COVID outbreak and China tensions expose Australian government bid to claim “recovery”

Mike Head

Frantic efforts are being made by the Australian government and corporate media to talk up prospects of “economic recovery,” despite continuing mass unemployment, rising tensions with China—the country’s biggest export market—and the raging global COVID-19 pandemic.

In releasing the government’s “mid-year economic and fiscal outlook” (MYEFO) last Thursday, Treasurer Josh Frydenberg did his best to promote the economic prospects of consumer travel and spending. He declared: “Australians are approaching Christmas with optimism and hope.”

This was despite the government’s own statistics showing that more than three million workers remain dependent on poverty-line JobKeeper wage subsidies or JobSeeker dole payments, both of which have been slashed and are due to be cut again on December 31.

Australian Treasurer Josh Frydenberg (Source: Wikimedia)

The vastly understated official unemployment figures released the same day showed the seasonally-adjusted jobless rate dropped slightly from 7 to 6.8 percent in November. Yet that still left almost a million workers seeking jobs and nearly 2.5 million classified as “under-utilised” (unemployed or under-employed, that is, trying to get extra hours).

A more accurate picture was provided by the Roy Morgan monthly employment survey. It estimated the total under-utilisation rate at 21 percent, or just under 3 million people. Employment rose in November—largely due to the lifting of pandemic restrictions in Victoria, the state previously worst affected by COVID-19—but about 40,000 people dropped out of the workforce.

New proof of the vulnerability to the pandemic came with an outbreak in Sydney just as Frydenberg released the annual budget update. The cluster quickly exposed one of the most blatant profit-driven assertions in the update: that the coronavirus is under control and there will be no more lockdowns or border controls.

Despite the renewed danger of infections spreading, Frydenberg said it would be “premature” and unnecessarily damage consumer and business confidence if any safety restrictions were imposed in response to the Sydney outbreak.

Nevertheless, popular concern over the deadly and infectious virus compelled most state and territory governments to reintroduce travel restrictions, denting big business hopes for a lucrative Christmas tourism and retail boom.

While Frydenberg promoted hopes of a national vaccine “rollout” by “late 2021,” he admitted there were “downside risks to Australia’s economic recovery.” These included “the timing, distribution and effectiveness of the vaccine in stopping the spread of the virus globally, trade tensions that limit Australia’s access to export markets, and domestic economic uncertainty.”

Just a day before the MYEFO release, the Liberal-National government announced it would ramp up its conflict with Beijing by referring China to the World Trade Organisation to challenge anti-dumping tariffs imposed on Australian barley imports. This is one of a growing number of disputes—from wine to coal—now threatening Australian exports worth more than $6 billion a year.

The government has increasingly committed Australia to back the US confrontation with China. Yet the MYEFO underscored the ongoing reliance of key sections of Australian capitalism, and overall government revenues, on China—especially for iron ore sales. Higher ore prices, fueled by the Chinese regime’s stimulus measures and supply problems in Brazil, are expected to boost Australia’s gross domestic product (GDP) by $25 billion this financial year and increase company tax receipts by $1.3 billion this year and $4.8 billion next year.

Prime Minister Scott Morrison and the media falsely reported the MYEFO as showing a significant improvement in the economic scenario—primarily because of the ending of Victoria’s restrictions—since the annual federal budget was belatedly handed down on October 6.

Headlines such as “Recovery gathering pace” highlighted a $16 billion drop in the predicted federal government deficit for this year, from $213.7 billion to $197.7 billion, and a decrease in the four-year deficit total from $480 billion to $456 billion.

However, these remain the highest deficits ever recorded in peacetime. Federal government debt is still set to soar over $1 trillion by the end of the 2020s—a measure of the depth of the worst global economic breakdown since the 1930s Great Depression. State governments are also running large deficits, causing global credit ratings agencies to strip their AAA rankings from both New South Wales and Victoria, the two most populous states.

Even the cut in the forecast federal deficit was almost entirely due to the winding back of the JobKeeper and JobSeeker payments, which have barely kept millions of working-class households out of destitution since March. There will be an $11 billion drop-off in JobKeeper and a $3.7 billion cut in welfare payments this financial year.

In other words, almost all the budget “improvement” is at the expense of working people. The resulting social crisis will intensify as mortgage, rent and small business insolvency moratoria are ended in the New Year, throwing millions more workers and family business operators into poverty.

This is a foretaste of the financial stress and social misery to come as the government implements “budget repair”—that is, imposes deeper austerity measures to extract the cost of the government deficits and debts by slashing social programs, including public health and education.

The MYEFO upgraded economic growth for this financial year to 0.75 percent, from minus 1.5 percent in the October budget. But that presupposes an end to a recession that produced the sharpest ever quarterly fall in GDP—7 percent from July to September. And the budget update confirmed negative net overseas migration and slower population growth because of the worldwide pandemic.

Even by the rosy predictions issued by Frydenberg, unemployment is yet to peak and non-mining private investment will plunge by a staggering 14.5 percent this financial year.

That is despite the federal, state and territory governments pouring about $300 billion in subsidies and incentives into the hands of business, mainly big business, this year. As well, the Reserve Bank has locked in record low interest rates of 0.1 percent for three years, and providing the financial markets with $100 billion of “quantitative easing.”

For all the upbeat propaganda, key corporate media outlets are lashing the government for not moving fast enough to unleash “budget repair” and “industrial relations reform” to further cut workers’ wages and conditions.

The Australian Financial Review editorial on Saturday accused the government of evading its “political challenges” by failing to chart a course to “wind back” spending. It also demanded “structural reform,” deeper cuts in the company tax rate and more aggressive moves to tackle the “quagmire of an industrial relations system.”

Likewise, the Australian editorial on Friday insisted that overcoming the budget deficits would require “structural reforms including in the hard-fought areas of industrial relations and tax.”

Another warning of the ruthless plans of the ruling elite came from the only expansion of social spending announced in the MYEFO. That was $850 million to fund the creation of another 10,000 “home care packages,” which are designed to keep elderly people out of residential nursing homes.

Over the past year, the government now claims to have funded 50,000 such packages. But that still leaves up to 100,000 people on waiting lists, often for more than 12 months. The MYEFO pittance is a continuation of the contempt for the lives of retired workers displayed by the fact that so far 685 of the country’s 908 COVID-19 deaths, or three-quarters, have occurred in chronically under-funded and poorly-staffed aged care facilities.

Trump held White House meeting on martial law plan to overturn election

Patrick Martin

President Donald Trump and his top aides reviewed a series of proposals for overturning his defeat in the presidential election at a meeting Friday night in the White House. This included discussion of a proposal that he declare martial law and order the seizure of voting machines in key battleground states, according to numerous press accounts.

The New York Times first reported on the meeting, which involved Trump, White House Chief of Staff Mark Meadows, White House Counsel Pat Cipollone and two prominent advocates of an election coup, former Trump campaign attorney Sidney Powell and former Trump national security advisor Gen. Michael Flynn. Additional details were reported by CNN, ABC, NBC and other news outlets.

It was the first meeting at the White House for Flynn since Trump pardoned him on two counts of perjury for lying to the FBI during the investigation, in the early days of the Trump administration, that led to his firing as national security advisor. It was the first White House visit for Powell since she was dismissed by the Trump campaign after voicing a series of bizarre conspiracy theories in which Venezuelan President Hugo Chavez (dead since 2013) was held responsible for manipulating the 2020 US presidential election.

Michael Flynn leaving federal court in Washington, DC, 2019. [Photo credit: AP Photo/Manuel Balce Ceneta, File]

Trump’s welcoming such discredited figures into the White House undoubtedly expresses mounting desperation, but also an utter refusal to concede the result of the election, won by Biden with a margin of more than seven million votes. While acting like a cornered rat, Trump, as president of the United States for another month, still possesses immense powers, particularly over the US military-intelligence apparatus.

General Flynn visited the White House one day after suggesting, in an interview on the rabidly pro-Trump Newsmax network, that Trump should declare martial law, order voting machines in six key states seized by federal authorities, and conduct a second election in those states under military supervision. This would, of course, mean armed soldiers insuring that the voters of Arizona, Georgia, Michigan, Nevada, Pennsylvania and Wisconsin got it “right” this time, i.e., that the electoral votes of these states, officially delivered to Democrat Joe Biden on December 14 as a result of each state’s balloting, were instead awarded to Trump.

According to the press accounts, Trump asked General Flynn about his proposal for martial law and a second election. Meadows and Cipollone, and other unidentified White House officials, reportedly opposed Flynn and said the president did not have the authority to take the proposed actions. Powell, who was Flynn’s lawyer in his perjury case before joining the effort of the Trump campaign to overturn the election results, was said to have denounced the White House officials for being insufficiently devoted to Trump’s interests.

The meeting was characterized as ending in a “screaming” match, without a clear decision as to what course Trump would take. At one point, Trump suggested he might appoint Powell as a special counsel to investigate the presidential election, a proposal that was opposed by White House officials and even by Trump’s principal election lawyer Rudy Giuliani, who is recovering from the coronavirus and participated in the meeting remotely.

Attorney General William Barr has resisted Trump’s demand to name a special counsel to investigate Hunter Biden, son of the president-elect, and presumably would oppose a similar appointment of Powell to investigate the election, but he is leaving the department under pressure from Trump, effective Wednesday, December 23. His interim successor, the current deputy attorney general, Jeffrey Rosen, could well be asked to make such appointments after Barr’s departure.

On Sunday, as details of the meeting and the illegal and unconstitutional proposals that were discussed became more widely known, Trump went on his Twitter account to denounce the press reports as “Fake News.”

According to the Times account, one of measures discussed at the meeting was a proposal by Giuliani that Trump issue an executive order to seize control of voting machines in the contested states so they could be examined for “fraud.” Giuliani reportedly discussed this option with the acting deputy secretary of the Department of Homeland Security, Kenneth Cuccinelli, last week, but Cuccinelli said the DHS did not have the authority to do so. An executive order would supposedly remedy that, but the president, as head of the federal government, does not have the power to take such action against the states, which actually administer elections under the US constitutional structure.

It is remarkable that Cuccinelli, a rabid anti-immigrant bigot and semi-fascist, who was a notorious law-and-order demagogue during his four years as state attorney general in Virginia, is now presented as a moderating force in the internal deliberations of the Trump administration.

In the only Sunday television interview program to take up the issue, CNN’s “State of the Union” began with host Jake Tapper declaring: “For anyone wondering just how much damage an outgoing president can do in the final month in office, we’re beginning to get something of an idea. On Friday in the Oval Office, the president reportedly discussed with disgraced pardoned former General Michael Flynn Flynn’s deranged proposal to have Trump declare martial law to force new elections in states that Biden won, so as to overturn the election results.

“Trump is also reportedly talking about giving the powers of a special counsel to attorney Sidney Powell, whose crackpot conspiracy theories about the election have been laughed out of courtroom after courtroom.”

Tapper asked a guest on the program, Republican Senator Mitt Romney, about the martial law plan, which Romney dismissed, saying, “It’s not going to happen. That’s going nowhere. And I understand the president is casting about, trying to find some way to have a different result than the one that was delivered by the American people.”

The only representative of the Biden transition to discuss the issue Sunday, Pete Buttigieg, Biden’s nominee for secretary of transportation, was far less categorical, merely stating that Biden would take office on Inauguration Day as scheduled, adding, “I just hope that, across the party and across the country, there’s an understanding about how important it is that we remain committed to democracy.”

Remarkably, there was no substantive discussion on any other Sunday television interview program about the White House discussions on martial law, nor did the Biden campaign issue any statement or comment on the issue of Trump’s continuing refusal to concede the election. Biden’s policy ever since November 3 has been to downplay Trump’s threats to overturn the election while reaching out to the military-intelligence apparatus and Wall Street to reassure them that the incoming Democratic administration will uphold their interests.

Trump continued to rail against the election results over the weekend on Twitter, declaring Saturday that it was “Statistically impossible to have lost the 2020 Election,” and calling for supporters to attend protests in Washington on January 6, 2021, when Congress officially counts the electoral votes cast by the 50 states and the District of Columbia. “Be there, will be wild,” he tweeted, reiterating claims that he won a landslide victory in the election, and adding, “Now Republican politicians have to fight so that their great victory is not stolen. Don’t be weak fools!”

A half-dozen Republican congressmen have said they will object to electoral votes being cast for Biden by states like Michigan, Pennsylvania and Georgia, and one senator, incoming Alabama Republican Tommy Tuberville, said he would provide the support from at least one senator required to force a vote on the objection. The objection would still fail, both in the Democratic-controlled House and in the Senate, where more than a dozen Republicans have said they accept Biden’s victory.

Meanwhile, the syndicated television program Inside Edition reported that Trump “has reportedly told his staff he’s not leaving the White House, flat out refusing to accept the results of the 2020 election…”

During the summer, after he had clinched the Democratic presidential nomination, Biden told interviewers that his “greatest fear” about the election was that Trump would refuse to acknowledge the decision of the voters and would refuse to carry out a peaceful transfer of power. Since the election, however, Biden has remained virtually silent on the issue, entrusting the transition to the national security apparatus and avoiding any appeal to the American population, for fear of triggering a political upheaval the Democrats could not control.

One indication of the mood in Washington—where the prospects of a Trump coup are the subject of heated discussions on a daily basis—is a little noticed amendment to the National Defense Authorization Act (NDAA) introduced by Democrat Chrissy Houlahan, a former Air Force officer, with Republican support. It would require that if the president invokes the Insurrection Act of 1807, as Trump threatened to do last June during the protests against the police murder of George Floyd, military and paramilitary units will be required to wear their names and insignia so they can be identified as they take to the streets.

Trump has threatened to veto the NDAA, although not over this amendment, which does almost nothing to restrain the possible use of the military against the American people.

Britain’s dangerous new COVID-19 strain: A warning to take urgent action now!

Robert Stevens

With 1.7 million people already dead worldwide and hospitals overwhelmed, scientists are sounding the alarm about a new, more infectious strain of COVID-19 that has emerged in Britain and is leading to a major surge in infections there.

The new strain of COVID-19 is believed to be responsible for the doubling of daily new COVID-19 cases in the UK this month. The country recorded 35,000 new cases on Sunday, its highest ever, up from an average of just 15,000 two weeks before.

The massive spread of this new strain of COVID-19 stands as yet another indictment of the Johnson government’s reckless and criminal response to the pandemic. By abandoning all efforts to eradicate the virus, the government left the population vulnerable and exposed to a deadly threat the consequences of which are still unknown.

A man wears a face mask to protect from coronavirus as he walks past Westminster underground station, in London, Tuesday, Dec. 15, 2020 (AP Photo/Alberto Pezzali)

The new strain appears to be 70 percent more infectious than the variants currently spreading throughout Europe and America.

While the new variant of the disease was first detected in September, by November a quarter of new cases in London were attributed to it. By mid-December, this had reached three quarters of all new cases.

Beyond making it into every part of the UK, the new variant has already spread to the Netherlands, Denmark and Australia, according to the World Health Organization. “The new variant is out of control,” UK Health Secretary Matt Hancock said.

“This new variant is very concerning and is unlike anything we have seen so far in the pandemic,” Jeffrey Barrett, director of the COVID-19 Genomics Initiative at the Wellcome Sanger Institute, told the Financial Times .

On Saturday John Edmunds, a member of the government’s Scientific Advisory Group for Emergencies (SAGE) committee, described the emergence of the new strain as the “worst moment of the whole epidemic as far as I’m concerned.” He warned of the “extraordinary infectivity of the new strain.”

Edmunds urged, “We will need much more severe measures to bring the incidence down. Worse than that we are starting from a very high incidence already with hospitals stretched and [National Health Service] staff under strain. It is a very perilous situation.”

On Sunday, countries throughout Europe and the world announced they would no longer admit travelers from Britain, including Austria, Belgium, Italy, Ireland, Germany, France and the Netherlands. On Saturday, Johnson introduced a new “Tier 4” level of restrictions, affecting 16.4 million people, including around 9 million people in all 32 London boroughs and much of southeast England.

The new variant of COVID-19 involves mutations in the structure of the virus. Barrett noted that 23 letters of the virus’s genetic code had changed, including 17 that could potentially impact the way the virus behaves and spreads.

Scientist Laruie Garret noted that COVID-19 has undergone three major changes so far this year. “Why is it happening? Because there’s so much virus in the world now, spreading fast, [increase]ing likelihood of random mutations. Is the new mutant in the US? Who knows?”

The emergence of this deadly new strain of COVID-19 underscores the criminal irresponsibility of the Johnson government and its “herd immunity” policy in response to the pandemic.

In March, Sir Patrick Vallance, the government’s chief scientific adviser, stood alongside Johnson and declared, “It’s not possible to stop everyone getting it, and it’s also not desirable.” On March 5, Johnson outlined his government’s response to the pandemic by saying, “perhaps you could take it on the chin, take it all in one go and allow the disease, as it were, to move through the population, without taking as many draconian measures.”

In August, former Labour Leader Jeremy Corbyn explained that in March he was briefed by the British government that its aim was to “build up herd immunity by allowing people to die,” a policy that was justified through what he called “Eugenic formulas.” Corbyn kept silent about the government’s homicidal intentions for six months.

The result of this policy has been a disaster. Nearly 70,000 people are dead in the UK. The country has a per capita mortality rate even higher than the United States, and 50 percent higher than Europe as a whole. And now, nearly a year after the pandemic first emerged, it is spreading, in the words of the government, “out of control” in the form of a new strain of the disease.

For weeks, the Johnson government has sought to use the rollout of COVID-19 vaccines – which will become available to the general public within a matter of months – to distract attention from its total failure to take any serious measures to contain the disease. The media was happy to play along, seeking to drown out the constantly rising death rate with nonstop coverage of the vaccine roll-out.

Johnson claimed Saturday that “the situation has deteriorated since I last spoke to you three days ago”—the day he declared that there would be no retreat from plans for shops to open 24 hours a day and for “bubbles” of three households to meet for five days over Christmas. The government had first learned about the new strain “earlier this week,” he added.

These are bare faced lies.

The government spent the last week stonewalling demands from scientists to abandon its deadly plans and had even threatened several London local authorities with legal action for planning to close schools three days before the official end of term to prevent a further spike in infections. Moreover, Maria Van Kerkhove, COVID-19 technical lead at the World Health Organisation told the BBC on Sunday that the UK had been aware of the new viral strain circulating in “south-east England since September.”

While definitive information is yet to surface as to the origins of the mutation, the premeditated and criminal inaction of the Tory government allowed it to spread unchecked. The new strain was detected at the same time as the government insisted on reopening schools followed by students being sent back to colleges and university campuses one month later.

These policies were sanctioned because the government wanted to ensure the profit margins of the corporations in the vital Christmas spending spree and because they wanted no challenge to the narrative that defeating the virus was only a matter of time.

The placing of profits above human safety and lives has instead led to an even more infectious strain of the virus spreading halfway around the world in a matter of weeks.

The murderous actions of the Johnson government are echoed by its counterparts in every country.

In the United States, 320,000 people are dead. In France 60,418 are dead, and 26,414 in Germany. Whether it is Trump or Biden, Merkel or Macron, noone can believe a word that these representatives of the ruling class say. Their entire response from the beginning has been dictated by the interests of the corporations and a super-rich oligarchy. Whatever the political coloration of the government, the policy is the same: Profits are what counts, and the lives of millions of workers are expendable.

Almost 1.7 million lives have already been lost globally, and thousands more are dying every day. There is no time to lose! Emergency measures must be taken to bring the virus under control!

The Socialist Equality Party in the UK, together with its sister parties in the International Committee of the Fourth International throughout the world, demands the immediate closure of all nonessential businesses and schools. This must be accompanied by full compensation for lost wages and small business income.

Trillions of dollars must be invested in health care infrastructure to treat, contain and eradicate COVID-19, and ensure society is protected from the threat of infectious disease in the future.

The claim that there is no money for these necessary emergency measures to save lives is a lie. The social resources required for the most vital public health needs of the population are monopolized by a financial elite whose interests are diametrically opposed to the needs of society.

Bipartisan US “relief” bill stiffs workers and unemployed, gives billions more to business

Jacob Crosse

Late Sunday night, congressional leaders from both parties signaled their acceptance of a roughly $900 billion coronavirus relief bill that includes generous handouts to large companies while leaving jobless workers and their families with crumbs. The bill is expected to pass both the House and Senate by Monday afternoon and be attached to a $1.4 trillion omnibus spending bill. President Donald Trump has signaled his intention to sign the bill into law.

The package, which Senate Minority Leader Chuck Schumer called a “strong shot in the arm,” does nowhere near enough to make whole the over 10 million people who have lost their jobs since March and the millions whose hours or wages have been reduced.

The bill does not provide health insurance for the estimated 15 million who have lost it during the pandemic. It will not house the over 162,000 who have been evicted during the pandemic, nor does it provide enough money to cover the nearly $6,000 in average back rent owed by some 12 million people, according to Moody’s analytics.

It’s been nearly nine months since congress passed the CARES Act, a windfall for the financial oligarchy that provided about $6 trillion in low-interest loans and cash subsidies to major banks and corporations, while providing limited relief for the general population in the form of a $1,200 stimulus check for those earning under $75,000, limited protection against eviction, and a $600 weekly federal unemployment benefit.

The new bill slashes the federal supplemental jobless benefit to only $300 a week and cuts the duration of the program to a mere 11 weeks. It reduces the one-time stimulus check to $600 from the CARES Act’s $1,200.

A temporary holdup in the bill’s passage was ironed out over the weekend after a deal was struck between Republican Senator Pat Toomey and the Democrats over several Federal Reserve programs created in the CARES Act that were set to expire at the end of the year. Treasury Secretary Steven Mnuchin had already ended the programs on his own, but the language Toomey included in the package would have required congressional approval to restart the programs in case another crisis for the financial oligarchy arose that required additional billions in immediate funds.

The Democrats demanded the removal of the proposed check on the supposed “independence of the Fed,” a fiction used to conceal the fact that the US central bank is an instrument of the corporate-financial oligarchy and does its bidding.

The Democrats had little problem abandoning federal aid to cash-starved states and cities, money for food programs under conditions of mass hunger, serious money for COVID-19 testing, tracing and PPE, and other desperately needed social funding they had included in the so-called Heroes Act passed by the House in May. But on the issue of unlimited Fed money to prop up the financial markets, they dug in their heels and refused to sign onto the deal until Toomey backed down.

In a tweet Sunday, Schumer boasted that Toomey had “dropped his dangerous language tying the Fed’s hands.”

While the text of the bill has yet to be released, it undoubtedly includes, largely buried in the fine print, innumerable gifts for the politically-connected and well-off. One such boon already unearthed is the inclusion of the so-called “three martini lunch” provision, which allows businesses, previously allowed to deduct 50 percent of meal expenses from their federal taxes, to increase the tax write-off to 100 percent. Unnamed tax experts assured the Washington Post that the handout should not exceed “a few billion dollars a year.”

Another provision included in previous summaries of the bill allows “intelligence and defense contractors to have flexible contracts during the COVID-19 pandemic.” While the precise meaning of this provision remains unclear, it is no doubt a gift to large defense industry corporations and has nothing to do with providing vaccines, food or housing to millions of people in need.

Democratic House Speaker Nancy Pelosi shot down two packages earlier this year presented by the White House and Senate Majority Leader Mitch McConnell that contained some funding for state and local governments, compared to the zero dollars in the current package.

Senate Majority Leader Mitch McConnell of Ky., talks with reporters after he spoke on the Senate floor Monday, Nov. 9, 2020, at the Capitol in Washington [Credit: AP Photo/Susan Walsh]

The bipartisan bill does not include a liability shield for corporations and businesses that infect their workers and customers with the coronavirus, which had been a central demand of Senate Republicans. However, as Senate Minority Whip Dick Durbin acknowledged in a speech earlier this month, 38 states have already passed such legislation.

The largest chunk of the package, $284 billion, will be dedicated to refunding the misnamed Paycheck Protection Program (PPP). Ostensibly created to provide low-interest loans that could be turned into grants to allow small businesses to continue paying their employees, in reality large businesses were handed millions in loans, consuming a disproportionate share of the funding, untold thousands of small businesses received nothing, and Wall Street banks pocketed billions in loan fees.

Over 100,000 legitimate small businesses, many of which were unable to navigate the paperwork or had their PPP loan applications rejected, have shut down permanently since March. One business that was able to take advantage of the PPP, according to a report earlier this year by the New York Post, was a political consulting group co-owned by “progressive” Representative Ilhan Omar’s husband, Tim Mynett, which was granted a $134,800 loan. In addition to the six-figure loan, the E Street Group LLC was the beneficiary of $500,000 in Economic Injury Disaster Loans.

Other major provisions of the bill include:

• $20 billion for the purchase of vaccines along with $8 billion for vaccine distribution and $20 billion to assist states with testing and contact tracing.
• $45 billion for transportation, including $14 billion for transit systems, $10 billion for highways, $2 billion for buses, $2 billion for airports and $1 billion for Amtrak.
• $16 billion for major US airlines, which already received $25 billion from the CARES Act and proceeded to lay off some 90,000 workers. The new money reportedly comes with a stipulation that airlines will have to return 32,000 furloughed workers.
• $1.4 billion in new funding for Trump’s border wall, including “new border security technology.”

The miserably inadequate level of social assistance in the bill is already arousing popular anger. On social media, one jobless worker wrote a message to Vermont Senator Bernie Sanders and New York Representative Alexandria Ocasio-Cortez, the supposed leaders of the “progressive” wing of the Democratic Party, declaring: “$600 stimulus. Thanks for not delivering on what you’ve promised for 8 months. Don’t tell us you care, you don’t.”

One Twitter user wrote, “congress has agreed to a $900 billion stimulus deal & Americans that [are] struggling [are] only getting a one time check of $600… $600 now and an eviction notice the next month. Happy Holidays Everyone!”

Another sardonically added, “thank you congress for finally passing a $600 stimulus check that will go directly to landlords.”

As with the CARES Act, the $600 checks will not be sent to adult dependents, meaning millions of college students won’t be receiving them. Immigrants without a Social Security number are also not eligible to receive checks. Federal unemployment benefits that some 12 million people are using through the Pandemic Unemployment Assistance and the Pandemic Emergency Unemployment Compensation programs have been extended for only 11 weeks, as opposed to the 16 weeks previously announced, and at only $300 a week.

A mere $25 billion is slated for rental assistance, and it is not known how much of this will actually go to tenants, who collectively owe some $70 billion in back rent, according to Moody’s.

A renewed eviction moratorium is reportedly in the bill. However, it appears to be only a one-month extension, ending on January 31, leaving up to 20 million people facing eviction.

Bridge the digital divide: Enable kids to have access to education in the new normal

Aditya Doiphode

The pandemic and the extended lockdown in India has hit the poor disproportionately hard. They have a higher risk of infection, significant loss of income and livelihoods, and immense learning losses for their children as the schools were closed for 7+ months.

During this period, government schools have been struggling with identifying new ways of working and trying to enable distance learning for students. Yes, it is neither easy nor straightforward as students from the most impoverished communities can only access digital learning on their phones and usually on low-tech platforms. A recent survey suggests that more than 50% of families surveyed did not have any digital devices through which their children could access online education. Even for kids with a smartphone, there are a lot of challenges. With incomes drastically reduces due to the current economic crisis, parents who are daily wage earners face a tough choice between purchasing mobile data for their child’s education or buying food for the coming days. With the loss of learning, the students most affected have the risk of slipping through society’s cracks, and their vulnerabilities have significantly heightened due to their socio-economic situation. At such a time, it is crucial to double down on efforts to ensure that the learning journey of the students continues. A critical requirement for enabling this is access to digital devices for the students.

The Way Forward:

It makes sense to have a staggered approach to uplifting the education system in India. There is a need to have a short, medium, and long term strategy.

In the short term, it is essential to provide immediate support, including food and direct benefits. To enable this, there needs to be direct money transfer into the neediest parents’ bank accounts (a fundraiser can support this). There need to be partnerships with feeding India and Zomato for deliveries of groceries. It is essential to identify community champions and empowering them to take up work like grocery distribution and implementation. It is also vital to share import information like relief schemes introduced by the govt, information on Covid-19 safety measures and a list of nearby food distribution centers, raise e-coupons, etc.

In the medium term, it is crucial to reach out to children and provide them an education which they would lose because of the lockdown. As the schools are still shut, there are chances that kids would have a loss of an entire academic years’ worth of learning. To combat that, we need to reach out to kids through their parent’s phones and the internet. Still, the challenge here is to provide them quality education through exciting, attractive, and relevant material. It is vital to make the parents understand the quality of education offered. This helps with getting their support for these initiatives.

Long Term Measures: Here, the focus needs to be on training teachers to facilitate a wholesome learning experience for the students. This training would help the teachers teach better even when we get back to normal, hopefully shortly. Teachers need to have a more in-depth knowledge of the subjects they teach to become true educators to their students.

These are a few ways in which these needy students can be given the education they deserve. There are NGO’s working on improving the education infrastructure to facilitate better education in government schools and incentivize education by providing better quality education.

This is the time for society to come together and help each other. Through partnerships and the right approach, we can directly support communities and rebuild systems that will emerge stronger, faster, and better.

Yes, we are in crisis, but in each crisis lies an opportunity for us to rebuild, revitalize and reorganize the system towards a better future.

Third worker dies of COVID-19 at a Bakkavor food plant in the UK

Robert Stevens

Two workers have died and dozens of workers have tested positive for COVID-19 at the Bakkavor Salads plant in Tilmanstone near Dover, Kent.

Food manufacturer Bakkavor is a UK-based conglomerate employing 17,000 workers in 23 factories. It supplies fresh prepared meals, salads, desserts, pizza and bread to British supermarkets including Tesco, Sainsburys, Marks & Spencer and Waitrose. The company also operates in the United States, where it had five plants in 2019, and China, where it had nine. In 2018, it reported revenues of £1.86 billion and pre-tax profits of £67 million, up 36 percent over the previous year.

The Bakkavor Salads plant in Tilmanstone near Dover, Kent (credit:: Google Maps)

On December 1, it was reported that a worker at the Tilmanstone plant had died after contracting the virus. The plant employs 800 workers, and the death was reported under conditions in which COVID-19 infections were soaring among the workforce. The GMB trade union reported that cases among the workforce at the time “rocketed from 35 in the first week of November to 79 by end of the month. At least 97 staff have been instructed to self-isolate.”

Just two days later, on December 3, a second worker at the plant was reported dead from COVID-19. By this time, 99 workers had been affected, according to the GMB.

No details were made public about the workers who died at the Tilmanstone plant.

Those deaths brought the total number of fatalities among Bakkavor’s workforce to three, following the death of an employee at a bakery run by Bakkavor in Devizes, Wiltshire in southern England. On August 12, the Wiltshire Gazette and Herald reported that the worker was a “68-year-old Devizes man, who had worked at the bakery for many years. He died in the Great Western Hospital in Swindon in April.”

The newspaper reported, “His family believe he contracted the virus at work after he was sneezed over by another employee who later also became ill.”

As to why the death only became public knowledge in August, the newspaper explained, “The company said it was unaware of the sneezing allegation and that it had not reported the death as at the time this was the responsibility of the hospital. Wiltshire Council's public health department was not aware of the death until told by the Gazette this week.”

Infections were increasing at the plant as the death came to light, with the Gazette reporting, “Last week five coronavirus cases were reported at Bakkavor on the Hopton Industrial Estate… By Friday [August 8] this had risen to seven and now the figure is 13”.

In August, an outbreak was reported at another Bakkavor plant, a dessert making facility in Newark, Nottinghamshire. An initial 20 staff were found to be infected. By August 18, after testing 1,262 of the 1,600-strong workforce, 98 were confirmed infected and 59 of these were reported to be already back in work.

The BBC quoted Richard Wiles, who works next to the Bakkavor plant. He said, “The workers have been upset for quite a while that they don't think enough has been done to protect them… It seems there has been a slow, modern British response to this and cakes have come before Covid safety.”

In the case of all three deaths, the company and local Public Health England authorities have insisted that safety is paramount in their plants and that there is no evidence to prove that infections originated on their premises. None of the bromides from Bakkavor about how safe their operations are can be taken at face value.

While it is obvious that infections originated outside workplaces, with many plants sited in areas in which the virus is surging, if workplaces are unsafe—as has been proven time and again to be the case in the UK and internationally, particularly in the meat packing and food processing industry —then the virus then spreads like wildfire within them.

Workers are caught between a rock and a hard place, knowing that if they do not attend work they risk losing their pay. In May, it was reported that two workers were infected at a Bakkavor plant in Spalding in Lincolnshire. A family member of an employee at the plant told Lincolnshire Live, “The employees are scared. If they were to take time off to protect themselves, they would not receive any pay unless they are confirmed ill. So many of the employees are forcing themselves into work so they can still afford to live… A lot of these people have families who are older and are at risk. We are needing help to sort something out for the workforce of Bakkavor."

Bakkavor has three plants in north London, employing around 4,000 workers. Many are immigrants from Sri Lanka and Gujarat and Goa in India.

In April, ITV obtained footage shot in a staff meeting at one of the plants, Bakkavor Meals, in Elveden, north London. Sean Madden, Bakkavor’s head of operations at Elveden, was secretly filmed as he addressed staff. Workers were told that it is impossible to socially distance and many employees seen in the footage were not socially distant from one another.

Madden speaks to the workers only a few feet away from another man standing next to him. Holding a facemask, he states, “When you come into the factory because we can’t socially distance in here, we want you to cover over your mouth and nose like this” [as he puts his face mask on].

Stating that workers need to be in the plant and on the production lines, he continues, “You know if we look at 45 percent of people who are off sick, maybe 5 percent of those have coronavirus. The other 40 percent of people, they just don’t want to come.”

He then threatens, “If we need to get rid of 200 people’s jobs next month, I’m going to look at who turned up to work and I’m going to look at who didn’t bother turning up to work. The people who didn’t bother turning up to work, you know, they will be the first people that we have to get rid of unfortunately.”

With the plant employing many workers from the Indian sub-continent, Madden’s threat was repeated in Hindi.

Some executives at companies including Bakkavor, Foxtons, Persimmon, Severn Trent and Burberry took pay cuts earlier in the year as token gestures. This was under conditions in which hundreds of thousands of workers were being laid off as the pandemic worsened. The Financial Times noted, “Bakkavor were among the groups that cut payouts to investors as a result of coronavirus.” Some of the top-paid directors at the firms “took a symbolic cut of 20 per cent— the amount that furloughed staff lose under the government scheme up to a cap of £2,500.” However, things soon got back to normal, with the FT reporting in June, “Bakkavor is… expected to revert to full pay from July…”

While Bakkavor refused to close its operations despite outbreaks of a deadly virus at multiple plants, and three deaths, it moved quickly to protect its profits in August by announcing the closure of one of its plants in Spalding—affecting 500 workers. It was shut with no opposition from the trade unions, with the firm announcing, “We've been working closely with our colleagues... and Unite throughout the consultation process and can confirm that no viable solutions were put forward to our ongoing challenges.”

Bakkavor’s plants only remain open because of the pernicious role of the GMB. The union claimed it had “lodged a formal collective grievance” on behalf of its members at Tilmanstone after the death of the first worker, stating that “we believe the health and safety of our members has been seriously compromised at the factory.” It added that “25% of the workforce [at Tilmanstone] has been affected by this outbreak—unfortunately Public Health England does not feel that this is enough to step in.”

Nothing was done, with the union, even after the death of the second worker, saying only that it “requested the factory close to allow mass testing of employees and a deep clean of its factory. Once this has been done, the factory can reopen, with staff returning to work safe in the knowledge every step has been taken to ensure they are working in the safest possible environment.”

On December 4, the day after the announcement of the death of the second worker, the GMB said it “has claimed a massive victory as the fresh food giant agreed full pay for staff off work and a rollout of mass testing at the Tilmanstone salads factory.”

Only a rotten pro-company outfit could describe any of this as a “victory”. The testing of an initial 375 staff confirmed that the plant was rife with infections as 48 employees tested positive, and another 44 went into self-isolation.

Defaults raise concerns on financial markets over Chinese debt

Nick Beams

A series of defaults over the past month on loans by companies that were thought to have state backing for their debts has sent a tremor through Chinese capitalism’s financial markets and raised significant questions for international investors.

According to Fitch Ratings, state-owned firms defaulted on a record $6.1 billion worth of bonds between January and October, an amount as much as the previous two years combined. But in November the problems significantly worsened, with defaults by three major companies.

The first sign of deeper trouble surfaced last month when the state-owned coal company Yongcheng Coal and Electricity Holding Group, located in central China, defaulted on a bond worth $152 million.

Two weeks later the high-profile state-owned technology group Tsinghua Unigroup said it would default on a domestic bond worth the equivalent of $199 million.

Yet worse was to come. Last week the company announced that it did not expect to pay interest or principal on $450 million worth of bonds. This would also trigger cross defaults on a further $2 billion of dollar bonds coming due between 2021 and 2028.

Tsinghua Unigroup is a major player in China’s drive to achieve self-reliance in the supply of semi-conductors. It is majority owned by Tsinghua University, one of China’s most prestigious academic institutions. The company has enjoyed backing from the government and in 2015 made a $23 billion bid for the US chip-maker Micron Technology.

People look at semiconductors on display from the Tsinghua Unigroup at the China Beijing International High Tech Expo in Beijing, Saturday, Sept. 19, 2020. (Credit: AP Photo/Mark Schiefelbein)

The third major default by a state-backed firm was by Brilliance Auto Holdings, which is linked to the major German auto company BMW. It failed to repay a domestic debt due in November.

The defaults have triggered concerns in money markets about the degree to which the Chinese government and financial authorities are prepared to let market forces run their course so as to put the country’s financial system on a sounder footing without sparking a general crisis.

Following the Tsinghua Unigroup default, Chinese Vice-Premier Liu He, who has been tasked with cleaning up the financial system, warned companies that Beijing would take a “zero tolerance” approach to misconduct in financing deals or attempts at debt evasion.

The Financial Times reported that the attitude of authorities had “rattled China’s nearly $4 trillion debt market of which state-owned enterprises are estimated to account for more than half.” It noted that in the week after the default by Yongcheng Coal at least 20 Chinese companies suspended plans for new debt issues totalling $2.4 billion, citing “recent market turmoil.”

The state sector of the Chinese economy is a major component of the financial system. State-owned enterprises account for about a third of gross domestic product (GDP) but more than half of bank loans in China and some 90 percent of corporate bonds. They have been regarded as sound investments because of what were seen as implicit government guarantees.

In comments reported by CNN last week, Logan Wright, director of market research at the Rhodium Group, noted: “The credibility of government guarantees has been the most important bulwark against [financial] crisis so far. Now we are seeing signs that this credibility is eroding.”

It appears that the government is prepared to allow at least some previously-backed firms to collapse. There are major risks involved, however.

Wright wrote in a recent research note: “Although authorities want market discipline for riskier firms, they cannot know how much credit risk might create broader contagion. No one can know this line clearly, given that there is no precedent for this risk in China’s financial system.”

The slowdown in the Chinese economy due to the coronavirus—growth is expected to come in around 2 percent this year compared to more than 6 percent last year—is the proximate cause of the debt problems. But debt in major Chinese enterprises has been building since the massive expansion of credit launched in response to the global financial crisis of 2008.

In a recent report, analysts at the Japanese financial firm Nomura said they viewed the recent defaults as “inevitable” as the government had been propping up enterprises with billions of dollars’ worth of stimulus. However, one of the problems for the government is that the stimulus measures are not generating the GDP increases they did in the past, so the debt burden on the economy becomes progressively greater.

In a report on the growing debt crisis, the Financial Times (FT) noted that a decade ago Yongcheng Coal was regarded as one China’s leading energy companies. But today its financial difficulties are seen as the harbinger of major problems.

According to an FT report published last week, Yongcheng Coal’s defaults have “ricocheted through China’s financial system,” with analysts saying that state-linked companies face difficulties in raising capital because the assumption that the government will always bail them out no longer applies.

The newspaper cited one analyst who warned that Yongcheng’s failure could be replicated by any state-owned enterprise with “weak fundamentals” and that a “lot more defaults could be in the pipeline.”

The debt problems are not confined to major companies. Moody’s Investor Services, which tracks local government debt in China, issued a report earlier this month putting a “negative outlook” for local and regional government debt for next year.

A report in the South China Morning Post last week cited comments by former vice-finance minister Zhang Hongli who said that local authorities had “relied on new borrowing to repay old debts” in about 60 percent of cases for the first 10 months of 2020.

This is a sure sign that local governments cannot generate enough revenue to cover debt repayments. There have been warnings that there could be a significant increase in defaults on loans raised through so-called local government financing vehicles in the coming year.

Canada’s pandemic wage subsidy: A slush fund for wealthy shareholders and corporate executives

Omar Ali & Roger Jordan

Several recent news reports have exposed how Canada’s ruling elite is using government pandemic support programs ostensibly intended for working people to award themselves lavish bonuses and shareholder payouts. At the centre of the scandal is the Canada Emergency Wage Subsidy (CEWS), which is expected to cost over $68 billion by the time it winds up in June 2021. Under this program, employers who can show significant revenue losses can obtain a federal government wage subsidy of up to 75 percent of their workers’ wages.

(Credit: Department of Finance Canada, Twitter)

 

Investigations conducted simultaneously by CBC and the Financial Post revealed that the CEWS is being used by large companies as little more than a slush fund to boost payouts to shareholders and executive bonuses. The Post found that 68 companies received a total of $1.03 billion in CEWS while paying upwards of $5 billion in dividends to stockholders. The reports were limited to publicly traded companies using information disclosed as part of routine financial reporting, indicating that the true extent of such blatant theft of public funds is far greater. In the face of inquiries from reporters, Justin Trudeau’s Liberal government has steadfastly refused to make public the names of all the corporations who have taken part in the wage subsidy program.

The companies cited in the exposés are not the corner stores, restaurants and other small businesses touted by the government as the beneficiaries of CEWS during its rollout, but large, well-known corporations with enormous revenues. Take Imperial Oil, the 140-year-old petroleum giant with large stakes in the Alberta oil sands and majority-owned by the United States-based Exxon Mobil. It collected $120 million in wage subsidies, while issuing $320 million in dividends.

Some companies undertook massive layoffs even while obtaining these handouts from the public treasury. For example, Leon’s, a large furniture retail chain, was able to report impressive numbers even while the coronavirus has ravaged the industry at large. It received $29.8 million in wage subsidies while paying its investors $9.8 million in dividends. The company also spent $36.2 million on stock buybacks. Despite being clearly flush with resources, it furloughed 6,000 workers at the various chains it owns, which include The Brick and Appliance Canada. Of these, 5 percent still haven’t been hired back, according to the company.

The trucking company TFI International sent home 1,500 workers when the virus began taking hold in the spring. The $63 million in subsidies were instead spent on $45 million in dividends and $9 million in buybacks that sent the share price rocketing. Its CEO dismissed any thought of not taking the subsidy as akin to thinking one is “more Catholic than the Pope.”

Perhaps the most egregious example of profiteering with public funds comes from the for-profit long-term care industry. For years, executives, enabled by the active support of all political parties for the privatization of elder care, siphoned off wealth intended to ensure care and dignity to patients into the pockets of private investors. The result has been devastation once the virus got into long-term care facilities. This has not chastened management into directing resources elsewhere, however. The CBC reported that two large providers, Extendicare and Sienna Senior Living, received a combined $157 million in wage subsidies while shelling out $74 million to shareholders this year. In Ontario alone, 480 residents and staff of their facilities have succumbed to COVID-19.

The CEWS program constitutes only a fraction of the millions funneled into the coffers of the corporate elite by the ruling Liberal government and the Bank of Canada during the pandemic. All told, the policy of market-bailouts, buybacks and tax write-offs will transfer well over $650 billion to the wealthiest Canadians. The entire process has been enacted with few restrictions or transparency. The Bank of Canada has flatly declared it will not publish the list of companies benefiting from its “quantitative easing” program until many years hence, if ever.

Unlike other countries, the government has not predicated subsidies on recipients refraining from issuing dividends or engaging in share buybacks. Nor have they demanded that profitable companies pay back the money they’ve received. Responding to criticism last week, Finance Minister Chrystia Freeland said that the money was earmarked for workers and that “[we] expect companies to comply with that.”

The government’s indifference to corporate profiteering is in marked contrast with its approach to the Canadian Emergency Response Benefit (CERB), which sent $2000 per month directly to Canadians unable to work due to COVID-19 lockdowns or loss of work. Having ended the program, it has shifted workers to other benefit packages with stricter requirements in order to pressure them to accept low-wage or substandard employment. On top of this, in recent weeks the Canada Revenue Agency has sent letters to more than 400,000 Canadians informing them that they must repay the benefits they received as they have been deemed ineligible for COVID-19 relief.

The optics of the government trying to claw back cash from jobless workers while corporations reap record profits using public funds has troubled even some of the most fervent advocates of the capitalist “free market.” The same media outlets that spent the better part of the spring, summer and fall denouncing the CERB payouts as a “moral hazard” that risked turning “workers into welfare slackers,” which was a key ideological argument in the homicidal back-to-work campaign, are now nervously pointing out that the corporate elite’s brazen self-enrichment through CEWS could trigger a social explosion.

The neoconservative Financial Post wrote, “The sight of large, relatively healthy corporations feasting on sustenance meant for weaker employers during a once-in-a-lifetime catastrophe is emblematic of why Canada’s style of capitalism is in trouble.” Revealing the mindset within a besieged ruling class, which sees the threat of social anger erupting on all sides, the Post commentator continued, “Change is coming, and I only hope those of us who are fans of (capitalism) get to take part. That’s far from assured.”

The CEWS scandal is not just a devastating exposure of the criminality that pervades the Canadian capitalist class, which has responded just as ruthlessly as its American counterpart to the pandemic. It also thoroughly exposes the role played by the New Democrats and the trade unions, which touted the CEWS, CERB, and other support programs as generous gestures from a “worker friendly” Liberal government.

On April 11, the same day the CEWS was unanimously approved in parliament, including with the votes of the New Democrats, the Canadian Labour Congress issued a statement enthusing over the measure. “Parliamentarians are clearly sensing the need to act decisively to protect jobs and to help keep Canadian households afloat,” asserted CLC President Hassan Yussuff. “This bill ensures that workers will continue to receive wages and also have access to workplace benefits in the short term.”

Behind this rhetorical bluster, Yussuff and his fellow union bureaucrats knew full well what was going on. One month earlier, Yussuff had appealed for a “collaborative front” between unions, employers and the Liberal government. The unions kept mum about the more than $650 billion bailout of the financial oligarchy and banks, while using phoney “progressive” rhetoric about the CERB and CEWS to cover up the fact that they were holding consultations with big business on how to reopen the economy as quickly as possible and helping impose sweeping attacks on workers to ensure the “global competitiveness” of Canadian capitalism. A joint statement signed by the CLC, Canadian Chamber of Commerce and Unifor, among others, from this time infamously declared that it was necessary to help businesses “come roaring back” after the crisis.

The implementation of these anti-worker policies over the past eight months has led to a vast accentuation of already deep-rooted social inequality. While the fabulous enrichment of the ultra-wealthy has resulted in Canada’s top 44 billionaires being $53 billion better off than they were when the pandemic hit in March, millions of working people have seen their incomes slashed. Moreover, the reckless reopening of the economy and schools has exposed workers to the risk of contracting the deadly virus in workplaces where virtually no safety measures have been implemented.

The unions’ complicity in the looting of society’s resources by the super-rich and the risking of workers’ lives on a daily basis underlines the fact that working class opposition to the disastrous handling of the pandemic can only develop independently and in opposition to these pro-capitalist, corporatist organizations. What workers need are their own organizations of struggle, rank-and-file safety committees in every workplace and neighbourhood, to fight for the impounding of the ill-gotten gains of the super-rich. The funds can then be used to pay workers and their families their wages in full during a shutdown of all nonessential production and schools until the pandemic is brought under control, and to provide billions to the health care system to ensure free, high quality care for all.