European Central Bank hikes interest rate with more to come

Nick Beams

The European Central Bank (ECB) has increased its base interest rate by 0.75 percent (75 basis points), the largest hike since the first days of the euro, and warned that more rises are to come.

European Central Bank at Frankfurt, Germany (Photo: Thomas Wolf, CC BY-SA 3.0 de)

In remarks at a press conference following the meeting of the central bank’s governing council yesterday, ECB President Christine Lagarde said interest rate increases would continue for up to five of the next policy-making meetings.

“We took today’s decision and expect to raise interest rates further, because inflation remains high and is likely to stay above our target for an extended period,” she said in her opening statement.

Energy price increases, responsible for 38 percent of the inflation surge, and rising food prices, combined with supply chain bottlenecks, were the main factors, but their effects are spreading.

“Price pressures have continued to strengthen and broaden across the economy, and inflation may rise further in the near term,” she said.

In response to a question, she said, “[w]e want all economic actors to understand that the ECB is serious” about countering high inflation.

But in response to another question, she made clear that monetary policy was not going to reduce energy prices. That being the case the issue which arises is: Why are the rate hikes being carried out in the name of “fighting inflation”?

The issue was not addressed directly in Lagarde’s opening statement nor by questions from journalists at the press conference. But all the participants know that the aim of the policy is to prevent so-called “second round effects,” that is, the drive by workers for wage rises to counter the massive attacks on their living standards.

This issue was only approached somewhat tangentially when one journalist asked what level of recession it would take for the ECB to reverse its policy. Lagarde replied that the present monetary policy was still stimulating the economy—another warning that more rises are to come. The ECB was “determined” to do its job, she said.

Asked whether it was going too far, as evidenced by the tightening of conditions in credit and bond markets, Lagarde said the ECB was “far away” from the rate needed to bring down inflation to its target rate of 2 percent.

On the economic outlook Lagarde said after a rebound in the first half of the year, “recent economic data point to a substantial slowdown in the euro area, with the economy expected to stagnate later in the year and in the first quarter of 2023. Very high energy prices are reducing the purchasing power of people’s incomes and, although supply bottlenecks are easing, they are still constraining economic activity.”

Besides the energy price increases, the fall in the value of the euro, which has dropped to below parity against the US dollar—a slide of 12 percent over the past year—has also “added to the build-up of inflationary pressures.”

Asked about how this affected the ECB’s policy, Lagarde gave the standard response of central bankers saying it did not target the currency, but the level of the euro was taken into consideration on the inflation front.

She said in the context of the global economy risks were primarily on the downside, in the near term. And then, in an expression of the thinking in European ruling circles, she said that in a downside scenario prepared by ECB staff, “a long-lasting war in Ukraine remains a significant risk to growth, especially if firms and households faced rationing of energy supplies.”

Addressing the central but largely unstated focus of all central bank policy— the wage demands of the working class—Lagarde said the labour market had remained “robust” and this, together with “some catch-up for higher inflation, are likely to support growth in wages.” But she noted that recent wage agreements indicate that “wage dynamics remain contained overall.”

As is taking place around the world, the ruling financial elites are relying on the trade unions to suppress wage claims in the face of the highest inflation in 40 years, coming on top of three decades of real wage reductions.

In a note published at the end of last month, the finance firm ING said demand-side inflation in the eurozone remained weak and the output gap— the difference between what the economy is producing and its potential—was negative. Household consumption was below pre-pandemic levels, and retail sales had been on a declining trend since last November.

With eurozone inflation now above 9 percent, it said the latest data for negotiated wage growth for the second quarter came in at just 2.1 percent, meaning “there is no evidence of a wage-price spiral … but that the eurozone is mainly facing an unprecedented squeeze in real incomes.”

Across the Atlantic, in the US, there are growing calls for the Federal Reserve to continue to drive up interest rates even further in response to an upsurge of workers’ struggles for wage increases.

This week Fed Vice Chair Lael Brainard, generally regarded as a dove on monetary policy, added her voice to those of other Fed officials calling for no let-up in the rate hikes, even as the threat of recession grows.

Speaking to a banking industry conference, before which she would have no doubt consulted with Fed Chair Jerome Powell given her position as number two at the central bank, Brainard said the Fed had to retain its nerve even as there was evidence of a slowdown in the economy resulting from previous rate increases.

“We are in this for as long as it takes to get inflation down,” she said. But, as Powell and others have acknowledged, interest rate increases will do nothing to reduce the price of gas or unlock constricted supply chains.

They are directed at suppressing wage claims, an issue to which Brainard referred as she noted that the US labour market continued with “considerable strength,” which was hard to reconcile with a “more downbeat tone of activity.”

In other words, the supply of labour, which Powell has insisted must be increased to overcome labour market “tightness,” must be increased. Within the capitalist economy this can only be done by driving up unemployment.

The extent of what is required has been outlined in a paper by three leading economists, one from Johns Hopkins University and two from the International Monetary Fund, cited by Jason Furman, the chairman of the White House Council of Economic Advisers under the Obama administration, in an article in the Wall Street Journal.

The economists concluded that to get inflation down to the Fed target of 2 percent would require an average rate of unemployment rate of 6.5 percent in 2023 and 2024, a significant increase from the present level of 3.7 percent. Former Treasury Secretary Lawrence Summers has made similar comments, even calling for an unemployment rate of 10 percent for a year.

What this means in social terms is the layoff of hundreds of thousands, potentially millions of workers, thereby increasing the labour supply and further pushing down wages—the focus of the central banks in their so-called battle against inflation.

10 million children have lost parents or other caregivers to COVID-19, according to latest estimate

Patrick Martin

A research letter published in the Journal of the American Medical Association (JAMA) Pediatrics Tuesday estimates that 10.5 million children worldwide have lost parents or other caregivers to the COVID-19 pandemic.

Children ages 5 to 11 wait in line with their parents to receive the Pfizer COVID-19 vaccine at a pediatric vaccine clinic set up at Willard Intermediate School in Santa Ana, Calif., Nov. 9, 2021. (AP Photo/Jae C. Hong, File)

According to the letter by a group of seven doctors from Britain and several African countries, “Consequences for children can be devastating, including institutionalization, abuse, traumatic grief, mental health problems, adolescent pregnancy, poor educational outcomes, and chronic and infectious diseases.”

These findings are derived from new figures on excess deaths published by many countries and collected by the World Health Organization (WHO), the Economist magazine, and the Institute for Health Metrics and Evaluation (IHME) at the University of Washington in Seattle.

According to the WHO figures, described as the most conservative, the hardest-hit country is India, with an estimated 3.5 million children having lost one or more caregivers. Other Asian countries with large totals include Indonesia (660,000) and Pakistan (410,000). Some of the most populous countries in Africa also were severely affected, including Egypt (450,000) and Nigeria (430,000).

In the Western Hemisphere, the worst affected countries were Mexico, the United States and Brazil, which also have the largest number of total deaths for the region.

According to the summary of the report, “little is being done to care for children left behind,” and no actual tabulation of orphaned or bereaved children is carried out by any national government. 

One of the researchers, Juliette Unwin of Imperial College, London, explained the group’s findings in a commentary published in Scientific American on Wednesday:

As an epidemiologist, I am used to studying waves of infection and measuring the rise and fall of deaths. While the deaths of parents and grandparents from COVID crash and recede, the pattern of children affected by orphanhood resulting from the death of a caregiver is entirely different. In every country, the number of children affected inexorably rises, month after month. The death of a mother, father, caregiving grandparent or other relative is permanent and enduring. A child whose parent died at the start of the pandemic is still a child without that parent now.

Unwin noted that two out of three children whose parents died were between the ages of 10 and 17, and that three out of four children who lost a parent had lost their father rather than their mother. She continued: “Regardless of gender, however, in families where the primary breadwinner dies, death can be linked to sudden and lasting family economic hardship, whereas the loss of a primary socioemotional caregiver can decrease social connectedness.”

These numbers provide an additional dimension for understanding the colossal impact that the coronavirus pandemic continues to have on the world’s population. As Unwin says, the millions of children who have lost parents will always have lost their parents. The loss will be a permanent feature of their lives, inflicting emotional and psychological damage. And the number will continue to grow as the death toll from COVID-19 rises.

And this does not include the millions more children whose parents have contracted Long COVID, which may make it impossible for them to carry out the critical tasks required of a primary caregiver.

In the face of these harrowing numbers, the Biden administration in the United States has said and done nothing. The Centers for Disease Control and Prevention (CDC) published a report in late 2021 which placed the number of US COVID-19 orphans at 140,000. Since then, the number of orphans has skyrocketed, but the CDC has published nothing on the subject throughout 2022.

Instead, the same day that the report on orphans was published by JAMA, the White House held a COVID-19 briefing, featuring all its leading public health figures engaged in happy talk about the great progress supposedly being made under Biden in dealing with the pandemic. The teleconference included Dr. Ashish Jha, the White House COVID-19 coordinator; Dr. Anthony Fauci, Biden’s principal adviser on COVID-19; Dr. Rochelle Walensky, director of the CDC; and Secretary of Health and Human Services Xavier Becerra.

None of them addressed the devastating impact of the pandemic, either on orphaned children or on the population as a whole. All were silent about the fact that more people have died of COVID-19 during Biden’s tenure in the White House than during the administration of Donald Trump (650,000 compared to 400,000), even though vaccines have been available throughout Biden’s presidency. Nor were they asked by the complacent press corps, which adheres religiously to the false propaganda that the pandemic is over, or at least reaching the “end game.”

Dr. Jha, who never misses an opportunity to spread complacency about a virus that has already killed more than a million people in the United States and more than 20 million worldwide, claimed that the upcoming cold weather, which drives people indoors, would not be the occasion for the surges in COVID-19 that took place during the fall and winter of 2020 and 2021. 

“We know how to manage fluctuations in COVID-19 and do so safely,” he said. “If people step up and do what is necessary, we can get through this winter with far less suffering, far less death, far less disruption.” The language is revealing: In the event of another massive surge in hospitalizations and deaths, the White House will blame it on the failure of the American people to “step up.”

Fauci and Jha emphasized that COVID-19 had become a permanent feature of American life and that the population would need COVID-19 vaccines newly formulated each year to take into account mutations. “Barring any new variant curveball,” said Dr. Jha, “for a large majority of Americans, we are moving to a point where a single annual COVID shot should provide a high degree of protection all year.”

Dr. Fauci chimed in: “It is becoming increasingly clear that, looking forward with the COVID-19 pandemic, in the absence of a dramatically different variant, we likely are moving towards a path with a vaccination cadence similar to that of the annual influenza vaccine, with annual, updated COVID-19 shots matched to the currently circulating strains for most of the population.”

This argument entirely distorts the nature of the pandemic threat. COVID-19 is far more lethal than the flu and has the ability to transform into increasingly infectious and vaccine-evading variants. What Dr. Jha dismisses as a “curveball” is actually an absolute certainty: SARS-CoV-2 is constantly driven by evolutionary pressures to develop new variants which evade vaccines and prophylactic drugs.

The environment that fosters these mutations is provided by the policy of “living with the virus” or declaring COVID-19 “endemic” or “permanent,” because with billions of people being infected, the virus has ample opportunity to mutate. The only genuine protection against the pandemic is the elimination and eradication of SARS-CoV-2, which requires a systematic public health effort comprised of vaccinations, testing, isolation and quarantines and temporary lockdowns to deprive the virus of the hosts it needs.

On Wednesday, the Food and Drug Administration gave final approval to new vaccines formulated against a combination of BA.1, the original Omicron variant, and BA.5, the variant which is currently dominating. Biden scheduled a press statement for Thursday afternoon to hail that action and make another appeal for additional congressional funding for COVID-19 vaccine development and distribution, although it was cancelled after the death of Queen Elizabeth II in Britain.

The death of Queen Elizabeth II: A major political crisis for British imperialism

Chris Marsden

Queen Elizabeth II has passed away aged 96, after seven decades on the throne as head of the United Kingdom. Her death occurs at a time of acute economic, social and political crisis for British imperialism, including the deepest collapse of living standards since the Great Depression, a NATO proxy war against Russia waged on mainland Europe, and a rising wave of class struggle that threatens to erupt into a general strike.

The Queen during her 2015 visit to HMS Ocean in Devonport at a ceremony to rededicate the ship [Photo by Joel Rouse/ Ministry of Defence/Open Government Licence v3.0]

The ruling class now faces this perfect storm without its popular representative of state on which it has relied to project the myth of national unity and suppress social conflict.

In her role as head of state, the queen officially welcomed and held weekly discussions with an extraordinary total of 15 prime ministers. Her final act of service to the bourgeoisie, just two days before her death, was to appoint Liz Truss as prime minister, bestowing her authority on an illegitimate and despised government tasked with waging war on the working class.

The Telegraph acknowledged the importance of the Queen’s role, writing, “the Crown can help secure smooth and peaceful handovers of political power… as we have seen only this week. The Queen’s final public duty was to oversee a trouble-free transition of executive power that in other countries might have engendered a political and constitutional crisis. How many other nations can seamlessly change their head of state and leader of government in a week without tumult?... the country’s stability has owed a great deal to the Queen’s presence at its heart.”

With her death, the crown falls onto the head of her son, Charles III. At 73, he is the oldest person to ever become king and has no popular support. His accession leaves little with which to conceal the deepening and irreconcilable social and political divisions that are the reality of life in Britain and throughout the world.

Amid the inevitable ritualistic fawning of the British media, the scale of the difficulties facing the ruling elite is acknowledged.

Martin Kettle wrote in the Guardian, “Do not underestimate the upheaval in British life that this dynastic moment will trigger. Elizabeth II spent 70 years as a low-key but extremely effective unifying force in a nation that is visibly pulling itself apart. Her passing will remove that force, which her heirs cannot assume they will be able to replicate. In its way, this succession will be one of the biggest tests to face modern Britain.”

The Financial Times stated, “The kingdom the Queen leaves behind confronts much larger questions than her own institution. Britain has lost its own strength and stay just as it is groping to define its place in the world for the decades ahead. Many other institutions of state appear outdated or tarnished and the survival of the 315-year-old United Kingdom itself is not necessarily assured.”

As monarch, Elizabeth played an essential role in preserving social and political stability, especially at times of heightened crisis for British imperialism.  She was placed in line to the throne as a result of the abdication of her uncle, Edward VIII in 1936, whose Nazi sympathies and those of his lover Wallis Simpson threatened to discredit the monarchy and provoke social and political conflict.

Her coronation in 1953 took place amid the protracted decline of British imperialism, just three years before the Suez crisis. She helped manage Britain’s eclipse by the United States and the retreat from empire as head of the Commonwealth—a civilised veneer behind which Britain was fully prepared to respond with utmost brutality when its vital global interests were threatened. From the savage repression of Kenya’s Mau Mau Rebellion when she first took office, the bloody occupation of Northern Ireland, Margaret Thatcher’s war for control of the Falklands/Malvinas and numerous criminal wars in the Middle East and North Africa, Britain’s Armed Forces have shrouded their crimes in the Union Jack while playing “God Save the Queen”.

As deference towards the monarchy faded, she led a political recasting that downplayed the Royal family’s fabulous wealth while investing as much dignity as she could muster in the archaic pomp and ceremony employed to lend bourgeois rule an air of timeless permanence and legitimise a system of hereditary privilege. This role as a symbol of national unity was never more important than at times of intensified class struggle.

However, from the 1980s on, the younger royals found it impossible to restrain themselves from public displays of wealth and privilege, as first Diana, then others were feted by the global super-rich and disgraced themselves in the process. In the last years before she died, the queen was forced to endure a bitter public rift with Prince Harry and his wife Meghan, as they sought greener pastures as international celebrities, and then the revelations of Prince Andrew’s involvement in billionaire Jeffrey Epstein’s sex trafficking operations.

Today, the earnest hope of the ruling class is that Charles’ time on the throne is short so that the carefully groomed and prepared Prince William can have a chance to restore a much-reduced monarchy’s public standing.

To facilitate this transition, events following the queen’s death have been meticulously planned. Operation London Bridge covers 12 days of official mourning, including her state funeral. This will be used once again to buttress the state apparatus and bury the class struggle beneath a torrent of patriotism, nationalist nostalgia and mawkish sentimentality.

Calls for national unity at a time of shared grief are already being used as a weapon against a growing strike wave.

The key role in these plans is being played by the trade unions and the Labour Party. Within an hour of the official announcement of the queen’s death, the Communication Workers Union (CWU) and the Rail, Maritime and Transport union (RMT) had suspended Friday’s postal strike and rail strikes planned for September 15 and 17. RMT General Secretary Mick Lynch fawned, “RMT joins the whole nation in paying its respects to Queen Elizabeth.”

On Friday morning it was announced that the annual Trades Union Congress, scheduled to begin Sunday, has been postponed.

Queen Elizabeth II, left, welcomes Liz Truss during an audience at Balmoral, Scotland, where she invited the newly elected leader of the Conservative Party to become prime minister and form a new government, September 6, 2022. [AP Photo/AP, File]

The trade union leaders will be joined in their own Operation London Bridge by the Labour Party leaders, whether nominally right or left.

Labour leader Sir Keir Starmer seized on the queen’s death to proclaim Labour’s commitment to national unity and class peace, writing, “Above the clashes of politics, she stood not for what the nation fought over, but what it agreed upon.” He pledged on behalf of his rotten party: “So as our great Elizabethan era comes to an end, we will honour the late Queen's memory by keeping alive the values of public service she embodied.”

Jeremy Corbyn maintained his own record of acting only in the “national interest”, tweeting, “My thoughts are with the Queen’s family as they come to terms with their personal loss, as well as those here and around the world who will mourn her death. I enjoyed discussing our families, gardens and jam-making with her. May she rest in peace.”

Notwithstanding her personal characteristics, however, the ability of the late queen to act as a symbol of national unity depended on the broader ability of the bourgeoisie to prevent social tensions from reaching the point of explosion.

The “Second Elizabethan Age” first proclaimed by Winston Churchill spanned decades following World War II in which capitalism was able to provide rising living standards for the working class and the reformist nostrums of the Labour Party and the trade unions appeared able to at least partially satisfy the demands of workers for a living wage, education, housing, health care and other essentials.

The precipitous decline of the monarchy beginning in the 1990s is only one expression of how all the political instruments of bourgeois rule, above all the trade unions and the Labour Party, now confront workers as the defenders of a system that is plunging them ever deeper into unbearable hardship and threatening their very survival as the war against Russia rages out of control. Whatever the immediate impact of the queen’s death, a decisive conflict between the working class and British imperialism is developing inexorably.

US and Israel escalate covert war against Iran and its allies

Jean Shaoul

In the past weeks, the US and Israel have carried out a series of strikes on Iranian targets in Syria and elsewhere, setting the stage for a dangerous escalation of conflict in the Middle East.

On Tuesday, Israel launched its 24th reported strike on Syria this year, hitting Aleppo’s international airport, damaging the runway and putting the airport out of action. Warehouses belonging to Iran-linked militias and other compounds were also hit. Syrian state media said that air defences had intercepted Israeli missiles, downing several. This was the second attack within a week on civilian airports. On September 1, Israel struck Damascus airport, months after a previous attack, as well as Aleppo’s runway forcing an Iranian plane attempting to land to turn away.

This photo released Sunday June 12, 2022 by the Syrian official news agency SANA, shows a bulldozer work at a damaged runway of the Damascus International Airport, which was hit by an Israeli airstrike on Friday, in Damascus, Syria. Syria's Transportation Ministry said the Israeli airstrike caused "significant" damage to infrastructure and rendered the main runway unserviceable until further notice. [Photo: SANA via AP/WSWS]

State media also reported Israeli air strikes from the west, near the coastal city of Latakia, that according to the UK-based Syrian Observatory for Human Rights damaged an arms depot storing Iranian-made ground-to-ground missiles in Masyaf and whose production was overseen by the Islamic Revolutionary Guards Corps (IRGC). Masyaf has been the target of previous strikes, one of which injured 14 civilians. Other strikes on Damascus and Tartous killed three Syrian soldiers, according to reports.

Israel’s strikes generally go unimpeded by Russia’s air defence system in Syria, although occasionally provoking protests from Foreign Minister Sergei Lavrov. The New York Times reported that last year Syrian President Bashar al-Assad prohibited Iranian forces attacking Israel from Syrian soil, a ban that has been in effect for three years, to limit tensions between the two countries.

Israel’s strikes are aimed at disrupting Iran’s ability to fly in weapons to its allies in Syria and Hezbollah in Lebanon, with the US providing intelligence and military support for Israel. The attacks on Masyaf come after Russia’s removal of its S-300 anti-aircraft missiles from Syria to a Russian port near Crimea, according to Israeli satellite images, to bolster air defences against Ukraine. The more advanced S-400 battery remains in Syria.

On Wednesday, Ram Ben Barak, the chair of the Knesset’s Foreign Affairs and Defence Committee, threatened regarding the hit on Aleppo international airport, “The attack meant that certain planes would not be able to land, and that a message was relayed to Assad: If planes whose purpose is to encourage terrorism land, Syria’s transport capacity will be harmed.”

Syria’s Foreign Ministry said that Israel’s repeated airstrikes on civilian infrastructure constituted war crimes for which Israel should be held to account.

The latest airstrikes come amid three days of US airstrikes, authorised by President Joe Biden, on the Ayyash depot in the eastern province of Deir el-Zor on August 24. While the US claimed there were no casualties, a local website reported that IRGC-backed Afghan Fatimeyoun Brigades control the Ayyash complex and that 10 militia members were killed and at least three others wounded.

The US said that the strikes were in response to rocket and drone attacks on three US-led coalition bases in Syria launched by groups linked to the IRGC in Iraq: the attack on the al-Tanf garrison on Syria’s southern border with Iraq and Jordan launched from Iraq, the second on the Mission Support Green Village, east of the Euphrates River in rural Deir el-Zor, which provides “protection” for its Kurdish allies, and the third on the Mission Support Site Conoco in northeast Syria on August 15. These strikes follow the US bombing in June of facilities in Iraq and Syria Washington claimed were being used by Iranian-backed militias to attack the US and its proxies in Syria.

The US has since early 2016 stationed troops at al-Tanf, situated close to the strategically important main Baghdad-Damascus highway, and the Green Village, supposedly to counter the threat from Islamic state. This is defiance of Syria which views the base as a gross infringement of its sovereignty. Some 900 US troops are stationed in Syria, as well as US contractors.

The US and its regional allies have set up a network of unmanned drones aimed at gathering intelligence information and curtailing Iran’s activities in Middle Eastern waters. The US Navy’s Task Force 59 has been operating 23-foot Saildrone Explorer drones in the Red Sea with cameras that can take 360-degree photos, while Task Force 153 patrols the Gulf of Aden, as the Pentagon diverts some of its forces to the Far East.

The Pentagon aims to have 100 naval drones in operation by next summer with additional countries joining the taskforce, possibly including Kuwait and Israel. This has led to two incidents in the last two weeks, where the US claimed that Iranian forces had attempted to seize drones.

The uptick in US and Israeli attacks on Iranian targets comes as Washington declared that Iran’s latest proposed changes to the text aimed at restoring the 2015 nuclear deal, unilaterally abandoned by the Trump administration in 2018, were “not constructive.” Tehran, desperate to get rid of the ever-tightening sanctions that have wrecked its economy, had largely withdrawn its preconditions for a deal, including that the US withdraw its designation of the IRGC as a terrorist organisation.

The US and its European allies are using their tried and tested ally, the International Atomic Energy Agency (IAEA), to criticise and bully Iran over its nuclear programme, pushing through a resolution in June censuring Iran over its supposed lack of cooperation with the IAEA. Director Rafael Grossi said that if this didn’t change over the next three or four weeks, “this would be a fatal blow” to reviving the nuclear deal, which the Europeans had backed but now appears to have been ditched by the Biden administration and the European Union (EU) under pressure from Washington.

Iran’s President Ebrahim Raisi has warned that any attempt to restore the nuclear deal would require UN inspectors to end their investigations, stating that, “Without resolving safeguards issues, talking about an agreement would be meaningless.”

Iran’s clergy-led bourgeois nationalist regime has always maintained that its nuclear programme is solely for civilian purposes. The major powers, the IAEA and the CIA, have all admitted that there has been no evidence of Iran having any type of nuclear weapons programme since 2003, as the current CIA Director and former deputy Secretary of State William Burns acknowledged in his autobiography.

The nuclear issue has long been a smokescreen. For more than 25 years, former Israeli Prime Minister Benjamin Netanyahu, aligned with the most anti-Iran political factions in Washington, has claimed that Tehran was just a year away from producing a nuclear bomb.

The Biden administration had initially hoped to use the renewal of the 2015 nuclear deal as a means of detaching Iran from Russia and China and opening up additional energy supplies to Europe. In the event, under Raisi, who hails from Iran’s conservative faction opposed to the 2015 deal, Tehran has sought to take advantage of the Russia-Ukraine war and western sanctions on Russia to stress Iran’s importance as a transport hub connecting China and Central Asia with Europe and Russia with India, in a bid to make it independent of the fate of the talks in Vienna, while keeping all options open.

It has signed an agreement with Baghdad to build a railway line between Shalamcheh and Basra, a vital link in its efforts to create a trade and transport corridor from the Gulf to Syria, Lebanon and the Mediterranean via Iraq.

China is considering transport projects linking Syria’s Mediterranean port of Tartus in the north with Iraq and a North-South highway and the establishment of a Free Trade Zone in Latakia, 100 km north of Russia’s naval base in Tartus. Beijing is also investing heavily in Iraq where Tehran wields considerable political and economic influence, financing $10.5 billion worth of energy and infrastructure projects, while working as a primary or subcontractors at 15 oilfields in southern Iraq.

Iran is trying to secure China’s support via its Belt and Road Initiative’s (BRI) flagship project of the China Pakistan Economic Corridor to develop its Makran coast close to Pakistan’s new Gwadar port and build ports and an oil export terminal in the Gulf of Oman, outside the Persian Gulf and the narrow Strait of Hormuz. The US role in policing the Gulf threatens not only Tehran but also Beijing’s vital energy supplies.

Cost of energy crisis pushes piles more pressure on UK’s National Health Service and social care

Rory Woods & Richard Tyler

Surging energy bills running into additional millions pose a direct threat to patients’ treatment in UK hospitals and resident’s wellbeing in care homes.

Rory Deighton, the senior acute lead of the NHS Confederation, representing National Health Service trusts across England, Wales, and Northern Ireland, explained, “This isn’t an abstract problem, as the gap in funding from rising inflation will either have to be made up by fewer staff being employed, longer waiting times for care, or other areas of patient care being cut back.”

The entrance to the Arthur South Day Procedure Unit at the Norfolk and Norwich University Hospital, January 2006 [Photo by Francis Tyers / CC BY-SA 4.0]

The NHS is already in a perilous situation because of years of underfunding, staff shortages and privatisation, further worsened by the COVID-19 pandemic, which is still placing a major burden on health and care services.

Experts fear hospital admissions will rise due to soaring inflation and resulting widespread fuel poverty, with many households forced to choose between heating and eating. The NHS Confederation has warned that fuel poverty means thousands of excess deaths this coming winter in a “humanitarian crisis”. As NHS trusts already starved of adequate funding are forced to slash patient care to pay for soaring energy bills, this “humanitarian crisis” will turn into a social catastrophe.

An investigation initiated by the BMJ (formerly, British Medical Journal) has found that rising energy prices will cost hospitals millions more each month. Many health trusts estimate energy costs will rise by up to 200-300 percent over the coming period, putting enormous pressures on hospital budgets. For example, Leeds Teaching Hospitals NHS trusts, which runs seven hospitals, told the BMJ it faced a 110 percent hike on the electricity and gas bills it had paid in early 2022. The trust is anticipating it will have to pay an additional £2 million a month from the beginning of 2023.

A Freedom of Information (FOI) request by the Metro newspaper found a similar situation at Manchester University NHS Foundation Trust, one of the busiest in the country, which expected its energy bills to rise by £4 million in the next financial year.

Since the government’s energy “cap” only applies to private households, health and care providers are exposed to the full surge in energy prices. As well as hospitals, local GP surgeries—which since the “reforms” introduced by the Cameron Conservative government in 2012 have had full responsibility for their own budgets—face eyewatering increases.

Doctors worry that without additional financial support to cover higher gas and electricity bills, cuts to staff or services could be unavoidable.

Dr. Paul Evans, a GP partner at Bridges Medical Practice in Gateshead, told gponline.com his energy bills could jump 50 percent this year. If doctors are forced to reduce their drawings from the practice to cover this, it would equate to “a real terms cut to partners’ pay” and more partners leaving the profession.

“Practices will cut expenses, maybe not covering holidays with a locum, maybe replacing expensive staff with cheaper ones; there’s only so far that partners’ incomes can fall,” Dr. Evans said.

The situation is equally dire in the social care sector. According to the National Care Association, representing small and medium-sized care providers, some facilities are predicting tenfold increases or higher in their energy bills, the effect of which would be “devastating”.

A care home whose fixed-term contract for electricity for the last two years amounted to roughly £20,000 per annum faces new charges of about £125,000 a year. The manager told the i newspaper this would mean residents being charged an additional £100 a week.

The four homes in Scarborough belonging to the Saint Cecilia’s Care Group spent £67,929 on gas in 2021. Managing director Mike Padgham told the paper that he anticipated this cost would rise to £166,637 for 2022, a 145 percent price hike. The electricity bill was expected to balloon by 90 percent.

“I’ve been [in] the sector 33 years. This is the toughest bit that I’ve known in that. It’s almost as challenging, if not more so, than Covid,” he said.

In Wales, some health boards are anticipating rises of at least 200 percent, a crippling increase in running costs. Similarly in Scotland, the health system faces gas and electricity bills set to rise by at least £70 million, with hundreds of GP and dental practices potentially unable to absorb the increases.

Taken as a whole, one estimate is that the NHS will need at least £4 billion to compensate for inflation during 2022, even before further possible rises in wholesale energy prices.

No assistance will be forthcoming from the government, which intends to slash public services to fund its war drive and maintain the profits of the major corporations. As the WSWS recently noted of new Prime Minister Liz Truss’s plans to massively ramp up military spending by 2030, “Paying for this would mean income tax increases of 5 percent and unprecedented cuts in social spending. £157 billion is equivalent to the annual spending on the National Health Service (NHS) for the whole of the UK.”

Instead, the burden will be borne by health workers and those in their care.

University Hospitals Dorset (UHD), which runs Royal Bournemouth Hospital and the Poole General Hospital, has stated that it needs to save £14 million this year. Managers have asked already burnt out, overworked staff to come up with “Cost Improvement Planning (CIP)” ideas, pushing them to further undermine their own terms and working condition and jeopardizing patient safety.

University Hospitals Dorset, which runs Royal Bournemouth Hospital and the Poole General Hospital, said it needs to save £14 million this year. Managers have asked already burnt out, overworked staff to come up with "Cost Improvement Planning" ideas, pushing them to further undermine their own terms and working condition and jeopardizing patient safety. [Photo: WSWS]

A front-line nurse spoke scathingly about the scheme: “Everything is cut to the bone. There is no room for further cuts without risking patient lives. Over the last 10-12 years, consecutive governments starved the funds going to hospitals. We haven’t got enough nurses and other health workers. How can we look after patients safely? Every day we function without a safe level of staff in the majority of wards. Nearly 1,400 patients died of COVID in our trust alone.

“We have seen a massive erosion of the nutritional value of patient diets. My colleagues often wonder if the food is meant for feeding the birds when they see the portion sizes.

“They suspended parking charges temporarily in 2020 during the pandemic, when we were being cheered by the government as ‘heroes’. Then management resumed charging health workers to come to work from June this year. They have already increased the parking charges and plan to increase them again.

“The Bournemouth Private Clinic was established a few years ago. The aim was to try and compensate for funding shortfalls and promote privatisation. It effectively created a two-tier system for patients.

America: The Land of Inequality

David Rosen

Photograph by Nathaniel St. Clair

“America is the land of opportunity – there is no other country where I could have done this,” declared Elon Musk in 2020.  He is founder of Tesla and SpaceX, and has a current estimated net worth of $254 billion.

But is it a land of opportunity for all?

In January 2022, the U.S. Census Bureau reported that in 2020, there were 37.2 million people in poverty, approximately 3.3 million more than in 2019 – that’s an official poverty rate of 11.4 percent, up 1.0 percentage point from 10.5 percent in 2019.  The “poverty threshold” for a four-person family in 2020 was $26,496.

The Census Bureau also reported that between 2019 and 2020, the poverty rate increased for non-Hispanic Whites and Hispanics. Among non-Hispanic Whites, 8.2 percent were in poverty in 2020, while Hispanics had a poverty rate of 17.0 percent.  In addition, Black Americans had the highest poverty rate at 19.5 percent.

Economic inequality involves differences between (i) household income (often determined by wages) and (ii) personal or household wealth (determined by the value of assets such as a home or a savings account, minus outstanding debt [e.g., mortgage or car loan]). Such inequality reverberates through innumerable aspects of both personal and social.  Such inequality has increasingly come to (re)define “opportunity” — let alone life — in today’s America.

The economic difference between Musk’s wealth and the U.S. poverty rate illustrates the one – and perhaps gravest — form of inequality that defines American today, income and wealth inequality.  As Kimberly Amadeo points out, “Between 1979 and 2007, after-tax income increased by 275% for the most affluent 1% of households. It rose by 65% for the top fifth. For the bottom fifth, it only increased by 18%, even adding all income from Social Security, welfare, and other government payments.”

More revealing, the Federal Reserve reports that in 1989 the top 1 percent controlled 23.5 percent of the nation’s wealth and, in 2022, its share had increased to 31.8 percent or $44.9 trillion.  As Warren Buffett once said, “There’s been class warfare going on for the last 20 years and my class has won.”

Amadeo identifies the process of “class warfare” as “structural inequality,” noting that it “is a system of privilege created by institutions within an economy.”  She argues that such inequality involves “the law, business practices, and government policies. They also include education, health care, and the media.”  She adds most pointedly:

They are powerful socializing agents that tell us what we can achieve within society.  Inequality is structural when policies keep some groups of people from obtaining the resources to better their lives. They do not have a chance to pursue their idea of happiness.

She warns, “Structural inequality clouds this vision and limits economic growth for the whole society.”

The U.S. of A. is a capitalist nation with the “marketplace” mediating nearly-all social relations and, sadly, increasingly more and more aspects of personal life.

***

Inequality in America?  Let us count the ways.

Some of the ways are obvious even to those who close their eyes to the world around them.  They include:

Gender inequality

This involves discrimination based on sex or gender causing one sex or gender to be routinely privileged or prioritized over another.  And guess who still remain privileged?

Pew Research reports “the gender gap in pay has remained relatively stable in the United States over the past 15 years or so.”  In 2020, it reports, “women earned 84% of what men earned.”  It further points out, “based on this estimate, it would take an extra 42 days of work for women to earn what men did in 2020

Racial inequality

The U.S. has struggled over racial inequality since before it formally became a nation and fought a civil war over it and now, a century-and-a-half later, it still persists.

A 2018 Federal Reserve Bank of Minneapolis concluded, “The historical data also reveal that no progress has been made in reducing income and wealth inequalities between black and white households over the past 70 years.”

Racial inequality persists through the unequal distribution of economic opportunity, education, healthcare and neighborhood conditions. It involves racial disparities in wealth, education, employment, housing, mobility, health, rates of arrest and incarceration, to name but a few factors.

Of special concern, the nation’s demographic character is fundamentally changing.  As the 2020 Census makes clear that the demographic clock is ticking against the notion that the U.S. is a “white” nation.  The racial/ethnic composition of the country is changing and, by 2050, the U.S. is projected be a “majority-minority” country, with white non-Hispanics making up less than half of the total population.

Legal inequality

The Sentencing Project reports that “Black Americans are imprisoned at a rate that is roughly five times the rate of white Americans.”  Yet, Black or African Americans make up only 13.6 percent of the nation’s population.

A recent study by the National Academy of Sciences found that “dying at the hands of law enforcement is a leading cause of death among young Black men.”

Going further, it noted that “1 in 1,000 Black men and boys can be expected to be killed by police at some point in their lifetime.”  It also notes that that Black males are 2.5 times more likely to be killed by police than white males.”

Health/wellness inequality

Health and health care reflect the endemic disparities defining the broader inequities, especially racial discrimination.

Amidst the Covid pandemic, the U.S. was characterized by zones of “vaccine deserts,” geographic areas where people have little or no convenient access to vaccines. According to one estimate, 17 million people live in rural vaccine deserts and 50 million people live in urban vaccine deserts.

The outcomes from these deserts is obvious from the rates of Covid sicknesses and deaths experienced throughout the country.

Urban/rural inequality

The U.S. is becoming an ever-increasing urban nation with about 83 percent of the population living in cities. Rural America is losing it population to more attractive urban centers, most often supporting Democrats.

During the decade following the Great Recession of 2007–2009, Gross Domestic Product (GDP) growth in rural America lagged behind urban GDP growth.  Rural areas in the aggregate experienced post-recession growth of 14.8 percent while urban areas registered 19.2 percent growth.

These are but some of “inequalities” that define 21^st century America and there are still others.

***

Inequality in America takes many forms and structural inequality is significantly higher here than in almost any other developed nation — and its increasing.

And as inequality increases so does political polarization.  A Pew Research report finds that “Democrats and Democratic leaners are much more likely than Republicans and those who lean to the GOP to say reducing economic inequality should be a top priority for the government (61% vs 20%).”  It goes further, noting: “Democrats are nearly twice as likely as Republicans to say there’s too much economic inequality in the U.S. these days (78% vs. 41%).

This deepening political divide is most evident in higher vs lower income communities throughout the country.  In the 2016 election, “Trump votes was higher in counties with a higher share of white, middle-income, US-born, rural and less-educated voters. In that more unequal states were more likely to vote for Trump.”

Insight into the issue of income and voting is further revealed in a CBS survey for the 2020 elections.  It found that for families with income under $50,000, 55 percent voted for Biden while 44 percent voted for Trump; for families with income of $50,000 or more 51 percent voted for Biden while 47 percent voted for Trump.  However, for families with incomes of over $100,000, 54 percent voted for Trump while 42 percent voted for Biden.

Inequality will likely increase as we face the 2022 congressional and the 2024 presidential elections, and political divisions only intensify.  A new America, the land of inequality, is taking shape.