation’s community of Scholars, Mentors, and Fellows; and
• Submit one research progress report per year.

Duration: 3 years

How to Apply: All eligible candidates must now apply to the Foundation directly. In the past, universities selected a shortlist of nominees, a step that will no longer be part of the process in 2021. 

• It is important to go through all application requirements in the Award Webpage (see Link below) before applying.

Visit Award Webpage for Details

Gangsterism as Foreign Policy: Assassinations are Becoming the New Norm

Patrick Cockburn

I was in Israel on 4 November 1995 when a student named Yigal Amir assassinated the Israeli prime minister Yitzhak Rabin as he left a peace rally in Tel Aviv. A video shows Amir loitering by an exit to the square for 40 minutes before Rabin appears, when his killer takes out a pistol and fires two shots point blank into Rabin’s back. His purpose was to prevent a lasting peace settlement between Israelis and Palestinians by killing the man who was the most powerful protagonist of such an agreement.

The assassination was universally condemned amid plaudits for Rabin as a man and a statesman, but within a year Binyamin Netanyahu was elected prime minister and progress towards a settlement stalled and went into reverse.

Twenty-five years later almost to the day, another assassination took place, this time in Iran, of a nuclear scientist, Mohsen Fakhrizadeh, as he was driving in a car east of Tehran. He was ambushed and killed by a squad of gunmen, alleged to be Israeli, who shot him and exploded a bomb in a car prepositioned at the scene of the attack.

This time there was no international condemnation of the action of what was, going by different accounts, a death squad operating in a foreign country against a foreign citizen. This free pass was because the target was an Iranian and Fakhrizadeh had been accused by Israel of playing a leading role in a secret plan to build a nuclear device. But these allegations were unproven, mostly dated from long ago, and the current activities of the dead man are unclear. What is evident, however, is that “targeted killings” by assassins outside their home countries are becoming very much the norm as a way in which nations show their strength. The poisoning of the Skripals in Salisbury by Russian agents in Salisbury in 2018 and the murder of Jamal Khashoggi by a Saudi death squad in Istanbul the same year are good examples of this and the death of Fakhrizadeh is another.

This latest assassination was not justified primarily as an attempt to disrupt Iran’s nuclear programme, but as a legitimate and successful display of state power. The New York Times said approvingly that “Mr Fakhrizadeh has become the latest casualty in a campaign of audacious covert attacks seemingly designed to torment Iranian leaders with reminders of their weakness.” It added that the operation confronted Iran with an agonising choice between retaliation and seeking to re-engage with the US when Joe Biden becomes president, replacing the viscerally anti-Iranian Donald Trump.

Any description of this or other “targeted killing” by Israel or anybody else should carry a health warning. Everybody involved has a reason for lying, just as they once did about Saddam Hussein’s non-existent WMD in 2003. Anything leaked by intelligence agencies to a credulous media should only be consumed with a large measure of salt.

Without officially claiming the attack, Israel is sending a message to Tehran to the effect that “we may soon no longer have Trump in our corner, but we can still hit you hard”. A further motive is to sour Iran against a nuclear deal with America, embolden Iranian hard liners who always opposed it, potentially provoke self-destructive Iranian retaliation, and complicate Biden’s declared intention to return to Barack Obama’s 2015 agreement with Iran.  

Notice several peculiarities about this assassination: those emphasising the enormity of the breach in Iranian security are not Israelis but Iranians, reputedly close to the Islamic Revolutionary Guard Corps (IRGC). These paint a rather unlikely scenario of an ambush by a dozen assassins, some leaping from a car and others arriving on motorcycles, and in case they should miss their target, there is a Fiat car packed with explosives ready to detonate.

A more likely explanation is that the IRGC, which was responsible for Fakhizadeh’s security, failed once again and is trying to excuse themselves by claiming that they were faced with an overwhelming force that nobody could have resisted. The IRGC’s reputation for competence had already been damaged in January this year when an IRGC crew manning an anti-aircraft missile battery shot down a Ukrainian aircraft over Tehran, killing 176 passengers and crew.

This disastrous mistake came in the wake of the assassination of General Qassem Soleimani, the IRGC head of covert operations in much of the Middle East, by a US drone at Baghdad airport on 3 January, another sign that state-sponsored assassinations are becoming an acceptable international practice.

How will this all play out in terms of future US relations with Iran? The Joint Comprehensive Plan of Action (JCPOA), Obama’s nuclear deal with Iran, was his chief diplomatic achievement. Withdrawing from it in 2018 and seeking to extract better terms from Iran through sanctions amounting to an economic siege, was the most important initiative by Trump in the Middle East.

Economic warfare like this did a lot of damage to Iran but it did not succeed in forcing it to negotiate and it was never likely to do so since Trump’s strategy, if anything so incoherent deserves that name, was to force surrender or regime change on Iran.

Biden says he wants to return to the JCPOA, but only if Iran is compliant, too. There is plenty of room here for disagreement about what exactly compliance entails and a return to the old agreement will be resisted by Israeli, Saudi Arabia and its anti-Iranian Arab allies, and much of the foreign policy establishment in Washington.

Iranian enthusiasm for the 2015 agreement has also ebbed since they discovered that it did not in practice end economic sanctions. They have since found that these can to some degree be circumvented by secretly selling oil at a discounted price.

All recent US administrations have come into office hoping – and sometimes declaring publicly – that they would not allow themselves to be sucked into crises and messy wars in the Middle East. Invariably they have failed because the region is where the political tectonic plates of the world meet and grind together. It is the arena where outside powers confront each other directly or through their proxies.

“Targeted killings” on an individual or mass basis may appear to be a way of tipping the balance towards whatever country has decided to go into the assassination business. The killing of Yitzhak Rabin did matter for the future of the Israelis and the Palestinians, but this was the act of a single fanatic and not of a government. Few other assassinations in the Middle East have had much long-term impact, contrary to the cinematic view of a world where Mr Bigs, like Goldfinger or Dr No, are evil masterminds whose elimination will make a difference. In the real world, figures like Fakhrizadeh and Soleimani can always be replaced.

Generals and politicians once imagined that campaigns to kill the local leaders of insurgencies in Afghanistan and Iraq would open the door to victory. But they found that “night raids” enraged local communities and dead leaders were swiftly replaced by angrier and more aggressive substitutes. One such campaign in Iraq led to a sharp jump in attacks on American forces. State-sponsored assassinations employ the methods of gangsterism and discredit and delegitimise those who use them.