Inside the Pandora Papers

Chuck Collins

The Pandora Papers, a massive expose about the secret shell games and tax avoidance schemes of the world’s ultra-wealthy, has just hit headlines around the globe. See initial coverage here in The Washington Post and The Guardian.

This colossal undertaking involved 600 journalists from 117 countries and was coordinated by the International Consortium of Investigative Journalists (ICIJ) in what they describe as the “largest-ever journalistic collaborative.”

Five and a half years ago, the ICIJ released the Panama Papers, which focused on a leak from a single law firm, Mossack Fonseca. According to ICIJ Director Gerald Ryle, the Pandora Papers are the “Panama Papers on steroids.” See a summary prepared by the ICIJ here.

The Pandora Papers draws on leaks from confidential records at 14 different offshore wealth service firms in Switzerland, Singapore, Cyprus, Samoa, Vietnam, Hong Kong, as well as firms in well-known tax havens such as Belize, Seychelles, Bahamas, and the British Virgin Islands. These firms help wealthy individuals and corporations form trusts, foundations, incorporate companies, and establish other entities in low- or no-tax jurisdictions.

The Pandora Papers draw from almost 12 million files from these firms including leaked emails, memos, tax declarations, bank statements, passport scans, diagrams of corporate structures, secret spreadsheets, and clandestine real estate contracts. Some reveal the real owners of opaque shell companies for the first time.

Over the last three months, I’ve spoken confidentially with ICIJ journalists from Mexico, Argentina, Spain, Sweden, Germany, and the United Kingdom, providing background about how wealth hiding systems work in the United States. Drawing from my new book, The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions, I explained the role of the United States and the global wealth defense industry in sequestering wealth. (See this June interview about the book at the ICIJ website).

The Pandora Papers are truly a global story, with major implications in many countries. Some of the largest revelations involve Russian nationals with connections to Vladimir Putin and elites from Latin America.

For example, journalists from the Spanish daily El Pais exposed the “Secret Vault of Mexican Billionaires.” In Mexico they found over 3,000 wealthy and powerful Mexicans in the 11.9 million leaked files, with connections to current and previous presidents. They discovered a common pattern of wealthy Mexican elites using a single Panamanian law firm, Alcogal (Aleman, Cordero, Galindo & Lee), along with trusts in the British Virgin Islands and real estate purchases in Miami and around the United States.

The Pandora Papers will hopefully turn up the heat on the politicians that maintain the wealth-hiding status quo. The files list over 330 current and former politicians and world leaders from 91 countries that are implicated in transactions. This is twice the number implicated in the 2016 Panama Papers.

Political leaders include King Abdullah II from Jordan and former British Prime Minister Tony Blair (according to The Guardian, Jordan blocked the ICIJ web site hours before the Pandora papers release). This explains why existing political bodies seem incapable of closing down systems that enable wealth hiding and tax dodging.

“It demonstrates that the people that could end the secrecy of offshore systems… are themselves benefiting from it,” said Ryle of the ICIJ. “So there’s no incentive for them to end it.”

In the coming week, we will learn more from the Pandora Papers. For example, there are 130 global billionaires with ownership entities in secrecy jurisdictions. In 2021, 100 of them had total assets worth more than $600 billion.

U.S. citizens are under-represented in these leaks, largely due to where the service providers were located. No U.S. wealth-advisory firms were part of the leaks. Nonetheless, over 700 companies revealed in the Pandora papers have ties to beneficial owners connected to the United States.

We will also learn more about how the United States has become a global destination for global wealth, some of it ill-gotten. The Panama Papers, the Paradise Papers (Bermuda and Singapore), and Luanda Leaks (Angola) all reinforced the misperception that most of these financial shell games take place “off shore,” in secrecy jurisdictions and tax havens in small countries with weak banking laws.

But the Pandora Papers show that the United States and states like South Dakota now rival notoriously opaque jurisdictions in Europe and the Caribbean in financial secrecy. The states with the most active trusts were South Dakota (81), Florida (37), Delaware (35), Texas (24), and Nevada (14).

Findings suggest that South Dakota has sheltered billions in wealth linked to wealthy individuals previously accused of serious financial crimes and labor violations. Two examples: Brazilian orange juice baron, Horst Happel, was fined $88 million in 2016 for underpaying his workers. In 2017, he moved substantial wealth to a trust in South Dakota. Carlos Morales Troncoso was the former vice-president of the Dominican Republic. He ran a sugar company called Central Romana sugar company that was accused of human rights violations. He set up trusts for his daughters in the Bahamas that were moved, after his death, to South Dakota. The reason global money is flowing to the “Mount Rushmore State” is because of their low taxes and advantageous dynasty trusts.

The Pandora Papers will hopefully boost momentum in the U.S. Congress behind a progressive tax plan to fund the Build Back Better program — including money for IRS enforcement to ensure the wealthy pay their fair share.

As The Guardian notes, “in a development likely to prove embarrassing for U.S. President, Joe Biden, who has pledged to lead efforts internationally to bring transparency to the global finance system, the United States emerges from the leak as a leading tax haven. The files suggest the state of South Dakota, in particular, is sheltering billions of dollars in wealth linked to individuals previously accused of serious financial crimes.”

Pandora Papers – Pandora’s Box and people

Farooque Chowdhury

Pandora Papers is not the entire Pandora’s Box; but a part of it only. The full picture is yet to emerge, in one sense, and in another sense, the whole is already perceptible.

The way the rich have their wealth, the way they accumulate, the way they hide, the way they deceive, the way they deprive, the way they lie are in the Pandora Papers. It’s not a tale of only a king, of a few powerful and a few politicians – a section of seemingly magicians. The Papers, as like their earlier friend, Panama Papers, convey a single fact: Exploitation, an exploitative system, the system’s power.

If that wealth of the rich is compared with the “wealth” the poor of the world own, if that power is compared with the “power” the poor of the world “wield”, the inequality’s brutality stands under sun – open, stark, it’s barbaric. The lie, the deception are two of the sharpest, most effective and functional weapons the rich employ against the people, the working people – the social force that produces the wealth at societal level but stolen by the rich.

Whose hands are behind the exposure – is not the only question related to the exposure. The exposure explains itself – the exposure is a part of factional fight among the wealthy at world level. But, the question that should also be in agenda is the system itself – what and how is the system that gives birth to such rich, such theft, such deception, such lie? The question that should also be in agenda is the “wealth” and “power”, if any, and even, if non-existent, of people, the poor, especially the working persons producing wealth and being deceived by the wealthy. The question that should also be in agenda is the relations between such wealth and power, essentially political power, used to do misdoings – theft, lie, deception. This is the question of inequality of political power – the question missed most of the time by most of the mainstream economists discussing inequality. An amazing business it’s!

There’s law, a gamut of law; and the purpose pronounced powerfully and forcefully behind enacting the gamut of law is execution of justice, execution of equity, kick out theft and deception. All the business the Pandora Papers show is an execution of law – the way it’s executed. No enactment could prohibit the deception. Whatever was done by the rich – floating of companies, transfer of money or capital, etc. – was by faithfully following all laws. The system of law, so, can’t escape the very question – what were you doing Sir when such a great business with such a great amount of money was transacted? Are you ineffective or a party to it? A sleeping partner, are you? Has this been enacted only to hoodwink the ordinary tax payers, the person begging on a street in Karachi, the mother with her hungry children in Lebanon, the person searching for medical treatment in a dysfunctional health care system in a capitalist economy that accumulates profit from the health care system it has elaborately set up?

There are executioners of law enacted to stop theft and “flying away” of capital. There’s supervisory authority keeping eyes open so that all laws related to theft and deception are executed properly. What were these executioners and supervisory authority doing while the theft, the deception – dodging taxes – were carried on by the rich with smile in their faces? Are they, the executioners and the supervisory authority, thus, party to this great job? They are part of the system of taxation and ensuring proper implementation of taxation, revenue, etc.; and thus, haven’t they made the system party to the lie, deception, dodging of tax, loss of revenue? Who the criminals will be, then?

Politics was obviously there behind these thefts, deceptions. Without political clout this system couldn’t have operated, couldn’t have operated for months and years, and thefts, the dodging of taxes, weren’t done in a day, weren’t done once, weren’t done by a single person.

These are difficult questions – difficult to the powerful, the owners of the system that creates and sustains with loopholes to lie, to deceive, that sustains with unequal political power sharing between the exploiter and the exploited.

These are questions unknown to the unaware, to the disorganized, to the political-powerless millions – the masses struggling with hunger in Afghanistan, struggling with poverty in Brazil, struggling with inequality in Nigeria.

But, these questions, instead of superficial and trivial issues, should reach them. But, these questions, in most cases, don’t reach them. The facts are hidden from them – the millions whose labor is stolen by a few.

Thanks to the exposure or the factional fight, whatever that’s. It has provided some facts – facts to understand the system, not only loot, not only theft – dodge tax. The Papers has opened up the powerful’s Pandora’s Box – a system full with theft, deception, lies, and inequality.

Loot – appropriation and expropriation – the exploiters continue with, tricks they follow and lies they propagate to hide their loot, agents they employ to keep people demobilized, to make people fail perceiving the loot-facts and sources and relations of the facts get exposed everyday if the exploiters’ acts and pronouncements are closely observed.

To keep the power of loot intact, the exploiters’ first tact is to wipe out the question of appropriation and expropriation from discussion, and stuff whole agenda with whatever rubbish they produce and collect. This move distracts the exploited, the part of society falling prey to the exploiters, keeps the exploited busy with issues not related to the existence of the exploited, serve the exploiters’ interests, make the exploited get busy with the agenda helpful to the exploiters. The question of loot withers away, thus.

The question of loot is connected to the question of the exploiters’ economic interests – dominance of exploitative system. The question of loot is connected to the question of the relations the exploiters establish – exploitative relations with private property – in the sphere of economy. Private property – capital, made by reproduction of surplus value as a result of exploitation of wage labor, “not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character.” (Marx, Capital, vol. III) – is part of the economy. The question doesn’t move without politics – politics of the exploiters. The entire question withers away when these aspects don’t find place in agenda.

It’s regularly, thus, observed in most lands: these questions, essential and urgent to people, regularly go without discussion while questions related to people – of economy and politics – are discussed. Non-essential questions, questions related to the exploiters interests, questions serving the exploiters are discussed in a manner and with such force that push back questions related to people’s interests.

Here’re the tricks the exploiters employ: overwhelm the exploited with problems, so that people don’t get respite – the space required to summarize the hostile situation; make non-questions questions, engage adventurers with the task of raising fiery slogans instead of proper analyses and well-thought out ideas – a task that subverts people’s initiatives for having well-composed ideas and getting organized. A tricky job it’s. The adventurers turn “friends” and “well-wishers”, theoreticians advocating measures that torpedo people’s initiatives, and at the same time, camouflage self-face.

There’re persons subverting organizations people have or whatever initiative people take to claim space while the persons pose as friends of people. Engaging such persons is one of capital’s tasks to counter people. The engaged persons hide self-identity, in the payroll of masters, and spread lies, misinterpret and create confusion.

The question is: What should people do in this perspective? History presents lessons: Get aware, get organized, have organization, have leadership, foil attempts subverting people’s initiatives.

More than 7 million people in Germany in precarious employment

Elisabeth Zimmermann

More than 7 million people in Germany work in “atypical” or precarious jobs, that is, just under 21 percent of the country’s 33.4 million workforce. These figures are the result of a special analysis by the Federal Statistical Office (Microcensus 2020) carried out at the request of the Left Party parliamentary group in the Bundestag.

The Federal Statistical Office counts temporary and contract work, marginal employment such as mini-jobs, part-time work with contracts of less than 20 hours per week, and fixed-term employment as “atypical” employment. These jobs are invariably low paid, with incomes barely sufficient for a person to live on. In addition, such workers face the constant uncertainty as to whether or not their fixed-term employment contracts will be extended. Medium- and long-term planning for their lives are impossible.

Gorillas delivery service drivers in Berlin vote on protest action

When one adds the 4.5 million part-time workers with more than 20 hours per week, whom the Federal Statistical Office does not count as “atypical” employees, a total of 11.5 million male and female workers do not work in so-called normal jobs. This means that one-third of the workforce is engaged in part-time and/or precarious work, far more than previously suspected.

The growth of the precarious labour sector in Germany to one of the largest in Europe is primarily the product of the anti-welfare Hartz laws introduced by the former Social Democratic Party/Green Party coalition (1999–2004) led by Gerhard Schröder (SPD). The legislation passed by the Schröder government has led to a massive increase in social inequality.

Other studies show a strong concentration of the low-wage sector in different regions. A recent publication by the German Trade Union Federation (DGB) in Berlin-Brandenburg illustrates the extent of the low-wage sector in the capital city and its surroundings. The DGB study is based on an evaluation by the socio-economic panel (SOEP) and covers the years from 2017 to 2019.

During this period, an average of 375,000 people in Berlin worked in the low-wage sector, 24.3 percent of the working population. In Brandenburg, the figure was around 280,000, a share of 27.7 percent. The hourly wage in this sector was below €11.13, less than two-thirds of the average gross hourly wage and little more than the statutory minimum wage of €9.60.

The study also shows that foreign-born workers are disproportionately affected by low-wage work. In Berlin, the percentage of low paid immigrant workers is 30.5 percent, in Brandenburg 65.4 percent. More than half of semi-skilled and unskilled workers are making low wages in Berlin and 73.2 percent in Brandenburg. In Berlin, 85.2 percent of so-called “mini-jobbers” are low wage, while 90.9 percent are low wage in Brandenburg. Similar conditions prevail in other regions with equivalent levels of high social inequality.

The country’s trade unions and the DGB bear a significant share of responsibility for the development of this huge low-wage sector. They have sat, and continue to sit, on all the commissions that produce this type of insecure employment and the low minimum wage. Large corporations and businesses use outsourcing to subcontractors or temporary work agencies to lower wages and worsen working conditions for thousands who used to be employed on a regular basis.

Industries with the most low-wage workers include retail, with a 16.1 percent share in 2019; food services, 9.2 percent; building services, 9.1 percent; health care, 8.5 percent; and education, 4.8 percent. The figures are based on a study by the Institute for Work and Qualification (IAQ Report 2021-06), as reported in the Tagesspiegel newspaper in early September.

Workers in the low-wage sector are also particularly at risk of contracting COVID-19 due in part to job insecurity and cramped living conditions. At the same time, these workers also suffer disproportionately from pandemic-related job and income loss. The high number of workers in atypical jobs is also a major reason for the rise in poverty among retirees.

At the same time, wealth is increasingly concentrated at the top of society. The richest 1 percent of the population owns as much as the poorest 75 percent. While wealth at the top has grown enormously via the multi-billion coronavirus programs of the European Central Bank and the federal government, there is supposedly no money for the working class and the poor. On the contrary, the money that has been poured down the throats of the rich is to be squeezed out of workers through increased exploitation.

One indicator of the obscene wealth at the top is the recent Wealth-X report, which says that the global pandemic has led to an unprecedented accumulation of wealth among the most privileged strata of society. The global number of dollar billionaires rose above 3,000 for the first time in 2020. Their average wealth is $1.9 billion, and their total wealth is $10 trillion, an increase of 5.7 percent since 2019.

“Taken as a whole, the global pandemic has delivered an unexpected windfall to billionaire wealth, amplified by the flood of financial incentives and swelling profits in key sectors of the economy that has spawned a new wave of younger, self-made billionaires,” the report says.

First place in the country chart for billionaires is the US, followed by China in second place and Germany in third. In Germany the number of billionaires increased by 13.7 percent to 174 during the 2020 pandemic year, and their total wealth grew to $515 billion.

Merck announces promising new pill to treat COVID infections

Benjamin Mateus

On Friday morning, Merck, the pharmaceutical giant, announced significant positive results for their antiviral drug Molnupiravir (EIDD-2801) to treat people infected with early COVID-19 experiencing mild to moderate symptoms. According to the press release, their “oral antiviral” drug reduced the risk of hospitalization and death by around 50 percent.

In fact, the phase three trial was stopped early on the recommendation by the independent data monitoring committee, in consultation with the Food and Drug Administration (FDA), on these significant findings. The oversight committees are responsible for the conduct and integrity of such trials. If during a planned interim analysis of the data the review committee finds the drug to be efficacious, it can recommend stopping the trial, as not to further delay using these drugs that can benefit patients.

Molnupiravir, an antiviral pill (shown) made by Merck to treat COVID-19 may keep newly diagnosed people out of the hospital and prevent deaths. (Merck Sharp & Dohme Corp)

The analysis showed that the COVID-19 pill reduced hospitalizations and death down from 14 percent in the group taking a placebo to 7 percent in those that were given the active ingredient. When the interim data was broken down further, the reduction in hospitalizations was only 39 percent. But more impressive was the reduction in deaths, from eight in the placebo group to zero taking the actual medication.

The final analysis of all the data is anticipated shortly and peer-reviewed publication of the report will be important to ensure confidence in the process. But such a development is welcome news and an urgently-needed addition to the fight against the coronavirus. It is only an addition, however, and no substitute for an aggressive campaign to eradicate the virus using every possible public health measure, including lockdowns.

Merck has indicated they have already proceeded with an application to the FDA to obtain emergency use authorization (EUA). Pending this approval, the positive findings mean that there is now, for the first time in the course of the pandemic, a COVID-19 treatment that can be administered by mouth. The pharmaceutical company expects to produce 10 million treatment courses by the end of the year and many more doses in 2022.

In June 2021, the Biden administration signed an agreement with Merck for 1.7 million courses of treatment (one pill twice a day for five days) for a total price tag of $1.2 billion, or $700 for each course. The drug is expected to generate revenues up to $7 billion by year’s end. The company has said it has agreements with several governments but has not shared these details. As it stands, Molnupiravir will be catapulted into the profit stratosphere as one of the most lucrative drugs ever made.

An effective oral antiviral treatment is a game-changer. Ease of delivery and storage makes it ideal in a situation when there can be considerable delay in symptom onset and confirmatory testing of COVID-19. Both Remdesivir (a broad-spectrum antiviral drug) and Regeneron (a monoclonal antibody) must be administered intravenously, requiring skilled health care workers and additional supplies. Remdesivir’s data has also been criticized for tepid results in three trials that suggest it only modestly improves time to recovery by a few days. In brief, the phase three MOVe-OUT trial was an international randomized, blinded study that compared Molnupiravir to a placebo in non-hospitalized adults diagnosed with mild to moderate COVID-19. Patients had to have one or more risk factors associated with poor outcomes. Symptom onset could not have lasted for more than five days to participate in the trial. The primary endpoint was the percentage of participants who were hospitalized and/or died through 29 days after being randomized into the study.

The main risk factors for severe disease among subjects were obesity, age at or over 60, diabetes, and heart disease. The Delta, gamma, and Mu variants accounted for 80 percent of sequenced infections. With more than 170 sites involved, 55 percent of participants were from Latin America, 23 percent from Europe, and 15 percent from Africa. The adverse effects of the medication were comparable to the placebo arm of the trial. Fewer people discontinued their treatment in the Molnupiravir arm than in the placebo group.

In the early stages of the pandemic, in the effort to find anything that could work to treat infected patients, many older drugs sitting on laboratory shelves and benches were resurrected and tested for their response against SARS-CoV-2. In this regard, Molnupiravir, a broad-based antiviral drug, was as likely a candidate as any. It proved to provide impressive results against the coronavirus in human lung cell cultures.

Molnupiravir (EIDD-2081) has, like many chemical compounds, a convoluted history. Several years before the pandemic, Emory University was awarded a $10 million contract through the Defense Threat Reduction Agency to develop new drugs to treat infections caused by emerging and fabricated viral threats—in other words, it originates as a byproduct of the Pentagon’s germ warfare program.

According to an article published in Chemical & Engineering News on May 5, 2020, Dr. George Painter, director of the Emory Institute for Drug Development, and his team screened molecules that were analogues to those used in antiviral drugs, seeking a compound that had a high barrier to resistance, which means that despite a virus’s ability to mutate, the drug would remain effective. Also, the molecule had to penetrate the blood-brain barrier because these viral threats attacked the brain.

Their efforts zeroed in on an obscure molecule called N4-Hydroxyctidine (NHC), which they dubbed EIDD-1931, which had broad and intriguing antiviral properties that seemed to fulfill each of their requirements. It had first been looked at in the 1970s by Russian and Polish scientists working on treatment against smallpox infection. Subsequently, many laboratories had used the compound in their experiments on elucidating viral replication mechanisms.

Once the molecule is incorporated into the RNA by the virus’s replicating enzyme, NHC is recognized as either Cytidine or Uracil (two of four nucleotides in the building blocks of RNA). In other words, NHC can exist, through a chemical reaction called tautomerization, as two forms rapidly flipping back and forth from one to the other. When the virus attempts to replicate again, multiple errors are incorporated as a result of the change in forms in NHC during RNA strand replication, leading to a lethal mutation that leaves the virus unable to infect or reproduce.

The researchers also found the drug had tremendous activity against coronaviruses, including SARS and MERS in mice and dog animal models. However, testing in monkeys revealed it was getting trapped in the cells that line their guts and unable to fight the infection, making its potential use in humans problematic. This then led to the current prodrug formulation, EIDD-2081, that allows the drug to reach the bloodstream before metabolizing to its active form.

It was in early 2020, when the team from Emory University was considering a new drug application with the FDA for EIDD-2081 as a treatment for influenza, that the outbreak in Wuhan, China, began making the front pages of every news channel across the globe.

In early March 2020, EIDD-2081was tested in human cell cultures infected with SARS-CoV-2 and proved exceptionally adept at stopping viral replication. It was also effective at killing the viruses that became resistant to Remdesivir. Virologist Juliet Morrison of the University of California, Riverside, commented at the time that the cell culture studies had been very promising. Still, if these drugs are to work in people, they would need to be administered early in the course of an infection. The team moved quickly to get EIDD-2081 into clinical studies.

On March 19, 2020, Miami-based Ridgeback Biotherapeutics, founded in 2016 as a company focused on developing therapies against emerging infectious diseases, licensed EIDD-2081 from Emory for an undisclosed amount, according to the Washington Post.

The Post wrote on June 25, 2020, “But what the tiny Miami company did have was a growing team with experience in pharmaceutical development and research and a willingness from its wealthy owners—chief executive Wendy Holman and her husband, hedge fund manager Wayne Holman—to place a bet on the treatment in the midst of the coronavirus pandemic. That wager paid off with extraordinary speed in May when, just two months after acquiring the antiviral therapy called EIDD-2081 from Emory, Ridgeback sold exclusive worldwide rights to drug giant Merck.”

As Dr. Aaron Kesselheim, a physician at Brigham and Women’s Hospital in Boston and specialist in drug development, noted at the time, “I would think that universities … would not normally transfer products to basically a house flipper. I wouldn’t think they would have to engage with speculators, like it appears that Ridgeback Biotherapeutic is.”

As significant as the positive data released on Merck’s COVID pill is, it begs the question why it has taken so long to initiate and conduct these trials? Clearly there had been little hope placed in pharmaceuticals for the treatment of COVID. Additionally, the vaccines were at the front and center of the response to the pandemic. It is certain more information will be forthcoming in the weeks and months ahead, but it would be safe to assume that financial deliberations were behind these maneuverings.

In this competition, much is currently in advanced development. Pfizer has recently commenced a large phase 2/3 trial testing their investigational oral antiviral agent, a novel protease inhibitor (PF-07321332). Meanwhile, Roche reported in mid-August that they were making amendments to their phase two trial with their experimental drug AT-527, which has been shown to reduce viral replication in hospitalized patients.

However, caution needs to be raised that the antiviral pill and the next generation of therapeutics are not a panacea and do not obviate the need for a global eradication strategy. The ruling elites will now further mobilize their efforts to push to make the virus endemic. Meanwhile, all federal and state public health measures are being abandoned and privatized. The COVID pandemic has provided the impetus for the complete abrogation of all responsibility by the government for the safety and well-being of its population.

Facebook platforms shut down by worldwide outage

Kevin Reed

The entire network of services and apps owned by Facebook was shut down for hours worldwide on Monday beginning at approximately 11:40 a.m. Eastern time.

Users reported that the company’s platforms Facebook, Instagram, WhatsApp, Messenger and Oculus initially displayed error messages and then became inoperable. In the case of Facebook, which has nearly 3 billion monthly active users internationally, the platform was reported to have “disappeared from the internet.”

The Facebook logo is displayed on an iPad (AP Photo/Matt Rourke)

The impact of the shutdown was felt around the world where, in some countries like Myanmar and India, Facebook is synonymous with the internet. Some of the apps, such as WhatsApp and Messenger, are the primary means through which billions of people communicate with family and friends each day. Some businesses that rely upon Facebook for marketing and sales promotion were unable to operate.

Meanwhile, due to its dominance in the social media marketplace, Facebook is used by people to sign into other apps and services and manage their accounts, such as shopping websites, business software, news sites, smart TVs and other internet-of-things connected home appliances and electronic devices.

The shutdown also paralyzed nearly all of Facebook’s internal business and employee communications systems and left the staff in the position of having to use text messaging and other alternatives in order to work on a solution to the problem.

New York Times tech reporter Sheera Frenkel tweeted that a Facebook staff person told her over the phone that employees were “unable to enter buildings this morning to begin to evaluate extent of outage because their badges weren’t working to access doors.”

Associated Press (AP) reporter Phillip Crowther tweeted, “Source at Facebook: ‘it’s mayhem over here, all internal systems are down too.’ Tells me employees are communicating amongst each other by text and by Outlook email.”

At 12:22 p.m., Facebook tweeted a message that downplayed the extent of the outage: “We’re aware that some people are having trouble accessing our apps and products. We’re working to get things back to normal as quickly as possible, and we apologize for any inconvenience.”

At 6:33 p.m., the company followed up with another tweet: “To the huge community of people and businesses around the world who depend on us: we’re sorry. We’ve been working hard to restore access to our apps and services and are happy to report they are coming back online now. Thank you for bearing with us.”

As of this writing, all of the primary apps—Facebook, WhatsApp, Instagram and Messenger—were back online. While Facebook has yet to report the cause of the outage, no evidence has been presented indicating that the failure was the product of malicious activity.

The AP reported that Facebook’s outgoing chief technology officer, Mike Schroepfer, tweeted “sincere apologies” to everyone impacted by the outage and placed the blame on “networking issues.”

The news agency also interviewed Doug Madory, director of internet analysis for Kentik Inc, a network monitoring and intelligence company, who said the cause of the outage appears to be related to the deletion of basic data “that tells the rest of the internet how to communicate with its properties. Such data is part of the internet’s Domain Name System, a central component that directs its traffic. Without Facebook broadcasting its location on the public internet, apps and web addresses simple could not locate it.”

The Verge reported that “Cloudflare senior vice president Dane Knecht notes that Facebook’s border gateway protocol routes— BGP helps networks pick the best path to deliver internet traffic—were suddenly ‘withdrawn from the internet.’”

J. Eckert, VP of Ecosystem at blockchain platform Chia, tweeted, “This Facebook outage is a WAY bigger issue than I think some realize, or they are willing to admit. Their entire DNS record has been wiped from the internet across all root servers. Either the most sophisticated & coordinated hack of all time, OR the biggest human error ever.”

Forbes reported late Monday afternoon that the Facebook outage played a role in the decline in the value of company shares of 4.8 percent or a wipeout of approximately $117 billion. The decline also translates into a drop in the personal fortune of founder and CEO Mark Zuckerberg of $5.9 billion.

A lost day for Facebook also means a loss of $330 million in its marketing services revenue.

There was also pressure building against the value of Facebook stock from a whistleblower leak of internal company information and criticism by former employee Frances Haugen who said during a “60 Minutes” interview broadcast Sunday that there is a corporate culture of putting “profits over people.”

The whistleblower story, called “The Facebook Files,” was broken by the Wall Street Journal—a publication that has devoted all 132 years of its existence to putting “profits over people”—and exposed that company executives were focused on growth at the expense of the public good. Haugen provided internal Facebook documents including ones that show the company’s own research demonstrated the platform magnified hate and misinformation and was harmful to mental health.

The shutdown of Facebook and all of its associated platforms on Monday has revealed the dependence of billions of people on the stability of online social networks for critical daily tasks of a personal, social and professional character.

Protests expand in Polish health care system

Martin Nowak & Clara Weiss

Protests in the Polish health care system have entered their fourth week. On September 11, at the initial demonstration, 40,000 workers from all sectors of the health care system took to the streets in Warsaw alone. This was triggered by the government’s announcement to postpone the increase in the health care budget and not to increase spending to 7 percent of GDP until 2027. On September 17, the corresponding law was passed in the Sejm (parliament). According to this, the budget is to increase by only 85 billion złoty (around 19 billion euros) over a period of six years—an almost insulting sum in view of the catastrophic conditions in the health care system and the pandemic.

Protesting nurses in Poland

Poland’s health care system is notorious for its low wages, acute staff shortages and miserable working conditions. For example, nurses earn an average of 3,000 złoty net per month, or about 659 euros. Many employees, and especially doctors, depend on having several jobs, both to make ends meet but also to maintain basic services in many regions.

Paramedics, in particular, who have been calling in sick en masse for months, are at the centre of the protests. Last Friday, for example, half of all ambulances in Gdansk were not in service due to the lack of personnel. In parallel, the university hospital in Zielona Góra stopped emergency room operations for several hours due to lack of staff. In Poznań, 65 percent; in Włocławek, 70 percent; and in Płock, 80 percent of the staff were absent, according spokespersons for the protests, and they are expected to continue until October 10.

The local government then tried to use paramedics from the fire department and the army as strike breakers. However, they refused to sign the prepared contracts.

According to Newsweek Polska, Polish paramedics, most of whom have to endure 24-hour shifts, work an average of 300 hours of overtime a year. The gross hourly wage of a paramedic in Warsaw is just 24 zloty (5.25 euros).

Meanwhile, protests are spreading to other areas. For example, medical students and health care trainees have announced protests in several cities on October 9 under the slogan “Młodzi z Medykami” (Youth with Doctors). In many cases, doctors are also quitting their second or third jobs in order to reduce their exorbitant working hours. This has led to the closure of wards in many places, including the Institute of Psychiatry and Neurology in Warsaw.

About 60 percent of all Polish physicians work in more than one institution and that on a full-time basis. The sad record holder is said to be a doctor from Łódź who worked 620 hours a month. Exhaustion and lack of concentration due to chronic fatigue pose an enormous danger not only to patients. For example, a 39-year-old anaesthesiologist from Wałbrzyc who, according to colleagues, had worked 96 hours a week due to a lack of staff, died at the end of August.

In the meantime, employees of the judicial system, who had also already demonstrated in September against their low wages and high workload, have also set up a “red city” next to the previous “white city” of medical professionals.

The disastrous conditions in the Polish health care system are a direct result of the restoration of capitalism by the leaders of Solidarity and the former Stalinist regime. The deregulation and privatization that followed were further exacerbated when Poland joined the EU in 2004. Even before the coronavirus pandemic, life expectancy differed by about 10 years between Western and Eastern Europe.

In addition to poverty wages, the health care system is plagued by an acute shortage of personnel. For example, according to the Supreme Medical Association, more than 10,000 physicians left the country between 2004-17 alone. One in four working surgeons is actually already retired. Due to declining birth rates, migration and the closure of medical schools and universities, the number of medical students alone shrank from 6,310 in 1987 to 2,070 in 2000. By 2020, the number had risen to over 5,000 for the first time. The Ministry of Health stated that tens of thousands more doctors would be needed than are being trained to compensate for age-related shortages in the coming years.

The situation is equally dramatic for the approximately 225,000 Polish nurses. With an average age of 53, a massive shortage of personnel means it is already almost impossible to provide secure nursing care, and here, too, tens of thousands of new recruits would be needed every year.

The pandemic has exacerbated all these problems, which have been worsening for decades. Up to now, over 75,000 have died of COVID-19 in Poland, including 500 health care workers. Yet the wave of the Delta variant is only beginning to arrive in the country. The Ministry of Health is now regularly reporting more than 1,000 new infections a day after the infection rate dropped to single digits in the summer.

So far, only about 20 million Poles are fully vaccinated, about 51 percent of the population, while one in four has no vaccine protection at all. Professor Andrzej Pławski of the Polish Academy of Sciences therefore warns of another 40,000 deaths by the end of the year from COVID-19. Although Health Minister Adam Niedzielski expects 5,000 new infections daily as early as the end of October, he categorically rejected new nationwide restrictions and lockdown measures.

The health care protests are developing within the context of a highly explosive class struggle in Poland and internationally. Major strikes by workers in the auto industry, health care and railroads have also occurred in the US and Germany in recent weeks. In Poland, in addition millions of public sector workers, including teachers and judiciary employees, are demanding a 12.5 percent wage increase.

Also, in view of the decision to phase out coal, struggles by around 100,000 coal miners are imminent. Energy prices in particular have been rising rapidly for months, while the inflation rate stands at 4 percent. As social discontent grows, the journal Polityka recently warned of a “hot autumn” and mass strikes and protests in numerous industries.

The ultra-right government of the Law and Justice Party (PiS) has adopted a provocative and uncompromising attitude toward workers.

To this day, it refuses even to send Prime Minister Mateusz Morawiecki to the negotiating table, as demanded by the protesters in Warsaw, and has refused to make even the smallest concessions in negotiations with the unions, openly resorting to delaying tactics to wear down the workers. The PiS has also taken a tough stance in talks with public sector unions.

The PiS government is hated by large sections of the population and has been in deep crisis, especially since the mass protests against the new abortion law. In opinion polls, the PiS electoral alliance, which won an absolute majority by advocating populist measures in both 2015 and 2019, currently has only 35 percent support. Recently, massive conflicts in the coalition have arisen over disputes with the EU, and there are growing rumours of preparations for a “plexit,” or Polish exit from the EU.

Under these conditions of growing class conflict and enormous political instability, the trade unions are the mainstay of the Polish bourgeoisie and are desperately trying to prevent the development of a broad working-class strike movement. Despite the openly provocative attitude of the government, the National Strike and Protest Committee, composed of various trade unions and professional associations in the health care sector, continues to hold inconclusive negotiations with the government and intends to continue them at least until October 7.

In doing so, the only practical action organised by the committee is the “Białe miasteczko 2.0” protest camp in Warsaw (White City 2.0); most of the other actions by doctors and paramedics to expand the protests seem to have developed independently of the unions.

There is no doubt that a sellout is being prepared behind closed doors. Some unions have even begun it. On September 21, for example, the government signed an agreement with the union for paramedics (OZZRM) and the respective employers’ association (SP ZOZ). The core of the agreement is a 30 percent travel allowance on top of wages and a minimum wage of 40 złoty (about 8.74 euros), for some of the paramedics. There were angry comments both among those at the protest camp and on OZZRM’s Facebook page. For example, Piotr, a paramedic from Szczecin wrote, “their agreement is worthless” and “the community was sold out.” The supreme chamber of pharmacists has also already concluded a separate agreement and likewise left the protest alliance.

Above all, the unions are systematically trying to prevent the workers’ struggle from expanding either within the health care sector or beyond. The OPZZ union confederation has so far remained entirely silent, although most teachers are organized within it. In 2019, the unions, working closely with the liberal opposition PO (Civic Platform) party, sold out a nationwide teachers strike, thus saving the PiS government from its fiercest threat yet from the working class.

The unions and associations organized in the National Strike and Protest Committee also have a long history of selling out struggles. For example, the nurses and midwives union OZZPiP, like the entire FZZ union federation, has close ties to both government and opposition parties. Leading trade unionists, such as Lucyna Dargiewicz or Dorota Gardias, ran for office on lists of the PiS or the ex-Stalinist Social Democratic Party of Poland (SDPL).

The doctors union, PR OZZL, for example, ended its protest, accompanied by hunger strikes, in 2018 for measly concessions that included limiting an increase in health care spending to 6 percent of GDP by 2024. For the protesting doctors association “Porozumienie Zielonogórskie,” Marek Twardowski, a representative, even joined Donald Tusk’s PO government in 2007.

The COVID pandemic and the supply chain crisis

Nick Beams

One of the characteristics of a ruling class that has completely exhausted any progressive, historical role it might once have had, is its inability to deal with major problems in society, because of its insistence that nothing can be done that would impinge on its wealth.

A worker checks a fuel tanker at Buncefield Oil Depot near Hemel Hempstead, England, Monday, Oct. 4, 2021. Britain is facing fuel shortages due to a lack of HGV drivers able to deliver fuel to petrol stations. (AP Photo/Alastair Grant)

This phenomenon, clearly visible on the eve of the French revolution of 1789 and the Russian revolution of 1917, is again on display, with even greater force, in the COVID-19 pandemic.

The eruption of this deadly virus almost two years ago required a globally coordinated response, mobilising the resources of society to eradicate it. It has been estimated by epidemiologists that had such measures been adopted, COVID-19 could have been eliminated within a matter of weeks.

However, the focus of governments was not on science and the measures it called for. It was directed to the stock market—the money-making machine that has lifted the wealth of the financial and corporate elites to stratospheric heights at the expense of the needs of society, ranging from the provision of social services, such as health care and education, to basic infrastructure such as roads, ports and a transportation system capable of sustaining and developing a globally integrated economy.

From March 2020, the policy of the ruling classes has been guided by the dictum, “The cure cannot be worse than the disease.” That is, nothing can be done that will in any way impinge on the rise of the markets. Trillions of dollars were supplied by the US Fed and other central banks to ensure this.

But there was an inherent contradiction in this policy. The more the demand for opening the economy was pursued, the more the virus was able to spread and develop even more infectious variants, such as Delta, which would never have emerged had a policy of eradication been undertaken at the outset.

The Fed was able to print money to boost the stock market and increase the mountain of fictitious capital, but none of that cash went towards developing the underlying real economy, nor could it.

Now that contradiction has led to the eruption of a crisis, in the form of a protracted and worsening disruption of global supply chains, the vast and complex system of production and transport that is at the base of the global economy.

It began with the supply of computer chips, necessary for auto production and other industries, but has now extended across the board. This crisis is most apparent in the US economy—the world’s largest—particularly in the port of Los Angeles, but is manifest around the world.

As an article published over the weekend in the Washington Post put it: “The commercial pipeline that each year brings $1 trillion worth of toys, clothing, electronics and furniture from Asia to the United States is clogged and no one knows how to unclog it.”

Severe weaknesses in the transport system have been revealed, including shortfalls in investment at key ports, cuts in the rail system and the chronic failure of key participants in the system to collaborate. The Post cites one person who has advised government agencies as saying: “It’s like an orchestra with lots of first violins and no conductor… No one’s really in charge.”

The myopia of the ruling classes was highlighted by a recent article in the Guardian on the supply chain crisis.

“It was all going so well,” the article began. “Successful vaccinations were driving the post-pandemic recovery of the global economy, stock markets were back at record highs, and prices were rising just enough to make deflation fears a thing of the past.”

Now the supply chain crunch, which started with computer chips, is “morphing into a full-blown crisis featuring a shortage of energy, labour and transport, from Liverpool to Los Angeles, and from Qingdao to Queensland.”

Los Angeles, the entry point for more than a third of all imports to the US, is at the centre of the crisis. At the beginning of September, according to the Post, there were 40 container ships waiting for a berth. Less than three weeks later the number had risen to 73.

But as with the situation in hospitals around the world, impacted by decades of cuts, the crisis was foretold. In 2015, regulators warned: “Congestion at ports and other points in the nation’s intermodal system have become a serious risk factor to the relatively robust growth of the American economy, and to its competitive position.”

The problems are not confined to the ports, but extend to the rail system. The workforce at Union Pacific, now at 31,000, is one-third smaller than it was in 2015, representative of cuts that have taken place across the US rail system. And the problems in rail impact on truck transportation, with drivers having to wait for hours in their rigs to pick up containers to which they have been assigned.

Costs are rising rapidly. As the Post article reported, the median cost of shipping a container from China to the US West Coast hit $20,586 last month, almost double the level in July, which, in turn, was twice the cost in January.

But wherever there is a problem, there is a profit to be made. The seven largest ocean carriers have reported $23 billion in profits for the first half of this year, compared with $1 billion for the same period last year.

The eruption of a supply chain crisis, however, is not going to bring about a course correction to deal with its underlying cause—the COVID-19 pandemic—through a program of global eradication.

Rather, the blame is being placed on the limited, but totally ineffective, measures that have to date been carried out. Worldwide, the demands are growing from corporate and financial circles that even limited mitigation measures be scrapped.

This global push was highlighted at the end of last month, when the International Chamber of Shipping joined with other transport employer groups, and the International Transport Workers Federation, an association of trade unions headed by the national secretary of the Maritime Union of Australia, Paddy Crumlin, to issue an open letter calling for an end to all COVID-imposed transport restrictions.

The open letter called on governments and UN agencies to ensure the free movement of transport workers, and “end travel bans and restrictions that have had an enormously detrimental impact on their wellbeing and safety.”

The letter cited the “crumbling global supply chain” and called for “meaningful and swift action to resolve this crisis now.” But the health with which this unholy alliance is concerned is not that of the workers, but of the corporations. The policy on the pandemic is to let it rip.

As is always the case with half-baked, would-be reformist measures, the inevitable failure of the so-called mitigation policy has opened the way for the right-wing agenda.