Free trade giving way to hi-tech war

Nick Beams

During the decade of the 1930s, the Great Depression ushered in by the 1929 Wall Street crash was characterised by the formation of trade and currency blocs as all the major capitalist countries carried out a nationalist economic agenda.

German Economy and Climate Minister Robert Habeck, center, talks with Justice Minister Marco Buschmann, left, and Finance Minister Christian Lindner, right, in Berlin, Germany, Wednesday, April 19, 2023. [AP Photo/Markus Schreiber]

The struggle of each against all, everyone for himself and the devil take the hindmost, led to a collapse of global trade—the world market all but disappeared—and played a not insignificant role in creating the conditions for World War II.

As a result of this experience, one of the key components of the global economic framework designed by the US, as it emerged from the war as the dominant imperialist power, was the insistence that the restrictive measures of the disastrous 1930s could not be allowed to return and free market principles had to be developed and extended.

This agenda is now being reversed by the US through the increase in tariffs and other restrictions in the crucial area of high-tech development. The latter is vital for the development of green industrial processes and more advanced computer chips necessary for the advancement of communications and artificial intelligence.

The Biden administration is providing major subsidies to high-tech firms which base all or part of their operations in the US. Its actions are bringing counteractions by other major powers leading to what has been described as a global subsidies race.

As an article in the Financial Times (FT) last week put it: “Billion-dollar packages including subsidies and investment incentives such as the US’s Inflation Reduction Act and Chips Act are already shaping business decisions and threatening a global subsides race.”

Referring to the rise of protectionist measures, it continued, “this wave of national industrial policies contrasts with decades of globalisation underpinned by free trade.” According to a survey of economists by the World Economic Forum (the organisers of the annual Davos gathering), “most experts think this paradigm shift will become the de facto approach to economic policy over the coming years.”

The level of tensions generated by the US measures is indicated by the remarks of Germany’s vice-chancellor and economics minister Robert Habeck to a business conference last month.

“It’s like a declaration of war,” he said. “The [Americans] want to have the semiconductors, they want the solar industry, they want the hydrogen industry, they want the electrolysers.”

In response, the FT reported, the European Union, Japan and South Korea have introduced subsidies for their high-tech and clean energy industries.

As Habeck remarked: “If we don’t keep up, they’ll have them [the key industries] and we won’t. That’s the brutal reality.”

The latest US measures are the acceleration of a trend going back to the aftermath of the global financial crisis of 2008, which was the focus of a one-day conference on geo-economic fragmentation convened by the International Monetary Fund in May.

In her opening remarks to the gathering, IMF deputy managing director Gita Gopinath said the present situation did not develop overnight.

“As momentum for traditional trade reforms stalled, trade restrictions and other distortive measures began to spread, especially in the aftermath of the global financial crisis,” she said.

The process accelerated because of the pandemic and the war in Ukraine which had “heightened concerns about national security and supply chain resilience.”

“These changes have ushered in the beginning of a new paradigm in the global economic order—one that shifts away from decades of global economic integration and in which inward- and alliance-oriented policies are gaining traction. Let me be clear, this is not just rhetoric. The early signs of fragmentation are taking root,” Gopinath said. She pointed to a “surge” in the number of trade and investment restrictions particularly in the high-tech sector.

The paradigm shift in the functioning of the global economy has attracted the attention of a number of economists concerned about where it is heading. Adam Posen, the president of the Peterson Institute for International Economics, has been one of the most vocal critics of what he calls “zero-sum economics.”

In an article in the Spring edition of the Foreign Policy magazine this year, he noted that the US was attacking the very basis of the international trade and investment order which it had designed.

“Along with members of Congress from both parties, the Biden administration has sought to take away production from others in a zero-sum way—explicitly from China and a bit more courteously from others,” Posen wrote.

Drawing out the implications of US attempts to impose “arbitrary export and import restrictions on China that extend to other countries,” he continued: “In order for such restrictions to succeed the United States would have to become a commercial police state on an unprecedented scale.”

He opposed the claim that the Inflation Reduction Act and the Chips Act would accelerate US growth beyond an initial spending bump, stating: “They will not revolutionise US competitiveness, and their implementation will most likely enrich small pockets of protected businesses rather than making a dent in reducing inequality. … What these programs will not do is accelerate the adoption of technology.”

He expanded on the central themes of the article in an interview with the FT last week.

Posen explained that what made the present version of industrial policy worse “isn’t just that they are large-scale and wasteful. The first big problem is viewing industrial competition as zero sum; the idea that you can create lasting competitive advantage so that your locally headquartered companies dominate an industry. The reason that’s bad is because a) it doesn’t usually work, and b) it just invites retaliation.”

In a caustic comment, he noted: “Russia and North Korea have worked very hard to be self-sufficient, with limited supply chains, and it has not worked out well for them.”

The real damage from decoupling and the conflict between the US, China and other economic blocs would be reduced productivity growth.

“So, if we continue down this path, we’re looking at a meaningfully bleaker outlook for average growth in the world,” he said.

Posen also referenced the experiences of the pandemic when hoarding by the major economics, including the US, resulted in the slow dissemination of vaccines and quality medical equipment to the developing world.

“There is no reason to think, barring significant changes in policy … that it will be any different with green technology.”

The analysis from the IMF and economists amid warnings that the policies initiated by the US can only bring about lower growth in an already fragile world economy raise the question: why are they being implemented?

The analysis by Leon Trotsky of the deepening trade wars of the 1930s points to the essential driving forces.

The idea of a planned or corporative state capitalism remained a lie, he wrote, insofar as it set itself the task of constructing a harmonious national economy on the basis of private property.

“But it is a menacing reality insofar as it is a question of concentrating all the economic forces of the nation for the preparation of a new war. This work is proceeding now with full steam. A new great war is knocking at the gates.”

The same can be said today. Much has changed since Trotsky wrote these lines in 1934. But the fundamental contradictions of capitalism, arising from private property and that between global economy and the system of rival nation state not only remain but have intensified and are threatening to plunge humanity into another global conflict.

Costa Rican workers strike against health care privatization

Andrea Lobo

Hundreds of workers and students joined a “Great March” against the ongoing privatization of the Costa Rican Social Security Fund (CCSS), known as the “Caja”, which manages the public health sector and pension system. The protest follows two strikes by health care workers on July 5 and 13 and a massive march in defense of public universities on June 21, in which thousands of workers and students participated.

Demonstration in defense of the Social Security Fund, or Caja, in San Jose, Costa Rica, July 15

The current upsurge of struggles in the Central American country of 5 million is part of a growing offensive by the working class to resist the attacks by the ruling elites against living standards and social rights amid rampant inflation, the ongoing COVID-19 pandemic, the Ukraine war and economic stagnation. There have been significant strikes and protests in recent weeks by health care workers in Argentina, Brazil, Britain and other countries, while major struggles continue in France against pension cuts and Sri Lanka against the IMF austerity cuts.

Often portrayed as a beacon of democracy and stability in Central America, Costa Rica is one of the most unequal countries in the world, and the ruling elite is sharply escalating a decades-long effort to dismantle the universal systems of public health care, pensions and education. 

Particularly since the 1980s, these institutions have been decimated in terms of infrastructure, finances and personnel.

Merceditas at July 15 march

Merceditas, a nurse at the Mental Health and Psychiatry Hospital, explained to the World Socialist Web Site at the demonstration, “We are in no condition to privatize the medical services. This is a plot that has been intentionally provoked to say the Caja is bankrupt. It is not. We, the workers, maintain it with our salaries. Every two weeks it gets deducted automatically from our paycheck. The issue is that the government refuses to pay its debt to the Caja and forgives the large corporate tax evaders.” 

Amid the COVID-19 pandemic, she said, “we gave our lives and continue to give our lives. We will continue to give everything. We are very responsible workers and will always be there for the patient. Costa Rican nurses have come out very hurt, with all the human pain we have endured and continue to suffer.” She added, “for three years, they have not raised our wages and everything keeps getting more expensive, gas, food; everything goes up and we need to live.” 

Doris, a nutritionist with 30 years experience at the Caja, said to the WSWS: “If you are unemployed and do some paperwork, you can get insured by the state, even if you don’t contribute 5 colones, you have the right to be treated. This struggle is for the Caja to have the economic solvency to attend everyone equally and for the quality to improve.”

As a result of decades of austerity diktats from the International Monetary Fund and World Bank, workers have been increasingly compelled to spend more for services in the growing private insurance services, clinics, pensions and schools. 

Over three-fourths of Costa Ricans now frequently use private health care services, given the long waiting times of months and even years for tests, medical evaluations, treatments and surgeries under the Caja. The vast majority of Costa Ricans, however, still rely on the more than 30 hospitals and 1,000 local clinics (EBAIS) under the Caja. 

Jonathan, a private sector worker at the protest, explained: “I am receiving treatments by the Caja so I’m supporting them. We are living through a crisis and they want to cut everything with scissors. This is bad because it creates economic stagnation; there is no employment. Costa Ricans need to understand that we need skilled professionals for everything, with a good salary, quality people that earn well. If you make enough to pay a private clinic, that is only for a few tests, not all, and much less a surgery… We must fight.”

University of Costa Rica students demonstrate in defense of the CCSS. Mariel and Luis, on the left

Luis, a University of Costa Rica (UCR) student, explained that all sectors of workers and youth need to defend the Caja. “Many of us can’t afford a private hospital and when we graduate from college and have a decent job, we will be able to pay to the Caja and strengthen the health care system so that workers who have not had the same opportunities as us, those who have to work in extremely precarious employment, have access to an institution like the Caja, to be insured with decent healthcare and a living pension.”

In Costa Rica, 12 percent of the workforce is unemployed and 44 percent work informally, which means they are unaffiliated to the CCSS. “These attacks,” Luis added, “will only make it harder for all these people struggling and the next generations to have access to such basic rights as a decent health care and pensions, because we don’t live in an egalitarian society.”

Mariel, another UCR student at the demonstration, added: “This is an issue that will require a lot of strength [to counter]. We need people to get angry, to understand the gravity of the situation in the Caja, the gravity of the employment situation, of public education, how the government is going crazy with all this. It’s necessary for people to get involved, for the student and workers movements to rise up against these moves.” 

In 2018, a three-month strike by public sector workers —the longest strike in the country’s history— led to a general strike and the largest demonstrations seen in decades to oppose regressive taxes and attacks on social spending. The government of then-president Carlos Alvarado (Citizens’ Action Party; PAC) responded with police repression, the ramming through of the regressive value-added tax, spending ceilings, pension cuts and other social attacks, as well as a draconian anti-strike law. 

Regardless, 2018, 2019 and 2020 were characterized by mass strikes, widespread roadblocks by workers in the most impoverished suburbs and rural communities, and occupations by students against these attacks. But each time the trade unions and their pseudo-left apologists, chiefly the Broad Front, have betrayed these struggles. These layers of the upper middle class have consistently prioritized keeping a seat at the table and enjoying the revolving door between unions, politics, posts in the bureaucracy, NGOs and academia.

In particular, the Broad Front, which joined the government of Alvarado, has played a key role in channeling social opposition behind the trade union bureaucracy and talks with the government and the same political forces that have rammed through one wave of cuts after the other.

A young private sector worker at the march, Diego, said the government is seeking to “create a failed state so that many sectors of society have little incentive to defend what is already failing; the health care system is failing them, the education system is failing them. What incentive is there to respond to the call by a trade union when they feel that it’s not working, that political movements are unable to make it work.” He added, “This is leading to a situation similar to other countries in the region where policies are imposed by force.” 

Alvarado’s former finance minister, Rodrigo Chaves, was elected President in 2022 as candidate of the new Social Democratic Progress Party. A former World Bank official, Chaves had already made clear that the CCSS was his main target, declaring shortly after the COVID-19 pandemic began in 2020 that “the country could not go bankrupt to save it.” 

Since coming to power, he has made repeated attacks on the CCSS, public health—including support for anti-vaccine activists—the universities, the Bank of Costa Rica and other public institutions. A Public Employment Law came into effect in March establishing a “global wage” level for most workers in public institutions, eliminating most benefits, wage adjustments to inflation and seniority won in numerous struggles in the 20th century. The measures will freeze salaries for decades until the “global salary” creeps up each year and matches their current wages. 

Workers at the march, as well as several analysts, have indicated that these measures are unconstitutional and will disproportionately impact those workers at lower wage levels. Moreover, this will accelerate privatization, creating incentives for employees and users to switch to the private sector.

One of the triggers for the recent protests in defense of the Caja was the announcement that about one-third of health care employees, some 20,000, have been deemed “non-essential” and will be deprived of their “exclusive” status, which comprises higher wages and benefits. Moreover, the government has openly refused to meet its obligation to pay its US$5.5 billion “debt” to the CCSS derived from the care for uninsured patients, as part of the “solidarity” model established constitutionally since the institution was created in 1941. 

While the corporate media and Chaves have claimed that public sector workers are privileged and their relatively higher wages are the cause of government debt and “necessary” social cuts in general, his government and its predecessors have acted as puppets of the international and local banks that profit from debt payments, as well as the corporations enjoying tax breaks and cheap labor in special “free zones.”

According to the Economy Ministry’s 2023 proposal, 47 percent of the national budget will be assigned to paying debt holders, which has been the fastest growing component for years, while only 22.5 percent will go to wages, benefits and pensions of public employees.

US flying blind amid warnings of new COVID-19 surge

Evan Blake

By multiple early indications, the United States has entered yet another surge of the COVID-19 pandemic, with wastewater levels, emergency room visits for COVID-19 and test positivity rates all on the rise across much of the country.

Between June 24 and July 12, the Biobot wastewater tracker showed a 46 percent increase nationally, concentrated in the South and on the coasts. According to one infectious disease modeler, these wastewater levels translate to roughly 280,000 Americans presently being infected with COVID-19 each day and rising.

The latest data from the US Centers for Disease Control and Prevention (CDC) show that there were 10.7 percent more emergency department visits for COVID-19 nationally last week compared to the previous week, with Alaska, Florida and Hawaii reporting the highest rates of growth. CDC data also show that test positivity rates nationally were up by 0.7 percent last week, with Arizona, Arkansas, Idaho, Louisiana, Oklahoma, Oregon, Texas and Washington logging rates above 7 percent.

If these data continue along current trends, this will be the first surge in the US since the World Health Organization (WHO) and the Biden administration ended their COVID-19 public health emergency (PHE) declarations in early May.

These premature and unscientific decisions prompted numerous world governments to stop virtually all surveillance of the pandemic. In the US, the CDC abruptly ended all COVID-19 case reporting, while the Biden administration disbanded the White House COVID Response Team and CDC Director Rochelle Walensky resigned from her post.

As a result of the ending of COVID-19 case reporting, it is impossible to correlate early warning signs like wastewater data and emergency room admissions with national or local statistics on the number of COVID-19 cases. These simply do not exist, because the means to track them have been systematically dismantled.

In response to this total abrogation of public health, every corporate media outlet in the world largely stopped covering the pandemic altogether, a sinister form of silent propaganda meant to provide cover for the ongoing crimes of the capitalist ruling elites.

On Monday, New York Times columnist David Leonhardt broke this silence with a dishonest and evidently mistimed editorial that cherry-picked a single data point in just four countries to falsely proclaim that “the pandemic really is over.”

Leonhardt is the Times’ pandemic minimizer-in-chief. Through his widely read newsletter The Morning, which was launched in May 2020 to serve as a daily pandemic update, he has repeatedly declared the pandemic over prematurely, discouraged masking and other mitigation measures, downplayed the severity of COVID-19 in children and immunocompromised people, erased the experience of millions suffering from Long COVID, and sought to elevate individualism as the guiding principle of public health policy.

Leonhardt’s pragmatic, shortsighted and unscientific views epitomize and guide those of the Times’ largely affluent middle-class subscribers, and have helped craft and justify every criminal pandemic policy of the Biden administration over the past two-and-a-half years. Earlier in the pandemic, Biden himself stated that he was one of Leonhardt’s readers.

Titled, “A Positive Covid Milestone,” Monday’s newsletter cites data indicating that excess deaths in the United States, India, Britain and Brazil are currently at pre-pandemic levels. From this single data point, Leonhardt draws the sweeping and false conclusions that “[t]he pandemic is finally over,” COVID-19 is no longer “a dire threat to large numbers of people” and “the virus has turned into an ordinary illness.”

Leonhardt, who is widely loathed by principled epidemiologists and scientists who have sought to educate the public throughout the pandemic, was lambasted on Twitter for his latest piece of drivel. One of the most widely shared rebuttals of Leonhardt came from health law scholar and bioethicist Blake Murdoch of the University of Alberta.

“False,” Murdoch wrote. “If the pandemic was truly over, excess deaths would run significantly below historical averages for quite a while, reflecting all the people who didn’t die because they already died prematurely of covid. Many people are still dying.”

In addition to drawing sweeping conclusions from this single data point, the fundamental fallacy of Leonhardt’s argument is its nationalist perspective. By definition, a pandemic is a global phenomenon whose development is not determined by any single country.

When examined at the global level, the data point that Leonhardt cites—excess deaths—clearly remains highly elevated, with The Economist estimating that nearly 9,000 people continue to die each day globally above pre-pandemic figures. In total, there are now 24.1 million excess deaths, with nearly one million added to the death toll every three months.

Further, the pandemic cannot be measured solely by excess deaths. In this respect, Leonhardt’s cherry-picking of this data point underscores the dishonesty of his writing. The words “variant,” “viral evolution,” “Long COVID,” “cases,” “testing” and “wastewater” are all omitted from his article, because each of these facets of the pandemic shows that it is ongoing and remains a threat to masses of people globally.

Alongside the evident surge in the US, Japan is now in the grips of its ninth wave of the pandemic, centered on the poorest island, Okinawa. Hospitals are once again strained to capacity, with one healthcare worker telling the Okinawa Times, “The situation is not so much a medical crisis as a collapse of the system.”

This follows China’s massive second wave of the pandemic in recent months after the disastrous lifting of its Zero-COVID elimination strategy last winter.

For those suffering from Long COVID—now estimated at roughly 20 million Americans and potentially hundreds of millions more people globally—the pandemic is an ongoing nightmare. As he has done throughout the pandemic, Leonhardt ignores and covers up this hidden iceberg of masses consigned to a fate of perpetual disability with no end in sight.

Finally, contrary to the self-deluded view of the Times and the Biden administration that “the pandemic really is over” and “the virus has turned into an ordinary illness,” principled scientists remain deeply concerned about the ongoing dangers of viral evolution.

Speaking at last month’s American Society for Virology conference, noted evolutionary biologist Trevor Bedford stressed that SARS-CoV-2 is “evolving just as fast as it was in 2021, evolving about two-and-a-half times faster than influenza H3N2… and is not really showing signs of slowing down.”

In one of the sharpest warnings against the flippant outlook epitomized by Leonhardt, last month biologist Arijit Chakravarty told the World Socialist Web Site, “Not only is the pandemic very much not over, but by creating the impression that the pandemic is over in the face of rampant viral spread and continuing rapid viral evolution, we are essentially sticking our chin out and asking the virus to do its worst.”

Chakravarty, whose research team has continuously been proven correct in its pandemic projections, stated emphatically:

I can’t predict the outcome of the next wave. I can’t predict the outcome of the next five waves. But, at the rate that we are going, a prediction can be made with a high degree of certainty that something bad will happen sooner than later along these lines. Keep this pandemic running for another five years, and you’ll face a debacle on a scale that you haven’t yet seen. That’s a given.

Throughout the pandemic, the New York Times has provided essential ideological justification for the American ruling class’s homicidal profits-over-lives policies and the destruction of public health. This began with Thomas Friedman’s infamous declaration that “the cure cannot be worse than the disease,” picked up by Trump as his “herd immunity” mantra. The baton was soon passed to Leonhardt, whose latest column is one of dozens filled with misinformation.

At the same time, the Times, the Washington Post and numerous other outlets gave credence to the Wuhan Lab Lie concocted by the fascist Steve Bannon in January 2020. This conspiracy theory, designed to deflect anger towards China for the US ruling elite’s policies that have killed well over 1.1 million Americans, was most recently given an antisemitic spin by Democratic presidential hopeful Robert Kennedy, Jr., which the Times and other media outlets have downplayed.

Hundreds of refugees missing near the Canary Islands

Martin Kreickenbaum

Three boats with a total of more than 300 refugees are missing in the Atlantic Ocean off the Canary Islands. A search has so far been unsuccessful. As a result of this new horror, the official number of refugees who have drowned in the Mediterranean and Atlantic while attempting to reach European Union (EU) countries this year has risen to more than 2,000, and the actual death toll is undoubtedly much higher.

Photo from a migrant boat [Photo by Sara Prestianni / Flickr / CC BY 2.0]

The responsibility for this mass death lies entirely with the EU leaders: in their refugee deterrence, they have no compunction about allowing people to drown to prevent others from fleeing to Europe.

Dozens if not hundreds of refugees who set out on the dangerous sea passage but don’t reach their destination are added to the registry of the dead each week.

A spokesman for the Spanish refugee aid organization Caminando Fronteras (Walking Borders) reported that two boats, each carrying around 60 refugees, left Senegal on June 23. Following that, an even larger boat with 200 refugees on board, including many children, ventured on the more than 1,700 kilometer-long route to the Canary Islands from the Senegalese coastal village of Kafountine on June 27. Caminando Fronteras fears “another catastrophe.”

Family members of the refugees informed the aid organization after contact with the boats was lost. A search initiated by the Spanish Maritime Rescue has so far been unsuccessful. The rescuers found a boat with 78 refugees on board last Monday, but according to Caminando Fronteras, it is not one of the three missing boats. Reports that the 200 refugees were found on Monday also turned out to be false.

According to the Senegalese Ministry of Foreign Affairs, the 260 refugees rescued from distress in Moroccan waters between June 28 and July 9 are also passengers from other boats, not the missing ones.

The search for the refugees sheds light on one of the deadliest sea routes in the world. The EU’s brutal closed-border policy forces refugees to choose longer and more dangerous routes to escape war and misery. The Canary Islands, a Spanish autonomous community and archipelago, are only 100 nautical miles from the Moroccan coast. However, many refugee boats depart further south from Senegal, Gambia or Guinea.

The crossings take between one and ten days depending on the length of the route. An EU report on the West African route asserts: “Usually, after only a few days, migrants face significant problems such as food, water and fuel shortages.” Nevertheless, the EU has drastically reduced sea rescue efforts in this region, as well as in the central Mediterranean.

The Spanish government recognized Morocco as the administrative power of Western Sahara in early 2022, and has since shifted responsibility for sea rescue missions to the Moroccan coast guard. However, it is far less well equipped and takes far more time than its Spanish counterpart to reach the people in distress at sea.

At the end of June, an inflatable boat that had left Dakhla in Western Sahara with 60 refugees on board was in distress at sea. After a Spanish reconnaissance plane spotted the stranded boat, it took more than twelve hours for a Moroccan coast guard patrol boat to arrive at the scene of the accident. Only 24 people were rescued.

“The people in this inflatable boat were hoping to be rescued in Spanish waters for more than twelve hours in vain,” Helena Maleno Garzon, founder of Caminando Fronteras, said in a social media post.

The aid organization Alarm Phone, which accepts and forwards emergency calls from refugees in distress at sea, also strongly criticized the expansion of the Moroccan area of responsibility for sea rescue. “This is very worrying, because the Moroccan authorities have repeatedly shown an unwillingness to carry out a safe and rapid rescue–often at the expense of human lives,” a September 2022 report said. In addition, Morocco does not send rescue boats, but warships, and deports the apprehended refugees to the countries from which they fled.

Four refugees die every day in the Atlantic

On the route to the Canary Islands alone, according to Caminando Fronteras, 778 refugees have drowned in 28 boat accidents in the first six months of this year. And this figure does not include the 300 missing refugees. Every day, more than four people die in the Atlantic. Between 2020 and 2022, more than 7,500 refugees drowned on their way to the Canary Islands. With the total number of registered arrivals being 60,000, the death rate is more than 10 percent.

Caminando Fronteras' figures significantly exceed those of the International Organization for Migration's (IOM) Missing Migrants Project, as it also includes information from family members who are missing their relatives. The IOM, which has so far registered “only” 200 drowned refugees on the Atlantic route for this year and cites official figures, itself says that it is “a cautious estimate” and that the actual number of victims is far higher.

Last Wednesday, eight bodies were recovered from a wooden boat off the coast of Senegal, while 155 refugees were rescued in the incident. A few days earlier, a boat with 57 refugees on board capsized, of whom only 50 could be rescued. At the beginning of July, 51 refugees, including three children, perished trying to cross from southern Morocco to the Canary Islands. Motor damage caused the inflatable boat to drift in the Atlantic for more than a week. Rescuers found only four survivors.

Mehdi Lahlou, migration expert at the National Institute of Statistics and Applied Economy in Morocco, told Deutsche Welle: “Due to increased controls in northern Morocco, Libya and Tunisia, migrants from the countries of northwest Africa are increasingly choosing the route via the Canary Islands.” In view of the risks of the crossing, however, professional and coordinated sea rescue is absolutely necessary. In fact, rescue missions are launched much too late, poorly coordinated and poorly equipped. Caminando Fronteras therefore insists that both the Spanish and Moroccan authorities “instead of defending the right to life are guided only by the geopolitical interest of controlling and limiting immigration.”

EU agreement with Tunisia

The EU is deliberately shifting the responsibility for sea rescue to the countries from which the refugee boats leave. This policy prevents refugees rescued at sea from having to be brought to European ports, and thereby accepts the deaths of thousands of refugees. In recent years, the EU has intensified cooperation with the Libyan government and Libyan warlords, resulting in refugees being detained, mistreated and sold as slaves in Libyan detention camps under horrendous conditions.

Most recently, the EU reached an agreement with the Tunisian government on refugee deterrence. This was preceded by high-level visits by EU Commission President Ursula von der Leyen together with Italy's fascist Prime Minister Giorgia Meloni and Dutch Prime Minister Mark Rutte, as well as a visit by German Chancellor Olaf Scholz together with French President Emmanuel Macron.

They met with Tunisian President Kais Saied, who only a short time prior was being criticised by the EU Parliament for human rights violations and his authoritarian style of government. The EU has pledged at least €100 million [$US112 million] to Saied for refugee deterrence and intends to deliver boats and other equipment.

Immediately following the visits, the Tunisian authorities began fulfilling their assigned role as the guard dog of Europe’s external borders with brutality and ruthlessness. Hundreds of refugees in the Tunisian port city of Sfax were transported in buses and deposited in the Tunisian-Libyan or Tunisian-Algerian border area without any supplies. An eyewitness told AFP that two convoys of refugees had been brought to the border region. Youssouf Bilayer, a 25-year-old Ivorian, reported that the refugees were “transported in six buses and dropped off in the forest. They beat us up to get us out of the vehicle.”

The human rights organization Human Rights Watch (HRW) estimates that there are many children among the hundreds of such displaced refugees. If they don't get help as soon as possible, their lives will be in serious danger. According to HRW, several people have already died. A heavily pregnant woman from Guinea died when her contractions started as a result of the stress, and her baby also died with her.

Mamadou, who had fled Gambia, spoke to AFP on the phone. “If you can send the Red Cross, help us–otherwise we will die. There's nothing here. There is no food, no water.” The next day Mamadou was no longer available. According to HRW, the Tunisian security forces are systematically destroying the refugees’ mobile phones. The region is also extremely remote and militarized, making aid operations next to impossible. The Tunisian government is using this inhumane and murderous approach to obtain much-needed loans and financial aid from the EU.

Global heatwave exacerbates social crisis across US, Europe, Asia and Middle East

Bryan Dyne

Phoenix, Arizona, recorded its 19th consecutive day with high temperatures above 110 degrees Fahrenheit (43.3 degrees Celsius) on Tuesday, temperatures that are forecast to persist through Sunday. The town of Sanbao, China, registered a national record high temperature of 126 degrees Fahrenheit (52.2 C), shooting past a record 122 degrees Fahrenheit (50.3 C) set in 2015.

Two homeless men with ice on July 14, 2023 in downtown Phoenix, which hit 112 degrees that day, marking the city's 15th consecutive day of 110 degree-plus temperatures. [AP Photo/Matt York]

In Italy, temperatures shot past 107 degrees Fahrenheit (41.8 C) in Rome and 113 degrees Fahrenheit (45 C) in Sardinia. And at the Persian Gulf International Airport in Iran, the heat index soared to an unprecedented 152 degrees Fahrenheit (66.7 C).

The temperature records set Tuesday and those that have been set since the beginning of July are demonstrative of what is increasingly emerging as a “new normal” for the world’s climate. With the continual increase in the emission of greenhouse gases into Earth’s atmosphere (e.g., carbon dioxide, methane), more heat from sunlight is trapped and gives rise to the extreme weather phenomena—heat domes, polar vortexes, prolonged wildfires, torrential flooding, savage hurricanes—that are now directly attributed to global warming.

The immediate cause of the current temperatures are four “heat domes” that have currently centralized over the southern United States, the North Atlantic, North Africa and the Middle East and South Asia. Heat domes are immense high pressure systems filled with hot air that prevent colder air from coming in and reducing temperatures. In addition to heatwaves, heat domes exacerbate wildfires, droughts and other heat-related weather disasters.

The toll on human life is immense. There were more than 61,000 heatstroke and heat-related deaths in Europe last summer, according to a study in Nature Medicine published last Friday. Data from the National Weather Service in the United States shows that deaths from extreme heat are eight times higher than deaths caused by hurricanes over the last decade.

Heat deaths particularly impact workers forced on the job in unsafe and deadly conditions. Thousands of migrant workers in Qatar, many of whom were construction workers building stadiums and other facilities for last year’s world cup, have died from heatstroke and other related illnesses such as kidney failure from dehydration, according to separate research by the journal Cardiology and the Guardian. A 2021 study by the Los Angeles Times found that nearly 400 people die from heat in California each year, the majority of them among the elderly, the homeless and construction, agricultural and warehouse workers.

Just last month, USPS letter carrier Eugene Gates Jr. died on the job the same day temperatures in Dallas-Fort Worth spiked to 113 degrees Fahrenheit (45 C). His story is among the many thousands of workers in construction, auto, logistics and numerous other industries being forced into unsafe and deadly conditions without safety equipment for the profits of their employers. All of these deaths have gone largely unreported by the corporate media.

And the scale of death is only going to increase as global temperatures continue to rise. The temperature noted above in Iran in particular is a warning that portions of Earth’s surface may become uninhabitable to human life in the near future. The temperature, humidity and other factors reached 92.7 degrees Fahrenheit (33.7 C) on what is known as the “wet bulb” temperature scale.

While not designed as a metric of how hot a given day feels, the scale estimates at what point the human body’s ability to cool itself, such as through radiating heat and sweating, stops working. That limit is 95 degrees wet-bulb Fahrenheit (35 C), which was almost reached in Iran. If carbon emissions continue unabated, large portions of South Asia and the Middle East could reach these inhospitable conditions regularly in the second half of the 21st century.

Shelter, rest and water are largely the solution to mitigating and preventing heat-related injuries and deaths, but the infrastructure to provide such things is largely crumbling, even, in fact especially, in the world’s richest countries. In Phoenix, Arizona, as a result of budget cuts for cooling centers and hydration stations, only one city-run cooling center for the metropolitan area’s homeless population remains open during the nighttime, when the lows only drop to 90 degrees Fahrenheit (32 C). Just last year, the county in which the city resides recorded 425 heat-related deaths. Alongside those are thousands of heat-related injuries, including simply standing on hot concrete while barefoot, which can result in second-degree burns in seconds.

The lack of infrastructure in Phoenix for workers and the poor to protect themselves against extreme weather is just one example of the class divide that exists surrounding climate change. The capitalists have caused the crisis and their loyal corporate media acolytes worked to suppress warnings about the dangers for decades, until the impacts were too apparent to ignore. Moreover, the wealthy have the resources to either survive extreme heat or frigid cold, or simply relocate elsewhere temporarily to avoid the impacts of the ecological crisis the social system which they defend caused.

The deaths caused by climate change are among the many ways the ruling elite expresses its indifference to the lives of workers. Just as with the coronavirus pandemic and the US/NATO war against Russia in Ukraine, no amount of suffering is allowed to get in the way of soaring Wall Street profits. Vast sums of money are spent for colossally destructive ends while an increasingly small pittance is given for the basic maintenance of social life.

Rising financial distress in Australia triggers surge in calls to suicide hotline

Taylor Bennington & Maya Hunt

Recent statistics from Lifeline, one of Australia's leading crisis support and suicide prevention services, reveal a significant increase in demand for their non-profit services in the first five months of 2023.

Unemployed workers registering to receive social welfare outside Centrelink office in Sydney in 2020.

During this period, Lifeline received an average of 3,000 calls per day, nearly 500 more than over the same period in 2019. Of these calls, approximately 50,000 were related to financial distress, averaging around 331 callers per day, surpassing the 2019 figure of 36,000 calls or 238 per day. Lifeline emphasises, however, that the number of individuals seeking help due to financial stress is likely even higher, as many callers are unable to articulate the specific reasons for their crisis.

In February 2022, Lifeline expanded its services to include a 24 hours a day, 7 days a week online chat and texting service. These additional services have also experienced an increase in demand, with Lifeline reporting an average usage of 682 times per day this year. Moreover, data from Lifeline’s search engine reveals that in January there were more than 26,000 searches for assistance and support, the organisation’s highest monthly tally.

Lifeline receives just 70 percent of its funding from governments, and relies on volunteer workers. The Herald Sun last Saturday reported that around 200,000 calls to the hotline go unanswered each year—in the state of Victoria, 360,000 calls are made to Lifeline each year but only 12 percent of these are answered.

Lifeline’s chief research officer, Dr. Anna Brooks, earlier this year highlighted the impact of rising interest rates on mortgage and rental costs. She explained: “Financial stress and uncertainty can contribute to mental ill health. There is also evidence to suggest that people can experience distress and suicidal thoughts when facing financial stress and uncertainty.”

Sophie Hattch, a 27-year-old Lifeline volunteer crisis supporter taking incoming calls, told the Sydney Morning Herald: “Mental health support has always been expensive, but the difference now is that people are struggling so much more to pay for the bare minimum. People are calling who have had to move away from their family and support networks because they can’t get a rental property, or they can’t afford one, and it feels anecdotally that there are more people calling with those kinds of issues. Before, it really was a small part of the population.”

Other mental health services have noted similar trends to those reported by Lifeline. A recent survey conducted by the Beyond Blue mental health support organisation found that over one-third of respondents indicated that financial pressures negatively affected their mental health in the past year.

The National Debt Helpline has also experienced a significant surge in calls, with a nationwide rise of 30 percent compared to the same period in 2022. In the Australian Capital Territory and Victoria, the number of calls received by the help line doubled compared to last year.

The cost of essentials such as food, energy and housing prices has significantly increased beyond the official inflation rate of 7 percent. The impact on working class households has been exacerbated by the Reserve Bank of Australia’s series of interest rate rises. For those with a $500,000 mortgage, interest rate hikes have slashed monthly disposable income by $1,200, marking the most significant cut to living standards since World War II.

Research published last year by Beyond Blue found that individuals facing financial difficulties are more than twice as likely to experience psychological issues compared to those who are not. The reverse is also true—people experiencing mental health problems often experience financial stress as a result, due to unemployment and challenges managing budgets.

Young people are especially affected. The Australian Bureau of Statistics has reported that the annual prevalence of mental ill health among 16 to 24 year olds surged from 26.4 percent in 2007 to 39.6 percent in 2020-21, marking an extraordinary rise of 50 percent in just over a decade. Tragically, this has led to a rise in people taking their own lives. Last year’s Australian Institute of Health and Welfare “Deaths in Australia” report showed that between 2018 and 2020 suicide was the leading cause of death among people aged 15–24, at 38 percent of total deaths, and for people aged 25–44, 22 percent of total deaths.

A research study published July 12, analysed suicide data in Australia between 2004-2016 and reported “clear evidence” of a causal connection with unemployment and underemployment. The paper, “Unemployment and underemployment are causes of suicide,” found that approximately one in ten deaths were directly due to what the University of Sydney researchers termed labour under-utilisation.

They explained: “Unemployment and underemployment are associated with multiple potential risk factors for poor psychological health, including financial hardship and poverty, lower self-perceived social status, and reduced social network size and availability of social (practical and emotional) support.”

The researchers added, in an accompanying commentary, “A direct causal relationship between unemployment and suicide demands a re-evaluation of policies, a prioritisation of full employment, adequate social safety nets to prevent poverty, mental-health system reform, and greater urgency in shifting to a wellbeing economy.”

In reality, successive Labor and Liberal-National governments at both the state and federal level have slashed social services, eroded real wages and job security, and privatised and cut to the bone the provision of healthcare, including mental health.

Earlier this year, the Australian Labor Party cut funding to mental health services, and in the May federal budget, the right-wing Albanese-led Labor government made significant cuts of $11 billion to the annual health budget. These actions have further exacerbated the already strained state of mental health support in the country. At the same time, the Labor government is implementing regressive “stage three tax cuts” that overwhelmingly favour Australia’s affluent minority, and is committing hundreds of billions of dollars for nuclear-powered submarines in preparation for an aggressive, US-led war against China.

China slowdown worsens

Nick Beams

The latest data from China show the slowdown in the world’s second largest economy, reflected in significant deflationary trends, is not abating. Moreover, it is in danger of missing the already low official target of 5.5 percent growth this year.

A worker assembles electronic devices at an Alco Electronics factory in Houjie Town, Dongguan City, in the Guangdong province of China. [AP Photo/Ng Han Guan]

According to official figures released on Monday, the economy grew by 6.3 percent in the second quarter compared to a year ago. However, that figure was below expectations and conceals, rather than reveals, the actual situation because a year ago Shanghai and other cities were in a COVID lockdown.

A more accurate assessment is provided by the quarterly data. These show that growth was only 0.8 percent in the second quarter compared to 3.2 percent in the first three months of the year.

The downward pressures go across the board: weakening spending after the initial boost following the lifting of anti-COVID measures; deflationary pressures throughout the economy; continuing problems in the housing and real estate markets; and falling export revenues.

Retail sales rose by only 3.1 percent in June compared to a year earlier, down from 12.7 percent increase for May.

Louis Kuijs, chief Asia Pacific economist with S&P Global Ratings told Bloomberg: “What we all expected was a consumption and service-led recovery. If that is sputtering, then there’s no engine left for the recovery.”

The extent of deflation was highlighted by a report in the Economist magazine. It noted that China’s “nominal” growth, that is growth before adjusting for inflation, was weaker than the inflation adjusted figure. Generally, it is the other way around.

“It suggests that the price of Chinese goods and services is falling. Indeed, it implies they fell by 1.4 percent in the year to the second quarter, which would be the sharpest drop since the global financial crisis.”

Consumer prices did not rise at all in the year to June and producer prices, those charged by factories, fell by 5.4 percent.

The Chinese economy is also being hit on the international front. The rise in interest rates by the major central banks is bringing a slowdown in demand for its exports. In June they fell by 12.4 percent in dollar terms, the largest year-on-year decline since the start of the pandemic.

The situation is not likely to improve as the global economy weakens with the International Monetary Fund forecasting world economic growth of only 2.8 percent this year, amid predictions that it could be even lower.

A comment by David Lubin, the head of emerging markets at the global financial firm, Citi, published in the Financial Times, detailed some significant trends in world trade.

He noted that, according to Citi data, the annual growth of import volumes turned negative last year and has continued negative so far this year and there were “few reasons to think things will improve.”

According to Lubin, global economic growth will come in at about 2.3 percent this year. Next year “will almost certainly be weaker than this, not least because big central banks are, in effect, aiming to induce slowdowns to regain control over inflation.”

This would create a more hostile environment for trade, he wrote, noting that “the last time the world saw two consecutive years of sub-2.5 percent growth was in the wake of the financial crisis.”

China is facing added pressure because of the trade and tech wars being waged against it by the US. Washington claims its bans on high-tech exports to China are only aimed at a narrow range of technologies that have military applications and are not directed at the broader economy. It says it wants to lessen tensions, but its actions speak louder than words.

In comments delivered during the Group of 20 finance ministers meeting in India earlier this week, US Treasury Secretary Janet Yellen said that her recent visit to Beijing had been aimed at putting the relationship with China on a “surer footing.”

But at a later press conference she ruled out removing or even relaxing the tariffs imposed on Chinese goods by the Trump administration.

“The tariffs were put in place because we had concern with unfair trade practices on China’s side and our concerns with those practices remain,” she said.

Faced with a worsening international environment, the Xi Jinping regime is seeking to lift domestic demand. However, the kind of stimulus measures it employed in the past, in response to the global finance crisis, are no longer available because of the growth of debt.

After it removed all measures against the spread of COVID, Beijing expected there would be an uplift in the economy. But after the economy grew faster than expected in the first three months of the year there was a sharp slowdown as retail sales, investment and property sales dropped.

According to a recent note by Citi analysts: “China is on the brink of a self-fulfilling ‘confidence trap’ as the initial reopening impulse starts to fade.”

The all-important property market is showing the same trend as the rest of the economy. Earlier this year it appeared to be recovering from the swathe of defaults by real estate companies and uncompleted housing projects as home buyers came back into the market.

The revival appears to be short-lived. The price of new homes fell in May. According to the China-focused consultancy firm Gavekal Dragonomics, property sales are now 70 percent of where they were in 2019 and housing starts have fallen to 40 percent of that level.

A survey conducted by the Japanese financial firm Nomura told the same story. It found that property transaction volume as measured by floor space fell by 19.2 percent year-on-year in June following a 3.5 percent decline in May.

Last November the government took measures to try to boost the property sector, which it continued earlier this month by easing rules for the extension of debts.

However, according to a report in the Financial Times, “its efforts have so far failed to revive market activity.”

Asia property analyst Andrew Lawrence, at the financial firm TS Lombard, told the FT: “What we’re seeing is a complete lack of trust emerging in the Chinese property sector.”

The report said so far government measures of support had only been directed to so-called “high quality” developers, leaving those that have defaulted and are caught up in restructuring operations to fend for themselves.

“The funding model for Chinese developers is broken,” Lawrence said, “and there isn’t anything to replace it. Ultimately they’re going to get to the point where they’ve got nothing to sell and they’ve got no revenue.”

In the face of the worsening economic situation, the official line is that China is not facing deflation. In a press conference held in the wake of data showing consumer prices were flat, the deputy governor of the People’s Bank of China Liu Guoqiang said China was not in deflation and “won’t show signs of deflation in the second half of this year.”

Amid the slowdown, one issue that will be causing concern in ruling circles is the increase in youth unemployment that is hitting highly educated graduates from universities and colleges who cannot obtain decent-paying jobs in their chosen field.

The jobless rate for those aged 16 to 24 in the urban areas hit a new record high of 21.3 percent in the June quarter. The official response is that they should “work hard” and take those jobs that are available. This response does not sit well with young graduates whose families have spent considerable amounts of money to secure their education and who have studied hard but who find there is nothing for them when they seek employment.