Rising prices and falling wages deepen UK cost of living crisis

Simon Whelan

Rapidly rising prices and wages failing to keep pace with rising inflation have resulted in a what has been dubbed by the media a “cost living crisis” for British workers.

UK household incomes could be down £1,000 next year, according to analysis by the Resolution Foundation think tank, as rising prices combine with welfare benefit cuts and rising taxes. The Institute for Public Policy Research says a typical family will lose £500 a year because of the planned increase in national insurance taxes and an expected 5 percent rise in council tax.

The Office for National Statistics (ONS) says the consumer prices index eased to 3.1 percent, from 3.2 percent in August and fell back slightly in September too. However, before August, the last time overall inflation was at 3.1 percent or higher was back in 2017, and the ONS warns upward pressure on living costs continues.

Chancellor of the Exchequer Rishi Sunak leaves No 11 Downing Street to deliver his 2021 Budget to the House of Commons. 27/10/2021. (Picture by Luca Boffa / No 10 Downing Street/FlickR)

The current hiatus in the CPI measure of inflation is temporary. Conservative government Chancellor Rishi Sunak acknowledged in this month’s budget that CPI, which doesn’t include rising housing costs, would top 4 percent next year. Capital Economics described the present period is “the lull before the storm”. The economic research consultancy believes inflation could reach 5 percent by April 2021. Other analysts agree the levelling off in the headline rate of inflation will prove temporary, with further pressure on living costs expected amid soaring wholesale gas and electricity prices and the lifting of Ofgem’s consumer price cap on household bills. Reflecting increases in business costs that will hit consumers down the line, inflation in factory gate prices rose from 6 percent in August to 6.7 percent in September, the highest level for almost a decade.

The more accurate measure of inflation, RPI, which includes housing costs, is already at 4.9 percent and expected to soon top 5 percent.

Energy bills may rise as much as 30 percent, petrol prices recently reached a record high, home rental is up 8.5 percent, and household debts are soaring. The Food and Drink Federation believe food prices will rise by 9 percent in time for Christmas.

As the prices of essentials soar, the gap between workers' falling wages and living costs is becoming insurmountable, especially with the onset of winter. Workers are tightening their belts but still cannot make ends meet.

Responding to the Budget, the director of the Institute for Fiscal Studies (IFS), Paul Johnson, described projections of UK household incomes in the Independent newspaper as “pretty stagnant” over the next five years. “That’s partly because of inflation” said Johnson, “that’s partly because of the big tax rises that we’ve seen imposed, that’s partly because growth is so poor...”

Johnson warned, “Those almost non-existent increases in living standards over the next half-decade are a big blow to all households, and families of course…”

Household fuel bills were rising sharply before the regulator Ofgem increased the energy price cap at the beginning of October. The End Fuel Poverty Coalition warned that rising household prices, by as much as £400 per year for some, will push another half million of the UK poor into “fuel poverty” whereby households are forced to cut other essentials like food in order to heat their homes.

Working class households are most vulnerable to increases in the cost of living. Those in poverty already spend the highest share of their incomes on daily essentials. Poorer households already pay as much as 50 percent more on their utility bills than those with more money, according to data analysed by the Labour Party. Their figures show Britain’s poorest 10 percent of households pay on average £756 a year per person for gas and electricity. A far smaller average of £504 per person is spent in the richest households with the national average spent being £530 on utility bills. The poorest households spend proportionately around seven times as much of their funds on energy as the richest households, and three-and-a-half times the national average.

Another integral cause for the rocketing cost of living are government benefits cuts. These include this month’s £20 a week cut to Universal Credit (UC) which alone slashes £1,040 from the annual incomes of at least 5.5 million people. The Joseph Rowntree Foundation says the cut, the largest one-off welfare cut in UK history, costing the poorest in society a collective £6 billion a year, will push half a million more people into poverty. Approximately 40 percent of those claiming UC are employed at poverty-level wages and receive the benefit because their income doesn’t cover basic living costs like rent and utility bills.

Planned National Insurance (NI) increases will decrease incomes further, with workers paying an additional 1.25 percent more in tax from their wages. The increase will come into effect in April next year, just at the point when energy bills are expected to increase once more.

The Demos think tank found that those aged from 18 to 30 face the “greatest uphill battle” to make ends meet. Nearly half of young people told Demos they would not be able to ride out price rises and falling wages because the combination of their substantial debts and insecure and low wages means they already struggle to pay essential bills.

The ONS calculated supermarket prices have experienced their sharpest rise since the 2008 financial crash, rising by 1.1 percent in August alone. Price inflation for food and drink is expected to continue beyond the end of the year, according to the Morrisons supermarket chain. Food prices could increase further by as much as 2.3 percent within the next three months, research by Capital Economics claims.

Responsibility for the protracted decline in working-class living standards belongs to the pro-capitalist trade unions and the Labour Party. Throughout the pandemic, Labour and the unions have worked in alliance with the Johnson government to suppress workers’ opposition to attacks on their health and safety; ensuring that workplaces and schools remain open so profitability is maintained, frequently at the cost of worker’s lives.

Responding to the budget, Trades Union Congress General Secretary Frances O’Grady noted families faced “a triple whammy of a £1,000 universal credit cut, tax hikes and fast-rising energy and food bills.” But O’Grady uttered only shallow soundbites in response, such as, “The chancellor has gone from pay freeze to pay squeeze.”

O’Grady is silent because the unions are deepening their collaboration with employers in preventing the outbreak of strikes—many aimed at opposing corporations’ attempts to force down pay even further. The unions are working day and night to settle disputes with agreements that always result in a lowering of workers’ pay and attacks on terms and conditions.

World Health Organisation warns “pandemic is far from over” as COVID-19 surges through Europe

Thomas Scripps

Europe is driving a new global upsurge of COVID-19. Total worldwide cases have now increased for the last two weeks to an average of over 430,000 recorded infections per day. With cases falling or stable in every other region, the growth is entirely down to a massive spread of the virus on the European continent.

Cases rocketed from mid-June to late July, driven overwhelmingly by the United Kingdom. After falling slightly in the period to mid-September, they have shot up again as part of a more generalised spread of the disease, concentrated particularly in Eastern Europe as well as the UK.

Medical staff treat a patient with coronavirus at an ICU of the city hospital 1 in Rivne, 300 kilometers (190 miles) west of Kyiv, Ukraine. Ukraine is suffering through a surge in coronavirus infections, along with other parts of Eastern Europe and Russia. Friday, Oct. 22, 2021 file photo, (AP Photo/Evgeniy Maloletka, File)

In the week to last Sunday, the seven-day European average of daily new cases increased by nearly 11 percent. Over 220,000 people are now being infected every day. According to data from Johns Hopkins University, Europe is registering more than twice the number of daily cases per million (299) than the next-highest region, North America (139). Over 3,000 people in Europe are being killed by COVID-19 each day—34 percent higher than the same time last year.

World Health Organisation (WHO) Director-General Dr Tedros Adhanom Ghebreyesus commented last week, “The global number of reported cases and deaths from COVID-19 is now increasing for the first time in two months, driven by an ongoing rise in Europe that outweighs declines in other regions. It’s another reminder that the COVID-19 pandemic is far from over.”

Expressing the homicidal policies of the entire ruling class, however, WHO Regional Director for Europe Dr. Hans Kluge urged the continent’s governments to keep schools open this winter, accompanied by a range of (inadequate) mitigation measures. He claimed, “Last year’s widespread school closures, disrupting the education of millions of children and adolescents, did more harm than good, especially to children’s mental and social well-being. We can’t repeat the same mistakes.”

The cost of keeping open schools and the economy in the middle of a raging pandemic—a policy driven by the profit motives of the ultra-wealthy—is already playing out across the continent, even before the winter months begin to bite.

The growth of infections in many Central and Eastern European and Balkan countries is astronomical. Official daily case rates are the highest they have ever been in Estonia (1,286 per million), Latvia (1,268), Slovenia (1,095), Slovakia (715), Bulgaria (685), Ukraine (526), Greece (355) and Russia (259), and are rapidly on their way to their highest ever values in Lithuania (1,090) and Croatia (876).

There have also been sharp increases in average daily cases in Hungary (up 82 percent in a week), Czech Republic (up 63 percent), Poland (57) and Austria (42 percent). Across the region, real rates of infection are likely to be far higher as inadequate testing infrastructure is overwhelmed by the spread of the disease. Last week, testing in the Croatian capital returned a positivity rate of 50 percent.

In many countries, the situation is exacerbated by low rates of vaccination. Less than half (43 percent) of Serbia’s population is fully vaccinated, 33 percent of Romania’s and Russia’s, 22 percent of Bulgaria’s and 17 percent of Ukraine’s. General distrust of the government and the healthcare system, the impact of government propaganda declaring the pandemic over or of little concern, and the agitation of far-right and religious forces have all contributed to this phenomenon.

Without even the protection of vaccines, the wave of infections is translating into unprecedented death tolls. Even official average daily COVID-19 death rates are at their highest levels since the start of the pandemic in Russia (1,104 deaths a day), Romania (439), Ukraine (581) and Serbia (64), with Bulgaria (132) on the way. Romania’s average daily death toll is more than 2-and-a-half times its previous peak, Ukraine’s is 44 percent higher, and Russia’s is 28 percent higher.

The burden of severe disease is straining woefully underfunded health infrastructure to breaking point. Intensive care units in Romanian hospitals are beyond capacity. Medical teams have been sent by Poland and Denmark to provide support and other European countries have donated oxygen concentrators and bottles of monoclonal antibodies. One of Bulgaria’s main suppliers of medical oxygen warned last week, “If the number of patients in hospitals continues to increase, there will be no oxygen next week.”

Even the more heavily vaccinated countries are suffering serious numbers of fatalities. Latvia, with 54 percent of its population fully vaccinated, is recording its highest average daily death toll of the pandemic. Similarly vaccinated Baltic states Estonia and Lithuania are not far behind.

The catastrophe unfolding in Latvia has forced its government to declare a one-month lockdown, switching some schools to online learning and some industries to remote working, banning indoor and outdoor gatherings, and closing the majority of shops and all restaurants, salons, cinemas, theatres, concert and sports venues.

This falls well short of what is required to stem the tide of infections and deaths. Other governments, however, have refused to go even this far, introducing only a patchwork of partial measures from vaccine and mask mandates, to COVID passes, curfews and limited restrictions on large gatherings.

In Western and Northern Europe, cases have risen dramatically in Belgium, the Netherlands, Denmark, Norway and Germany. In the last week, the seven-day average of daily new cases in Norway climbed 62 percent in the week to Sunday, in Belgium 49 percent, in Denmark 48 percent, in the Netherlands 42 percent, and in Germany 40 percent.

Belgium is on track to outstrip the UK in per capita figures, after a slight decline in Britain’s recorded infections over the last week. Its government has responded by introducing the most minimal measures, requiring face masks in public places and for bar, restaurant and fitness staff and mandating COVID passes for entry. The same is planned for the Netherlands.

The Danish government will review its measures on Friday but has already downgraded the threat status of COVID-19, limiting its options. Opposition parties the Red Green Alliance, Danish People’s Party and Conservative Party have all expressed their opposition to the return of restrictions.

The German parliament is planning to end the “epidemic situation of national scope” in November, leaving in place only mask wearing in public spaces and vaccine restrictions on entry to certain venues as protective measures. Dirk Wiese, deputy-head of the Social Democrats parliamentary group spelt out, “There will no more be school closures, lockdowns or curfews again.”

There have also been significant upticks in cases in France and Italy. COVID hospital admissions in Italy have increased 7.5 percent and admissions to intensive care units in France have climbed 12 percent.

In the UK, despite a small decline, daily infections remain extremely high and over 150 people on average are being killed by the virus every day. The virtually unchecked spread of the virus for the last few months appears to have given rise to a major growth of the AY.4.2 sublineage of the Delta variant, thought to be 10-15 percent more transmissible, which the WHO reported on October 26 has now reached 42 countries.

The initial resurgence of the pandemic in Europe, as the Northern hemisphere heads into winter, is an urgent warning of the dangers of “living with” COVID-19. Yet more waves of suffering and death will engulf the populations of the world if action is not taken by the working class to stop the murderous policy of herd immunity in its tracks, and implement policies for the elimination of the virus.

Worsening economic data coming out of China

Nick Beams

The economic news coming out of China is all pointing one way—downwards.

On Sunday, the National Bureau of Statistics reported that the official purchasing managers’ index (PMI) for manufacturing dropped to 49.2 in October, the second straight month in which this key index for factory activity has fallen.

A worker wearing a face mask drills on a new apartment buildings under construction in Beijing on Oct. 26, 2021. (AP Photo/Andy Wong)

With 50 marking the boundary between contraction and expansion, the October reading was lower than the 49.6 recorded for September and was the lowest since the start of the COVID-19 pandemic in February last year. The figure was well below the 49.9 median forecast of economists polled by the Wall Street Journal.

The main factors in the lower result were rapidly rising raw material costs, a widespread power shortage and a sharp slowdown in the real estate sector. The property giant Evergrande continues to struggle to avoid bankruptcy and is leading a hand-to-mouth existence as it seeks to make interest payments on dollar-denominated debt.

Before the falls in the last two months, China’s manufacturing sector had enjoyed something of a boom as it recovered from the effects of the pandemic.

According to the Wall Street Journal, while some economists had expected factory output would improve as power curbs imposed last month eased, the PMI readings suggest that “the broader picture for China’s economy is deteriorating.”

“Domestic demand, in particular remains weak, held back by an ailing property market under pressure from Beijing’s tightening rules [the so-called three lines that have restricted credit] as well as widespread power shortages and sporadic virus outbreaks that have halted consumption and production activity.”

The lower PMI figures come on top of national accounts data which showed that in the third quarter the annual rate of growth had fallen to 4.9 percent—the lowest level in a year, with the economy expanding by just 0.2 percent over the previous three months.

The Financial Times reported that pressure is growing on Beijing to loosen the credit restrictions that have been blamed for the mounting problems in the property sector.

It cited a note from analysts at Gavekal Dragonomics who maintain that the source of the slowdown is not on the supply side, such as power shortages and lockdowns. Rather, “the real problem is on the demand side” leading to the transition from an expected slowdown to a “shocking loss of economic momentum.”

They pointed to the loss of demand because of the troubles in the real estate sector. “Since the property sector is the most important driver of cyclical activity, overall growth will weaken further [in the fourth quarter] and into 2022,” they wrote.

The contraction is evident in other areas. While the non-manufacturing PMI was 52.4, indicating an expansion, it was down from 53.2 the month before.

Citi analysts have warned that weaker manufacturing activity is being accompanied by rising prices and features of stagflation—lower economic output combined with rising prices—that have “become more evident and would limit near-term policy options.”

In the middle of last month, as the debt problems of Evergrande continued to mount, the People’s Bank of China (PBoC) issued a statement that the financial fallout would be able to be contained and risks were “controllable.”

That may still be the case so far as banks and other financial institutions are concerned. But a comment in Bloomberg yesterday drew attention to the fact that banking and finance are not only areas of the economy to be affected by the crisis.

“The key to managing the crisis is not just to contain the risk of financial loans, but also the other two-thirds of the liabilities owed by the distressed real estate developer to a vast network of companies and enterprises in its supply chain—including providers of construction services and material as well as contractors and subcontractors supplying needs raging from labour to decoration.”

China, it said, had the world’s most complete supply chain because of its vast manufacturing range but this came with the risk that “the sudden collapse of a large non-financial company could cause cascading effects for the real economy at a scale unseen in any other part of the world.”

Evergrande did not just borrow from the banks and other financial bodies. In the common practice of many large corporations around the world, it borrowed from its suppliers and contractors by forcing them to accept longer payment terms. When a payment falls due, the smaller companies are asked to accept commercial bills instead of cash—in effect a further extension of payment—which they can then sell to brokers at a discount.

This had the potential to cause a large group of suppliers and contractors to not only lose business but to experience financial distress “possibly creating a chain of bankruptcies upstream,” the Bloomberg article said.

It noted this situation was “new territory” for China’s central bank, the PBoC. While it had a good record of rescuing financial institutions that had failed, “the restructuring of a large non-financial institution with liabilities on the same scale as Evergrande is unprecedented.”

The crisis is by no means confined to Evergrande. According to a report by the research firm China Real Estate Information Corp. (CRIC) released yesterday, new home sales for the country’s top 100 developers fell by 32 percent in October. The CRIC report said that the outlook for the property market did not look promising and sales could continue to slow for the rest of the year.

In another report on the debt crisis facing many developers, Bloomberg said the key question was becoming “who will survive in China’s property sector” as the country’s credit market “undergoes its biggest shakeout in years.”

In the past, offshore borrowing arranged through Hong Kong has been a means by which cash-strapped companies have been able to raise funds. But with junk bond yields reaching as high as 20 percent it has become “all but impossible for stressed developers to refinance their maturing debt.”

According to Bloomberg calculations, Chinese developers have more than $2 billion of onshore and dollar-denominated payments due in November. It reported that at least four building companies defaulted last month while Evergrande twice averted being declared in default only by making interest payments at the last moment. But it is living from day-to-day with the 30-day grace period on another $148 million of interest payments ending this month.

FDA approves Pfizer’s COVID-19 vaccines for children aged 5–11

Benjamin Mateus

On Friday, the Food and Drug Administration almost unanimously, 17–0 with one abstention, authorized the Pfizer COVID-19 vaccine under emergency use for children aged 5–11.

The Advisory Committee on Immunization Practices (ACIP) is scheduled to convene today to recommend who might receive the vaccines. The Centers for Disease Control and Prevention (CDC) director must then endorse these recommendations, meaning that the soonest that children can begin receiving vaccinations will be on Wednesday.

PS 245 elementary school in New York City, September 13, 2021. (AP Photo/Mark Lennihan)

In anticipation of the regulatory approval, the Biden administration is relying on hospitals, clinics and pharmacies to inoculate children rather than public vaccination centers. “Kids have different needs than adults, and our operational planning is geared to meet those specific needs, including by offering vaccinations in settings that parents and kids are familiar with and trust,” said Jeffrey D. Zients, the White House coronavirus response coordinator, to reporters.

Sonya Bernstein, a senior policy advisor on the COVID-19 response for the White House, explaining the hazards at play in trying to get children vaccinated, told the New York Times, “We know that access is going to be critical here. The administration has in recent weeks explored ways to provide a kid-friendly experience that makes sure that we’re getting shots in arms with trusted providers in ways that make parents feel comfortable.”

Approximately 28 million children in this age grouping would be approved to receive the Pfizer vaccine. The formulation contains only a third of the adult dosing, or 10 micrograms. The vaccines can be stored at standard refrigeration temperatures for up to 10 weeks. As with adults, the vaccine is given as a two-dose regimen 21 days apart.

The reduced dosing was selected based on the outcomes in the phase one trial for its safety, tolerability and immune response. The phase two and phase three trials that included 2,268 participants who were 5–11 years of age received the two-dose regimen.

A month after completing the series, antibody titers against the SARS-CoV-2 virus were comparable to the levels for those participants aged 16 to 25 who received the full adult-sized 30 microgram vaccines. Shots for those six months to four years of age remain under investigation.

With the FDA’s announcement has come an about-face in the mainstream media’s attitude on the dangers of the pandemic to children and schools as vectors for community transmission. Previously they had downplayed these concerns in order to push for a complete reopening of schools for in-person instruction.

Even as late as October 4, 2021, the Washington Post published an op-ed column by Jeffrey Vergales and Monica Gandhi, in which the authors claimed “in many cases, quarantines are probably doing more harm than good—given the well-documented costs, intellectual and social, of keeping children out of schools closed for in-person learning longer than many of its peer nations, despite evidence that schools could open safely.”

The evidence has been contrary to these assertions. According to the American Academy of Pediatrics (AAP), one of the few reliable sources of information on the impact of the COVID-19 pandemic on children, at least 6.3 million children have tested positive for COVID-19. They account for 16.5 percent of all coronavirus infections in the country. More recently, they have accounted for 25.1 percent of weekly reported cases. For 11 straight weeks, more than 100,000 children have become infected each week. Almost 600 children have died from COVID-19 during the pandemic, 42.6 percent of them in the last four months.

With the FDA announcement, the Post now suddenly discovers the dangers to children from the coronavirus, which can be overcome through the new vaccine, which will now overcome all resistance by parents to sending their children into social settings rather than protecting them at home.

The article notes: “A pediatric vaccine has been eagerly anticipated by many parents who want to ensure their children’s safety and holiday gatherings. Experts say the immunizations [of children] will represent a milestone in a pandemic that has killed more than 737,000 people in the United States.”

The Post cites critical expert testimony. Patrick S. Moore, a University of Pittsburgh microbiologist and committee member, declared, “To me, it seems that it is a hard decision but a clear one. Ninety-four children between five and 11 have died of COVID-19, and all have names. All of them had mothers.”

These tragedies could have been avoided had the government taken the appropriate cautionary note and pursued an elimination strategy that had proven effective in many countries when resources and political will were committed to ensuring the virus was kept at bay.

The New York Times wasted no time with an opinion piece that followed the FDA announcement, calling for the end to mask mandates. In their usual attempt to offer a “balanced” portrayal of the issue, Jessica Grose, who is the parenting columnist at the Times, as if it was a foregone conclusion, said, “But it’s time to start a serious discussion about taking off masks since it will take time to institute policies after communities—hopefully—come to some degree of consensus. Maybe the carrot of mask-free schools will inspire some more hesitant families to get their children vaccinated.”

Not surprisingly, in a follow-up Tweet to the Grose opinion piece, Professor Emily Oster, one of the main propagandists for reopening schools, wrote, “Masking off-ramps are necessary. I will admit I have been reluctant to talk about this, in part due to fear of being yelled at. This wasn’t brave. I will try to be braver.”

Clearly, behind the shifting winds in the bourgeois press is a consistent social interest: to vaccinate children is to once and for all put an end to all mitigation strategies and open the country to all commerce and travel and ensure schools remain open regardless of infection rates in classrooms. And with vaccines now available for children, the doors will be flung open.

New evidence, however, pours cold water over such rosy appraisals. In a recent study published in The Lancet: Infectious Diseases, the authors investigated the “transmission and viral load kinetics in vaccinated and unvaccinated individuals with mild Delta variant infection in the community.” Though vaccines have shown high efficacy against severe disease and death, their ability to protect against asymptomatic transmission and mild disease has been far less effective, and the level of protection appears to decline more rapidly over a short time.

When they calculated the Secondary Attack Rates (SARs) [when an infected person spreads the disease in a family home or dwelling unit ] in household contacts, they found that the SARs in “household contacts exposed to the Delta variant was 25 percent in vaccinated and 38 percent in unvaccinated contacts,” according to a comment in The Lancet by Dr. Annelies Wilder-Smith, underscoring the fact that though better protected against serious infections and death, breakthrough infections continue to occur among the vaccinated. They also found that though vaccinated individuals cleared the virus sooner, peak viral loads were similar between vaccinated and unvaccinated.

According to the CDC, there have been 10,857 deaths and more than 30,000 non-fatal hospitalizations among the vaccinated population. A recent Twitter thread provided these glaring statistics. Out of 119,752,227 fully vaccinated people in 41 US jurisdictions that publicly report COVID-19 breakthrough cases and deaths, 1,338,315, or 1.12 percent, have experienced a confirmed breakthrough case, and 12,339, or 0.01 percent, have died following a breakthrough case.

Vaccines alone will not end the pandemic. Allowing the virus to persist in the human population will only lead to more deaths and disease as it becomes endemic, to say nothing of the danger of further and more deadly mutations. It has been estimated that COVID-19 would kill up to 100,000 people per year in the US if allowed to exist in the population, a toll almost four times above that of the flu.

Although immunization of children is critical, it is more important to eliminate the coronavirus from human populations rapidly. The notion of allowing the virus to become endemic is a dangerous policy. Yet, every time daily cases of new infections begin to decline, there is repeated push to lift more restrictions.

Why the Troubled U.S. Empire Could Quickly Fall Apart

Richard Wolff

The U.S. wars lost in Iraq and Afghanistan showed imperial overreach beyond what even 20 years of war could manage. That the defeats were drawn out for so many years shows that domestic politics and the funding of the domestic military-industrial complex were, more than geopolitics, the key drivers of these wars. Empires can die from overreach and sacrificing broadly social goals for the narrow interests of political and economic minorities.

The United States has 4.25 percent of the world’s population yet accounts for about 20 percent of global deaths from COVID-19. A rich global superpower with a highly developed medical industry proved to be badly unprepared for and unable to cope with a viral pandemic. It now wrestles with a huge segment of its population that seems so alienated from major economic and political institutions that it risks self-destruction and demands the “right” to infect others. Refusing to accept lifesaving COVID-19 vaccine and mask mandates in the name of “freedom” mixes a frightening stew of ideological confusion, social division, and bitterly rising hostility within the population. The January 6 events in Washington, D.C., showed merely the tip of that iceberg.

Levels of debt—government, corporate, and household—are all at or near historical records and rising. Feeding and thereby supporting the rising debts is the Federal Reserve with its years of quantitative easing. Officials at the highest levels are now discussing the possible issuance of a trillion-dollar platinum coin to have the Fed give that sum in new credit to the U.S. Treasury to enable more U.S. government spending. The purpose goes far beyond political squabbling over the cap on the national debt. The goal is nothing less than freeing the government to inject still more massive amounts of new money into the capitalist system to sustain it in times of unprecedented difficulty. The Fed learned that today’s capitalism needs such quanta of monetary stimulus thanks to the three recent crashes (2000, 2008, and 2020) witnessed by the capitalist system. A desperate empire approaches a version of the Modern Monetary Theory that empire leaders mocked and rejected not very long ago.

Extreme inequality, already a distinguishing feature of the United States, worsened during the pandemic. This inequality fuels rising poverty and rising social divisions among the haves, the have-nots, and the increasingly anxious think-they-haves. Attempts by employers to recoup the profits lost to the pandemic and to the capitalist crash during 2020 and 2021 have led many to impose additional squeezes on employees. This has led to official and unofficial strikes that continue amid a reawakening labor movement. On an individual level, the rate of workers who have been quitting their jobs has been hitting record highs.

Attempts by employers to recoup profits lost over the last two years also show up in the ongoing inflation besetting the empire. Employers set prices for what they sell. They know the Fed has juiced up the potential purchasing power by flooding markets with new money. Demand, pent up by the pandemic and the economic crashes, will help, at least for a while to support inflation. But even if temporary, the inflation will further worsen income and wealth inequalities and thereby set the U.S. up for the next crash. On top of this new century’s three crashes (2000, 2008, and 2020), each worse than the one before, another crash, which could be still worse, could challenge the capitalist system’s survival.

Fires, floods, hurricanes, droughts: the signs of climate catastrophe—not to mention its fast-climbing costs—add to the sense of impending doom provoked by all the other signs of empire decline. Here too, the tiny minority of fossil fuel industry leaders has succeeded in blocking or delaying the social action needed to cope with the problem. Empires decline when their long habits of serving minority elites blind them to those moments when the system’s survival requires overriding those elites’ needs, at least for a while.

For the first time in over a century, the United States has a real, serious, ascending global competitor. The British, German, Russian, and Japanese systems never reached that status. The People’s Republic of China now has. No settled U.S. policy vis-à-vis China has proven feasible because of internal U.S. divisions and China’s spectacular growth. Political leaders and “defense” contractors find China-bashing attractive. Denouncing China serves as popular scapegoating for many politicians in both parties and as support for an ever-increasing defense spending by the military. However, major segments of large corporate business have invested hundreds of billions in China and in global supply chains linked to China. They do not want to risk them. In addition, for decades, China has offered one of the world’s lowest-cost, better educated and trained, and most disciplined labor forces coupled with the world’s fastest-growing market for both capital and consumer goods. Competitive U.S. firms believe that global success requires their firms to be well established in that nation with the world’s largest population, among the world’s least-costly workers, and with the world’s fastest-growing market. Everything taught and learned in business schools supports that view. Thus the U.S. Chamber of Commerce opposed former President Donald Trump’s trade/tariff wars and now opposes President Joe Biden’s hyped-up program of China-bashing.

There is no way for the United States to change China’s basic economic and political policies since those are precisely what brought China to its now globally envied position of being a competitor to a superpower like the U.S. Meanwhile, China is expected to catch up to the United States with equality of economic size before the end of this decade. The problem for the U.S. empire grows, and the United States remains stuck in divisions that preclude any significant change except perhaps armed conflict and an unthinkable nuclear war.

When empires decline, they can slip into self-reinforcing downward spirals. This downward spiral occurs when the rich and powerful respond by using their social positions to offload the costs of decline onto the mass of the population. That only worsens the inequalities and divisions that provoked the decline in the first place.

The recently released Pandora Papers offer a useful glimpse into the elaborate world of vast wealth hidden from tax-collecting governments and from public knowledge. Such hiding is partly driven by the effort to insulate the wealth of the rich from that decline. That partly explains why the 2016 exposure of the Panama Papers did nothing to stop the hiding. If the public knew about the hidden resources—their size, origins, and purposes—the public demand for access to hidden assets would become overwhelming. The hidden resources would be seen as the best possible targets for use in slowing or reversing the decline.

Decline provokes more hiding, and that in turn worsens decline. The downward spiral is engaged. Moreover, attempts to distract an increasingly anxious public—demonizing immigrants, scapegoating China, and engaging in culture wars—show diminishing returns. Empire decline proceeds but remains widely denied or ignored as if it did not matter. The old rituals of conventional politics, economics, and culture proceed. Only their tones have become those of deep social divisions, bitter recriminations, and overt internal hostilities proliferating across the landscape. These mystify as well as upset the many Americans who still need to deny that crises have beset U.S. capitalism and that its empire is in decline.

UK passes 9 million COVID infections as children return to school

Robert Stevens

Children return to classrooms in England from today following the one week half-term holiday. Tens of thousands of COVID cases are continuing to rip through schools and the entire population.

On Saturday the UK passed the milestone of 9 million infections (9,019,962), with around 40,000 people a day infected daily. This means that over 13.1 percent of the entire population have been infected with COVID.

The number of deaths in Britain flowing from the Conservative government’s herd immunity policy is horrific. According to Office for National Statistics (ONS), 165,213 people had died by October 15 with COVID-19 listed on their death certificate. This equates to one in 400 people killed due to COVID so far in Britain.

Due to deaths since October 15, the fatality rate is now even higher. On October 27, retired lawyer Fionna O'Leary tweeted that the 1,221 deaths since then means, “We have finally crossed the unthinkable 1/400 barrier. 1 in every 398 United Kingdom citizens dead of Covid.”

A reception class teacher, left leads the class at the Holy Family Catholic Primary School in Greenwich, London, Monday, May 24, 2021. (AP Photo/Alastair Grant)

Despite 86.8 percent of the population having been vaccinated with two doses, the vaccination programme has virtually ground to a halt under conditions in which immunity to the virus is rapidly waning. By October 29, just 13.2 percent of the population aged 12+ have received a (booster/third dose).

The vaccine rollout among children was delayed for months after the Joint Committee on Vaccination and Immunisation decided against recommending vaccinating almost all under-18s. By the time the government—under mounting pressure from concerned parents and educators—made the decision that some school age groups, excluding those under 12, should be vaccinated the entire summer period had been lost. The vaccine programme among 12–15-year-olds was finally rolled out in late September but it has been marked by chaos, reaching only a fraction of pupils. Only 19.3 percent of 12-15 year-olds have been vaccinated, according to a UK Health Security Agency estimate. Over 40 percent of schools had not received the single vaccine for their pupils by half term.

The full reopening of the economy on July 19, following by the reopening of schools and then college and university campuses, has allowed the disease to spread freely.

July 19 was dubbed “Freedom Day” by Prime Minister Boris Johnson. By then, according to the government’s figures, recording deaths that occurred within 28 days of a positive test, there had already been 129,007 deaths. In just the three months from July 19 to October 27, there have been well over 11,000 more deaths (11,620). By July 19, 5.5 million Britons had been infected with COVID. On Sunday that figure stood at 9,057,629 million, a staggering rise of more than 3.4 million cases just over 100 days. In just the seven days to October 30, another 1,097 deaths were recorded in Britain.

Schools have been the main vector for the disease since their reopening in August and September. ONS data published October 29 found that one in 25 primary age children and one in 11 secondary pupils are currently infected. This is a significant increase in both age groups, with ONS data from October 8 finding that one in 33 primary age children and one in 12 secondary pupils were infected.

Over a thousand school children have been hospitalised in the few weeks since schools went back. On October 29, Professor Christina Pagel, the director of University College London's clinical operational research unit, tweeted, “There have been 1,203 hospital admissions in 6-17 year olds with Covid since 1 Sept 2021. Previous research showed that about 80% of those are *because* of Covid & 58% in children with no other health conditions.”

In the face of warnings from concerned scientists at a worsening public health catastrophe, the mouthpieces of the ruling class are demanding they be silenced once and for all.

Andrew Lilico, a columnist for the Tory Party’s house organ, the Telegraph, declared in an article Friday, “Lockdown fanatics should be ashamed of themselves”.

Congratulating the government on its homicidal policy, Lilico commented, “The government estimates are that nearly 80 per cent of children have now had Covid and about 6-7 per cent are newly infected per week. That means that the virus has all but run out of children to infect and cases among children will crash—according to the latest data they are falling at a rate of about 40 per cent per week. Children constituted half of recent cases. So chldren’s [sic] cases crashing means total cases will fall rapidly.” He forecasts, “Hospitalisations will fall, too, as boosters eliminate most of the residual serious disease risk for the elderly.”

Declaring that “the epidemic is over, [deliberately avoiding describing it as a pandemic], Lilico added casually, “Maybe other things might threaten our health soon. A new flu epidemic is a possibility. Covid will become endemic, after a bumpy transition over the next year or so. Tens of thousands of people will catch it every day, for ever. All of us will get it many times.”

Across the political spectrum, there is unanimity behind the herd immunity agenda, with apologias coming thick and fast. The BBC’s health correspondent Nick Triggle consistently endorses herd immunity. In February, he wrote as the government stepped up its propaganda that everyone had to “live with COVID… This is simply about being realistic. Covid isn’t something that can be eradicated like smallpox was… Thousands will still die in winters to come. But each year this should lessen until it gets near to the levels of mortality we see with flu—something which society readily accepts.” He followed up with another piece headlined, “Why goal is to live with the virus—not fight it”.

Last week Triggle noted the widespread infection of children with barely disguised approval, writing, “In the most recent week, nearly half of cases have been in the under-20s,” i.e., mainly children.

“This has happened with relatively little spillover into older age groups. Once the virus had passed through these groups, who after all were the people least protected by the vaccine, there was always going to be a drop-off in infection levels because of the high levels of natural immunity acquired.”

On October 22, the science editor of the nominally liberal Guardian also solidarised with those in ruling circles celebrating the mass infection of children. Ian Sample, in an article, “Deep within the UK’s shocking Covid data, there may be reasons for optimism,” wrote, “Nearly 1,000 hospital admissions a day, and nearly 1,000 deaths a week? … But delve into the data and there are, perhaps, some reasons for optimism.”

He continued, “With so many adults well protected after vaccination, infection, or both, the primary driver for the UK epidemic is the infection rate among schoolchildren… The ONS estimates that for the week ending 9 October, 8.1% of children in school years 7 to 11 would have tested positive for coronavirus.”

None of this is of any great concern to Sample, who explains that it’s really cause for “optimism”: “This equates to about 5% becoming infected every week and adding to the pool of the immune. Before schools went back after the summer, a substantial minority of children in London may have had antibodies to the virus. With natural infections building on that immunity for weeks, cases may soon start to fall.”

Indeed, everyone can benefit from herd immunity because “since schoolchildren are seeding infections into the community, national cases may follow suit.”

What is being advocated, almost two years into a global pandemic, can only be described as social murder. The impact of this sadistic policy on children has been brutal. Last week COVID claimed its 101st child’s life in Britain. This death is on top of the more than 9,000 children hospitalised, 53,000 who are suffering Long COVID and at least 8,000 who have been orphaned.

Ukraine’s daily COVID-19 cases and deaths hit record highs

Jason Melanovski

Ukraine reported a record high number of daily COVID-19 deaths this past week, a result of the disastrous policies pursued by the Ukrainian government and capitalist governments all over the world. The Eastern European country of approximately 41 million is simultaneously Europe’s poorest country and one of its least vaccinated against COVID-19.

On October 30, Ukraine’s Health Ministry registered a new record of 26,198 new cases, the fourth highest number in the world. Among them were 1,108 children and 178 medical workers. The country also recorded 541 deaths, also one of the highest figures in the world. On October 26, Ukraine had reported a record 734 deaths in 24 hours.

The country’s overall death toll now stands at 71,710, according to data from John Hopkins University. Ukraine’s Ministry of Health reported earlier in October that 29,000 children are infected and that 42 children had died of the disease.

Patients with COVID-19 are treated in a hospital organized in the Lviv National Medical University in Lviv, Western Ukraine, Monday, Jan. 4, 2021. (AP Photo/Evgeniy Maloletka)

The situation is equally catastrophic in neighboring Russia, which continues to break its daily records in new deaths and infections. On October 29, Russia recorded 1,163 deaths, the highest number yet, and daily infections have repeatedly surpassed 40,000 last week. As of last week, almost 60,000 children in Russia were receiving medical care for COVID-19, with half of them showing “acute” symptoms. Last week, Moscow’s Mayor Sergei Sobyanin acknowledged that each day, about 1,000 children were getting infected in the capital, and between 20 and 30 had to be hospitalized.

Ukraine has an even lower vaccination rate than Russia, where only 32.5 percent are fully vaccinated, and 37.9 percent have received at least one jab. In Ukraine, just 7 million out of 41 million, or 16 percent, of the adult population are fully vaccinated —the second lowest share in Europe after Armenia’s rate of slightly over 7 percent.

According to Health Minister Viktor Lyashko, 94 percent of COVID-19 patients requiring hospitalization are unvaccinated.

The current situation, however, is due not only to low vaccination rates but above all the criminal refusal of the government to impose necessary public health measures to stop the spread of the virus.

Despite clear signs in late summer that the spread of the Delta variant in the country would spell disaster, the government of President Volodymyr Zelensky refused until the end of September to begin implementing social distancing and lockdown measures, at which point daily case rates had already begun to accelerate and reach into the high thousands.

Throughout the summer, the country enforced what it called an “adaptive lockdown,” which allowed regional authorities to tighten or ease restrictions depending on the situation locally. Whatever measures were imposed within this framework were totally inadequate and weakly enforced, permitting the Delta variant to spread unchecked.

In late September, the government announced that it would extend a state of emergency until the end of the year and issued a “yellow” warning for the entire country, which does little more than limit mass events and mandates mask wearing.

In the capital Kiev, Mayor Vitali Klitschko waited until Thursday to announce new restrictions to stem the virus’s spread. Starting November 1, restaurants, shopping centers and gyms will be closed and public transport limited to those who can show proof of vaccination or a negative PCR test.

As has been the case in many countries of the former Soviet Union where governments have promoted ethnic nationalism and religious obscurantism since 1991, widespread anti-vaccine propaganda in Ukraine has further undermined any attempts to contain the spread of the Delta variant.

In the western Ukrainian city of Chernivtsi, Dr. Olha Kobevko told the Associated Press that the Orthodox Church, of which 67 percent of Ukrainians are members, bears a substantial share of responsibility for anti-vaccine sentiments. “Some Orthodox priests have openly and aggressively urged people not to get vaccinated, and social networks have been filled with the most absurd rumors.” She added, “Ukrainians have learned to distrust any authorities’ initiatives, and vaccination isn’t an exclusion.”

In the Chernivtsi hospital where Dr. Kovebko works, there are just 120 beds and currently has 126 gravely ill COVID-19 patients. She reported seeing 10-23 patients dying every day at her hospital.

The Zelensky government has attempted to promote vaccination in recent months as the Delta variant spread by requiring teachers, government employees and other workers to be fully vaccinated by November 8. Proof of vaccination or a negative test will now be needed to travel on planes, trains and long-distance buses.

However, such measures have come too little too late. Moreover, the Zelensky government shares responsibility for the spread of vaccine misinformation and backwardness. For blatantly political reasons, it rejected the use of the readily available Russian Sputnik V vaccine and suggested it could be potentially dangerous.

In February, after refusing to permit the use of the vaccine, Zelensky stated that “Ukrainian citizens are not guinea pigs.” Later, he said, “We have no right to perform experiments on them.”

Sputnik V’s effectiveness and safety were confirmed by data published in Nature magazine in July.

Meanwhile, the desperate attempts of the Ukrainian government to solicit help from its imperialist backers for the vaccination effort fell largely on deaf ears .

Zelensky himself publicly displayed an unserious attitude towards the pandemic and downplayed the virus’s danger. In June of 2020 he told the newspaper Ukrainska Pravda that he had considered purposely contracting the virus just to prove to people “it’s not the plague.”

Many of Ukraine’s hospitals, already poorly supplied and understaffed, are now completely overwhelmed by the wave of Delta variant cases and deaths. According to Health Minister Viktor Lyashko, two-thirds of the country’s hospital beds with oxygen supplies are now occupied, and hospitals nationally are 65 percent full.

“The situation with hospitalisations is getting rampant,” Lyashko said. “I call on all of you to get your vaccine. We can and must stop these sad statistics.”

Unfortunately, all signs point to the continuation of such “sad statistics” as the Ukrainian government and governments all over the world continue to subordinate the fight against COVID-19 to the interests of capitalist profit.

Moscow ends decades-long NATO diplomatic mission, as alliance continues anti-Russian provocations

Andrea Peters

In a sign of worsening relations between the West and Russia, Moscow ended its decades-long diplomatic mission to NATO, stripped the trans-Atlantic alliance’s military mission of its accreditation and shuttered its information office in the capital city. The move was in response to NATO’s expulsion of eight members of Russia’s diplomatic team on allegations of spying, an accusation that the Kremlin denies.

In explaining his country’s actions, which are taking effect on Monday, November 1, Russian Foreign Minister Sergei Lavrov said that NATO is uninterested in an “equitable dialogue and joint work.” The Kremlin, he stated, does not “see the need to keep pretending that changes in the foreseeable future are possible.” NATO spokesperson Oana Lungescu had declared earlier that its expulsions were driven by the need to strengthen “our deterrence and defense in response to Russia’s aggressive actions.”

Speaking to the newspaper outlet Kommersant on October 18 about the latest developments, Andrei Kortunov, general director of the Russian Council on International Affairs, a Moscow think tank, described his country’s “partnership with NATO” as “exhausted.”

President Joe Biden and Russian President Vladimir Putin, arrive to meet at the 'Villa la Grange', Wednesday, June 16, 2021, in Geneva, Switzerland. (AP Photo/Patrick Semansky)

The US has recently said it may halt virtually all consular activity in Russia in January. It has largely stopped issuing American visas at its embassy and consulates in the country and on Thursday labeled Russian citizens “homeless nationalities,” a status usually reserved for states where the US has no diplomatic presence. Russians are now being directed to apply for entry papers in Poland.

An early October visit to Russia by US Under Secretary for Political Affairs Victoria Nuland for discussions with high-level government officials failed to yield any concrete results, and Deputy Foreign Minister Sergei Ryabkov warned at the time that there was a “risk of a further sharpening of tensions.” Nuland, who famously declared in 2014 that the US had spent $5 billion on “democracy building” efforts in the Ukraine prior to the overthrow of a government in Kiev with ties to Moscow, had previously been barred from entering the country, and sanctions had to be lifted in order for her to come for the discussions.

Despite Moscow’s continual efforts to use olive branches and displays of military might to cope with the geopolitical crisis it has confronted ever since the dissolution of the Soviet Union in 1991, it has been unable to stop the relentless war threats coming from Washington and Brussels for years. A June 2021 summit between US President Joseph Biden and Russian President Vladimir Putin, which seemed designed to ease tensions between the two countries as part of the US war drive against China, has not halted the provocations from the US and NATO.

In the middle of this year, NATO carried out its largest-ever war games along the entire span of Russia’s borders. In response, the Kremlin conducted major military exercises—Zapad-2021 (West-2021)—through the late summer and into the early fall. In 2021, the US, Canada and its European NATO countries collectively spent more than one trillion dollars on defense, compared to 61 billion dollars by Russia.

Last week, coming out of a meeting with Ukrainian Defense Minister Andriy Taran and President Volodymyr Zelensky, US Defense Secretary Lloyd Austin affirmed Washington’s commitment to Ukraine’s eventual entrance into NATO. Austin’s statements were intended to alleviate the fears of the Kiev government, which was thrown into near hysteria over the American pullout from Afghanistan, with Zelensky having realized that it too could be abandoned by its patrons in Washington.

Notwithstanding Western claims that the new Ukrainian state is some sort of icon of democracy, the government in Kiev rests on very little and has a narrow social base. It presides over a deeply impoverished population, currently being ravaged by COVID-19, and relies upon repression and far-right forces to prop itself up.

The ultimate entry of yet another American stooge regime into the trans-Atlantic alliance is ardently opposed by the Kremlin. President Putin reiterated earlier last week that the deployment of NATO military forces to Ukraine is “a threat to the Russian Federation.” A few days later, America’s Deputy Assistant Secretary of Defense for Russia, Ukraine, and Eurasia, Laura Cooper, called on NATO allies to end their limits on arms sales to Kiev. Shortly thereafter, Germany’s incumbent defense minister, Annegret Kramp-Karrenbauer, threatened Russia with the use of nuclear weapons.

Simultaneous to these events, the Kremlin warned NATO member Turkey against the sale of arms to Ukraine’s military, as a Turkish-made drone was recently used to attack Russian-allied forces fighting in Ukraine’s east. The American Congress, meanwhile, is discussing means to limit Russia’s global arms sales, as it objects to the fact that Moscow is using its position as the world’s second leader in the trade of military materiel for “advancing its foreign policy interests” in a manner that could “undermine” those of the US.

Geopolitical turmoil around the globe is amplifying the conflict between Russia and the US-NATO. Russian Foreign Minister Sergei Lavrov called on Wednesday for all of Afghanistan’s neighboring states to reject the deployment of either American or NATO forces on their territory. Moscow is in ongoing talks with the Taliban, deeply concerned that the fall of the Afghan government will bring about an explosion of Islamist jihadism in Central Asia and Russia itself, where such movements have been used to destabilize Moscow.

On Thursday, Vice Chairman of the Joint Chiefs of Staff General John Hyten identified Russia as America’s “most immediate threat,” emphasizing, however, that Beijing would soon eclipse Moscow in terms of the size of its nuclear arsenal.

An overriding question that has occupied the minds of American military planners for years is whether the US is equipped to fight a two-front war against both Russia and China simultaneously. Writing in Defense One on October 28, three associates of the Foundation for the Defense of Democracies, a leading neoconservative think tank in Washington, appealed to the government to prepare for just such a probability.

“If the Biden administration is to develop an effective 2022 National Defense Strategy and build the U.S. defense capacity and capability that American interests require, the administration must jettison outdated assumptions and recognize that the United States could confront Chinese and Russian military forces simultaneously,” they wrote. “Any plans that assume the United States will confront only one great power adversary at a time should be revised and updated without delay. Any additional capacity and forward basing requirements identified should inform ongoing program and budget discussions.”

According to recent official documents published as part of the US-Russia NEW START treaty, Washington has 1,389 nuclear warheads deployed and Moscow 1,458. Adding China into the mix, there is enough atomic firepower readily available to destroy all of humanity.

However mad these policies and visions, they are absolutely real. Those who will pay the ultimate price for them—the working class of every country—can only stop them by building a mass movement against war and capitalism. The governments of Russia and China—whose wealth comes from feeding off the carcass of the Soviet Union and the other which survives by having made Chinese workers the globe’s cheap labor platform—cannot stop, much less defend anyone against the violent eruption of American imperialism.