German military experts demand purchase of drones

Johannes Stern

According to a report in the Welt am Sonntag newspaper, German security officials and military experts are urging the rapid purchase of armed drones.
The defence policy spokesman for the Christian Democratic Union-Christian Social Union (CDU/CSU) fraction in parliament, Henning Otte, told the newspaper, “Last year, we initiated a debate about the necessity of combat-ready drones and clearly spoke out in favour of this capability.” He went on to say that it was now time “to take the next step and secure drones with this capacity for the German army.”
The defence spokesman for the CSU, Florian Hahn, expressed a similar view. He said that Defence Minister Ursula von der Leyen (CDU) had to “urgently take the decision this year.”
The drones were “a key question for our sovereignty in defence policy and a key capability for a modern, efficient army,” he continued. Other problems in defence policy, such as the supply of A400M transport aircraft, should not result in “a decision on the purchase of a drone being set aside,” Hahn added.
According to Die Welt, the Social Democrats (SPD) are also stepping up pressure on von der Leyen. “We expect the minister to make this decision quickly,” Rainer Arnold, the SPD’s defence spokesman, was cited by the paper as saying.
High-ranking military officials are supporting the calls from politicians. The chairman of the Bundeswehr (German army) association, Lieutenant Colonel Andre Wüstner, referring to current crises in Africa, Syria and Iraq, declared that future conflicts would be carried out by means of drones. The Defence Ministry had to finally begin purchasing and developing combat drones, he insisted.
The Air Force inspector, Lieutenant General Karl Müller, warned that if Germany did not develop its own drones, it would be internationally dependent.
According to Welt am Sonntag, the purchase of military drones is no longer a question of if, but when. A spokesman for the Defence Ministry said a policy was being worked on.
The newspaper claimed that €323 million in a secret part of the defence budget had been “allocated for the purchase of three combat-ready aircraft and two ground control stations.” The options being considered, according to Die Welt, are the Israeli model “Heron TP” and the US “Predator B.” In the medium term, the development of a European drone was the goal.
Germany’s move to acquire combat drones exposes the lies of the media and politicians that the German ruling class and its military have been forced to wage war in defence of human rights and democracy. Drones epitomize the US-led criminal wars of conquest around the world.
Washington has deployed drones mainly in Afghanistan, Pakistan, Somalia and Yemen. According to research by the London-based Bureau of Investigative Journalists, the US military and CIA have already claimed the lives of between 2,400 and 3,900 people in Pakistan alone through the use of drones. Victims of the targeted killings, which are personally approved by President Obama, are often women and children. Often they are guests at birthday parties or weddings targeted for drone attack.
The Bild newspaper recently revealed that Germany has been more broadly involved in such methods of warfare (which are illegal under international law) than had previously been reported. Extensive documents from the German army and foreign intelligence service (BND) confirm that Major General Markus Kneip, who commanded Germany’s ISAF troops in Afghanistan and today is head of the strategy and deployment department of the Defence Ministry, personally selected individual targets for the US targeted killing programme.
The purchase of drones would give the German military the ability to conduct its own targeted killings. Although the vast majority of Germans oppose this illegal practice, plans for the development of a military drone program have for some time been systematically developed behind the backs of the population.
Already in 2009, the CDU/Free Democratic Party (FDP) government stated in its coalition agreement that it was “essential” to carry out “the sustainable development and expansion of independent national capabilities—in particular, future aircraft systems.” In the summer of 2012, then-Defence Minister and current Interior Minister Thomas de Maizière described drones as “ethically neutral weapons.” Shortly afterwards, a strategy paper entitled “Air Power 2030” was published by the Air Force that called for the development of drone technology.
“The utilisation and further development of the capabilities of unmanned aerial vehicle systems is to be optimised in all areas of surveillance-directing-impact and support, and their scope of deployment expanded,” the paper stated. The Air Force intended, according to the report, “to invest in these programmes so important for the future because we are convinced that the German army can thereby be strengthened as a whole.” The Air Force would increase “the capacity to act and the efficiency of the entire German military system” so that it could contribute “flexibly and globally at any time to German army deployments.”
Since German President Joachim Gauck and other politicians announced Germany’s return to an aggressive great power foreign policy at the beginning of last year, a systematic campaign has been waged in the media in favour of the purchase of these instruments of murder. Particularly prominent in this campaign has been Humboldt University Professor Herfried Münckler.
In June, he told public broadcaster ARD’s “Mittagmagazin” (Mid-day Magazine): “The wars of the future will be a mixture of classical wars and more modern police interventions. Drones will play an increasing role in this policing role of the military.”
He went on to say that drones were “very well equipped for such police-style missions, certainly better than combat helicopters, bombers and possibly also light infantry.”
He continued: “I think one has to realise that the development of combat-readiness on many levels is coming. Geopolitical factors play a role in this, demographics, how many young men do you have, i.e., how many victims can be risked, technological developments, tactical innovations, strategic ideas.”
He added that “Post-heroic societies like ours, societies that are not held together by particular ideals of masculinity, by the ideas of honour and sacrifice” were dependent upon “using technological assistance as a crutch to secure the capacity to act on the military level.”
In a further interview with the provocative title “To Proscribe Drones Would Be Absurd,” Münckler said incompetence in security policy was being defended by invoking morality.
German history was also a problem, he noted. Due to "an intense feeling of guilt,” Germans were adverse to developing a “heightened responsibility” to “engage in those places where something like genocide is taking place,” he declared. He complained that "because Germany stood at the centre of two world wars,” ordinary Germans were inclined “to fold their hands and do nothing.”

Oil giants take hard line against US workers on strike

Jerry White

Nearly 4,000 workers are on strike at oil refineries in Kentucky, Texas, California and the state of Washington after negotiations between the United Steelworkers (USW) union and major oil corporations for a new three-year labor agreement broke down over the weekend.
On Sunday morning, union officials called a limited strike—involving nine out of the 65 oil refineries it organizes and only 3,800 out of the 30,000 workers covered by the national agreement. The action was called after Royal Dutch Shell, the lead bargainer for the oil companies, walked out of talks without giving the USW anything it could present as a concession to help overcome rank-and-file opposition to another sellout deal.
Despite the sharp slide in crude oil prices, the energy conglomerates, which also include ExxonMobil, BP, Chevron and Marathon, are taking in windfall profits and are paying their top executives multimillion-dollar bonuses. The value of the oil company shares have more than doubled since the last contract signed by the USW in 2012.
Like workers throughout the United States, oil workers are determined to regain lost pay after more than a decade of stagnant wages and rising health care and other living expenses. In addition, many oil workers are subjected to 12-hour shifts and are forced to work as many as 14 straight days, according to the USW, resulting in fatigue and the danger of fatal accidents.
The politically connected oil industry faces little, if any, oversight—whether Democrats or Republicans are in office—from federal and state regulators despite a raft of deadly explosions, chemical releases and other environmental disasters.
Two of the refineries selected for picketing were the locations of deadly disasters over the last decade. This includes the Marathon Galveston Bay Refinery in Texas City, Texas (formerly owned by BP), where 15 workers were killed and 170 injured in a March 23, 2005 hydrocarbon vapor cloud explosion. Investigations found BP responsible for unsafe conditions due to corporate cost cutting, a failure to invest in the plant infrastructure and a lack of oversight on safety and major accident prevention. BP sold the facility to Marathon for $2.5 billion as part of a divestment plan following the Deepwater Horizon disaster in 2010.
The other facility is the Tesoro Anacortes Refinery in the state of Washington where seven workers were killed in an explosion on April 2, 2010. State regulators cited the company for 39 “willful” and five “serious” violations of health and safety regulations. An investigation by the US Chemical Safety Board concluded that Tesoro had a “complacent” attitude towards flammable leaks and occasional fires; did not correct a history of recurring leaks and placed workers in dangerous conditions; and did not adequately maintain equipment before the lethal blast. It also found that the accident was rooted in “a deficient refinery safety culture, weak industry standards for safeguarding equipment, and a regulatory system that too often emphasizes activities rather than outcomes.”
Last August, the Obama administration’s Justice Department shut down its four-year investigation into violations of occupational safety and environmental laws, claiming that the evidence it found “does not reach the exacting bar for criminal prosecution.”
After appeals by Tesoro’s attorneys, a judge in the state of Washington threw out 27 of the 39 “willful” violations and reduced the company’s fine from $2.39 million to $685,000. Judge Mark Jaffe could knock that down even further in a ruling expected this year.
In comments to the local media web site, click2houston.com, Josey Wales, a supporter of the oil workers, replied to comments criticizing the strikers. “[This] is about what the company wants to take away. It’s about the safety in the plants. Maybe you have not been paying attention to the explosions, fires, environmental incidents and the exposure these guys are constantly facing... These corporations don’t care if you’re exposed to cancer-causing chemicals on a constant basis on your job. But do you care if your family is? Are you ignorant enough to believe these chemicals stop at the gate around these plants? That they don’t show up in your water your family is drinking?
“My dad and grandfather both worked in the plants. They worked shift work, nights, evenings, days. They worked holidays and weekends. By the time they were 60 years old they were worn out old men. They buried friends that burned to death in fires and explosions. They buried friends that died from cancer… These plants are making record profits and the CEOs are taking home 40 million-plus a year plus stock bonuses. If you think cheap oil is going to hurt them you are ignorant to how it works. Oil companies buy oil to refine and then sell the byproducts from it. It’s the drilling companies that are laying off. The oil companies are going to make a killing with cheap oil.”
The USW has made sure the strike has the least possible impact. The Tesoro refinery in Martinez, northeast of Oakland, for example, was already operating at half capacity because of scheduled maintenance. Although the USW represents workers at refineries that account for two-thirds of the nation’s refinery capacity, the strike only affects nine facilities, responsible for 10 percent of capacity. The remaining USW-represented refineries are continuing to operate under rolling, 24-hour contract extensions, according to the union, while operations at nearly 200 unionized oil terminals, pipelines and petrochemical plants continue. There has not been a national oil workers strike since 1980 when workers were out for three months.
The sabotage of the strike is not an accident. The USW executives are opposed to any serious fight against the oil giants. While posturing as defenders of safety and workers’ living standards, the USW has collaborated with the oil companies to slash jobs and labor costs in the name of improving “competitiveness” just as it has done in the steel industry.
In 2013, President Obama appointed USW President Leo Gerard to serve on the Advanced Manufacturing Partnership Steering Committee, charged with “enhancing the nation’s competitiveness.” In his latest statement on the union’s web site, Gerard praises Obama as a champion of the “middle class” and opponent of social inequality even though he has overseen the greatest transfer of wealth from the bottom up in history.
Obama has not only let corporate criminals—like Tesoro, BP, General Motors and JPMorgan Chase—get away scot-free, he has made the reduction of American workers into a cheap labor force the center of his manufacturing strategy. The president differs from the Republicans only in his greater willingness to use the services of Gerard & Co. to suppress working-class opposition to these corporate attacks.
Phony statements of international solidarity coming from Unite, the British union, which has a record of betraying workers, is no substitute for a real struggle to unite workers internationally against the global oil giants. If the livelihoods and very lives of workers are not to be subordinated to the anarchy of the capitalist market—and the booms and busts of speculative bubbles—then the oil industry must be nationalized, placed under the democratic control of the working class and run on the basis of human need, not profit.
The conduct of this struggle must be taken out of the hands of the USW. Rank-and-file committees, consisting of the most militant and class-conscious workers, must be set up to spread the strike and shut down the entire industry. At the same time, oil workers must reach out to the broadest sections of workers and youth to fight for the development of a powerful industrial and political movement of the working class against both big-business parties and the capitalist system they defend.

The US arming of Ukraine and the danger of World War III

Alex Lantier

The World Socialist Web Site unequivocally condemns plans being worked out by the Obama administration to arm the right-wing regime in Ukraine with billions of dollars in advanced weaponry. These moves threaten to spark a direct conflict between the US and Russia, two nuclear-armed powers, and ignite a Third World War.
Discussions over arming the Western-backed government in Kiev come amidst setbacks to the offensive against eastern Ukraine launched by Ukrainian President Petro Poroshenko last month. According to Monday’s New York Times, “after a series of striking reversals that Ukraine’s forces have suffered in recent weeks, the Obama administration is taking a fresh look at the question of military aid.”
Washington has already sent military trainers to Ukraine and pledged $350 million in “nonlethal” military aid to Kiev. Now, the Times writes, top Obama administration officials are increasingly unified around “an independent report…by eight former senior American officials, who urge the United States to send $3 billion in defense arms and equipment to Ukraine.” These funds would provide the Kiev regime with “anti-armor missiles, reconnaissance drones, armored Humvees, and radars that can determine the location of enemy rocket and artillery fire.”
This reckless escalation is being plotted by a criminal cabal of government officials, military and intelligence operatives and their associated think tanks, including the Brookings Institution. It is dictated by the interests of a corporate and financial oligarchy that, in its pursuit of global hegemony, threatens the very future of human civilization.
The implications of the plans being put in place have been concealed from the people of the United States and the world. One of the few sober appraisals came from Germany’s Sueddeutsche Zeitung, which warned in an article published Monday: “US arms supplies to Ukraine would be—and that can be taken almost literally—a declaration of war against Moscow.”
The newspaper cited a Russian military expert, Yevgeny Buchinsky, who warned that in response to an offensive against the Donbass by Kiev, “Russia will have to intervene and then, bluntly speaking, to take Kiev. Then NATO would be in a difficult situation. Then you would have to start World War III, which no one wants.”
These statements follow warnings from Mikhail Gorbachev, the last president of the Soviet Union, who said recently that a European war over Ukraine would “inevitably lead to a nuclear war.”
As always, the war plans of the US and its imperialist allies are couched in the language of defense—in this case, of “resisting Russian aggression.” In fact, the escalating conflict over Ukraine is the product of a campaign by the US, Germany and the European Union to seize Kiev and turn Ukraine into a military outpost of the NATO alliance, pointed at the heart of European Russia.
A year ago this month, a putsch led by the fascistic Right Sector militia and backed by Washington and Berlin ousted pro-Russian Ukrainian President Viktor Yanukovych. He was replaced by an unstable, unpopular coalition of right-wing parties that made no secret of their violent hostility to Russia.
The actions of the new government, including the mass killing of pro-Russian protesters, as in the May 2014 Odessa massacre, provoked armed resistance in areas of eastern Ukraine with large ethnic Russian populations. The regime responded with bloody offensives by fascist militias against cities such as Donetsk, Luhansk, Mariupol and Slavyansk. Thousands died last year in attacks carried out in coordination with the CIA, whose director John Brennan visited Ukraine undercover.
Lacking any social base outside of a narrow layer of oligarchs and fascist thugs, the Kiev regime has failed to defeat the eastern Ukraine separatists, whom Moscow has armed and supported. Washington is responding by preparing an even greater bloodbath against the population of eastern Ukraine, directly posing the risk of full-scale war with Russia.
The international working class faces the disastrous geostrategic consequences of the Stalinist bureaucracy’s dissolution of the USSR in 1991 and restoration of capitalism. This final betrayal by the Stalinists has enabled US imperialism to manipulate and inflame ethnic tensions within the former USSR.
The ultimate aim of the US and its allies is to reduce Russia to an impoverished and semi-colonial status. Such a strategy, historically associated with Carter administration National Security Advisor Zbigniew Brzezinski, is again being openly promoted.
In a speech last year at the Wilson Center, Brzezinski called on Washington to provide Kiev with “weapons designed particularly to permit the Ukrainians to engage in effective urban warfare of resistance.” In line with the policies now recommended in the report by the Brookings Institution and other think tanks calling for US arms to the Kiev regime, Brzezinski called for providing “anti-tank weapons…weapons capable for use in urban short-range fighting.”
While the strategy outlined by Brzezinski is politically criminal—trapping Russia in an ethnic urban war in Ukraine that would threaten the deaths of millions, if not billions of people—it is fully aligned with the policies he has promoted against Russia for decades.
Following the dissolution of the Soviet Union, Washington pursued this strategy by organizing “color revolutions” to install pro-US and anti-Russian regimes in ex-Soviet republics, including Georgia, Ukraine and Belarus.
A decade later, amid a far deeper economic and geostrategic crisis of global capitalism, Washington is proceeding even more ruthlessly. The crisis in Ukraine has been utilized to massively expand US and NATO forces throughout Eastern Europe, combined with new threats and ultimatums.
The only alternative to disaster is the mobilization of the international working class in struggle against imperialism, on a socialist platform. The reactionary Russian nationalism of the Putin regime, the representative of the capitalist oligarchy that emerged from the dissolution of the USSR, is bankrupt. Incapable of making any appeal to opposition to war in the international working class, the Putin government inflames ethnic tensions within the former USSR. To the extent that it seeks to counter the aggression of NATO on the basis of Russian nationalism, it only paves the way for nuclear war.
Last July, the WSWS wrote of the intensifying aggression against Russia: “Whatever the short-term outcome, the long-term implication of the agenda being pursued by the United States and the European imperialist powers leads inexorably in the direction of war with cataclysmic consequences. The greatest danger facing the working class is that decisions are being taken behind the scenes, with masses of people largely unaware of the risks facing the world’s population...
“Anyone who believes that a nuclear war is impossible because modern governments, unlike those that were in power in 1914, would not risk catastrophe, is deluding himself. If anything, the regimes that exist today are even more reckless. Beset by mounting economic and social problems for which they have no progressive solution, they are ever more inclined to see war as a risk worth taking.”
This warning is being confirmed as imperialism drives the world toward a nuclear conflagration. The building of the International Committee of the Fourth International as the leadership of a mass global antiwar, anti-imperialist and anti-capitalist movement of the working class is a matter of the greatest urgency.

Obama’s “pro-middle class” budget: Cut corporate taxes, raise military spending, slash Medicare

Andre Damon

On Monday, President Barack Obama presented his budget proposal for fiscal 2016, described by the New York Times as an “unfettered case for spreading the wealth.”
In reality, the budget proposal, cynically packaged and promoted as a populist boon to the middle class at the expense of the rich, is dominated by corporate tax cuts, expanded military spending, and cuts to Medicare.
These are accompanied by a grab bag of social and infrastructure spending proposals, trivial in and of themselves, which are proposed solely to make the budget appear to favor the “middle class.” As Obama and the Democrats know perfectly well, the supposedly “progressive” elements of his budget will be rejected by the Republican Congress, while the pro-corporate and militarist meat of the proposal will be enacted.
The real character of Obama’s budget was signaled by the location he chose to unveil it. The president gave the press conference announcing the budget at the Department of Homeland Security in Washington, where he emphasized that he would significantly expand spending on the military and domestic security.
Obama declared, “We need to fund the department [of Homeland Security], pure and simple. We’ve got to put politics aside, pass a budget that funds our national security priorities at home and abroad.” The budget, he added, “gives us the resources to confront global challenges, from ISIL to Russian aggression.”
This was a reference to his proposal to lift caps on military, intelligence and domestic security spending imposed as part of across-the-board cuts mandated by the so-called “sequester” law that came into effect in early 2013.
Obama’s budget proposal would increase Pentagon spending by seven percent, adding an additional $38 billion to bring the total defense budget to $534 billion. Obama is separately proposing $51 billion in additional funding for the wars in Iraq and Syria, including money to back the so-called “moderate” opposition in Syria, as well for as the ongoing US troop presence in Afghanistan.
The budget calls for the corporate tax rate to be cut to 25 percent for manufacturers and 28 percent for other corporations, down from the current rate of 35 percent.
The proposal would also allow US corporations to repatriate past profits generated overseas at a tax rate of only 14 percent. Foreign profits would be taxed at 19 percent in the future. Currently, US corporations pay a rate of 35 percent on foreign profits, which many corporations avoid by keeping their foreign earnings abroad.
These tax cuts are accompanied by $400 billion in cuts to Medicare, Medicaid and the Department of Health and Human Services. The budget proposes to raise $66 billion over ten years by charging higher Medicare premiums to upper-income patients, a move that would undermine Medicare’s status as a universal entitlement and open the door to means testing and the transformation of the government health insurance program for seniors into a poverty program.
The plan would cut another “$116 billion in Medicare payments to drug companies for medicines prescribed for low-income patients,” according to the New York Times. It would also slash $100 billion for the treatment of Medicare patients following their discharge from the hospital, affecting primarily the elderly.
The increases in military and security spending, corporate tax reductions and entitlement cuts, which form the core of the budget proposal, are coupled with a series of social spending increases and tax hikes on the wealthy which are certain to be stripped away by the Republican-controlled Congress.
The proposed tax increases include a 0.07 percent fee on some 100 large financial corporations and an increase in the capital gains tax from 24.2 percent to 28 percent for couples making more than $500,000 per year.
These would ostensibly be used to finance a plan to pay tuition—but not increase per-pupil funding—at community colleges, which would cost $60 billion, as well as an $80 billion proposal for increasing child care tax credits. The budget also proposes $478 billion in infrastructure spending over six years. These projects would be contracted out to private for-profit companies and would not take the form of government-run public works programs.
In announcing his budget, Obama claimed that his proposal would undo the effects of the sequester budget cuts. Since their implementation, Obama and Congress have taken measures to shift the burden of the cuts to social programs and away from the military.
Obama made clear that he would not allow sequester cuts to defense spending, declaring that “if Congress does nothing to stop sequestration, there could be serious consequences for our national security, at a time when our military is stretched on a whole range of issues.” He added, “I’m not going to accept a budget that locks in sequestration going forward.”
The token social spending measures in the budget are aimed at perpetuating the fraud that the Democrats are the party of the “middle class”—as opposed to the pro-business Republicans—in preparation for the 2016 presidential election.
Despite the constant talk in the media about “partisan gridlock,” the two parties represent different factions of the same ruling oligarchy and pursue a common agenda of austerity, militarism and the build-up of the repressive powers of the state.

Egyptian court confirms mass death sentence against 183 political prisoners

Thomas Gaist

An Egyptian court confirmed death sentences against 183 supporters of the Muslim Brotherhood (MB) Monday, marking the culmination of yet another historic mass show trial by the US-backed military regime.
Those convicted, 34 of whom were not even present for the trial, were charged for the killing of 11 police agents in Kardasa, Giza in August 2013, during mass protests over the massacre of demonstrators in Cairo’s Rabaa Square by state security forces.
The defendants were initially sentenced to death in December by Egyptian judge Mohammed Nagi Shehata, whose ruling was subsequently approved by Egypt’s top Islamic legal official, the Grand Mufti, before being reaffirmed by the court.
The verdict represents the latest stage in the bloody and protracted crackdown against the population implemented by the military since the July 2013 coup.
Whether or not any of the defendants in the latest case were actually involved in the alleged incident, the real crime of those sentenced to death was their opposition to the military dictatorship. Monday’s finalization of the sentences, which bring the total number of political prisoners awaiting execution to some 1,400, is intended to serve as a warning that any expression of dissent will be met with maximum brutality.
The trials have once again underscored the criminal and authoritarian character of the military regime, now led by General Abdel Fattah al-Sisi, who seized power in a coup backed by the US amidst an upsurge of mass opposition to the previous MB government. The military has proceeded to brutally suppress all opposition, including working-class strikes and protests against the dictatorship.
The trials themselves have been condemned internationally as a mockery of due process. Egyptian judges have been “convicting defendants en masse without regard for fair trial standards,” said Sarah Leah Whitson of Human Rights Watch.
The latest trial “flouts international law,” Amnesty International’s director for the Middle East said in a statement calling the verdict “outrageous.” Many of those convicted did not have lawyers.
“Issuing mass death sentences whenever the case involves the killing of police officers now appears to be near-routine policy, regardless of facts and with no attempt to establish individual responsibility,” an Amnesty representative wrote.
Although the defendants in this case are alleged to be associated with a bourgeois opposition party, the MB, the trials are intended as an unambiguous threat to the Egyptian working class, whose strikes were the principal factor in the fall of the dictatorship of Hosni Mubarak in February 2011.
The actions of the Egyptian regime have the full backing of Washington. Even as the government has organized mass show trials on a scale not seen in recent history, the Obama administration has insured that more than $1 billion in annual US aid has continued to flow into the hands of the military apparatus.
Just one day after an Egyptian court handed down death sentences against hundreds of alleged members and supporters of the MB in April, US Secretary of State John Kerry oversaw a red carpet reception for Egypt’s Foreign Minister. Kerry praised the Egyptian government as an “important strategic partner,” commending the military government for its “positive steps,” and stressing the “common interests” shared by the US and the Egyptian government.
The al-Sisi dictatorship has carried out a policy supported by the American ruling class and its allies, both within Egypt and internationally.
Egypt has become a choice investment opportunity for international finance capital. Total Egyptian share values have doubled since the July 2013 coup, even as the regime has killed at least 3,000, including at least 1,000 MB members, imposed sweeping bans against any public demonstrations and arrested tens of thousands, sending many of them to secret prisons and torture centers. Egyptian financial markets yielded a return to investors of more than 30 percent in 2014 alone.
Al-Sisi himself has received invitations from Europe’s most powerful governments. French President François Hollande publicly embraced the military leader during a recent visit to Paris, and al-Sisi has returned these affections by placing an official call to the French politician to convey “sincere condolences” on behalf of Egypt after the Charlie Hebdo shootings.
Al-Sisi has cemented these ties through enthusiastic support for every new war and military intervention launched by the US and European governments in the Middle East and North Africa. On Monday, a Fox News opinion piece hailed al-Sisi as “Egypt’s Muslim Churchill,” lavishing praise on the military despot for his promotion of the fraudulent US “war against Islamic extremism.”
The mass executions of the al-Sisi regime mark the return of all the brutal methods of the old Mubarak dictatorship. Two hundred more Egyptians now face death, even while Mubarak has been cleared of all criminal charges, including those related to the hundreds of innocents executed during his decades of dictatorial rule and hundreds more killed and thousands wounded by his security forces during the January 2011 uprising.
MB leader Mohamed Mursi faces trial on espionage charges beginning on February 15, according to reports Monday.

Indonesian authorities prepare for more executions

John Roberts

Indonesian President Joko Widodo’s government is preparing for another round of executions, involving 11 prisoners, following the death by firing squad of six drug offenders on January 18.
In a CNN interview on January 27, Widodo dismissed clemency appeals by lawyers or foreign governments. “No compromise, no compromise,” he said. “They can ask for amnesty to the president but I tell you there will be no amnesty for drug dealers.” He specifically ruled out clemency for two young Australian men, Myuran Sukumaran and Andrew Chan.
The next day, Attorney-General H.M. Prasetyo told members of the Indonesian parliament that his office was deciding on the timing and site for the executions. The isolated Nusakambangan Island, off central Java, he said, was an “ideal place,” for security reasons. Five of the six prisoners executed on January 18 were killed on the island by a police Mobile Brigade firing squad.
Lawyers for Sukumaran and Chan said they would apply for a second judicial review in Indonesia’s Supreme Court, based on a Constitutional Court ruling that recommended this for prisoners who have spent more than 10 years on death row. But Attorney-General Prasetyo said a meeting between his department, the Supreme Court and the Constitutional Court, had agreed the pair was not eligible for a second review.
Prasetyo said the government had made no decree to enact the Constitutional Court’s ruling. “We made the decision together, that before the government issues a governmental decree on it, then [a] judicial review can only be done once,” he said. His statement underscores the government’s determination to proceed with the executions.
Events are moving quickly in the state-organised killing process. The Indonesian media reported that Sukumaran and Chan would be put to death in the next round. Widodo rejected Chan’s clemency appeal on January 22, clearing the way for the two to be executed together.
Yesterday the Jakarta Post published the names of all 11 condemned to die. They include four Indonesians and foreign nationals from the Philippines, France, Ghana, Spain and Brazil. Apart from two Indonesians convicted of multiple murders, they have been convicted of relatively minor drug offences that occurred between 1999 and 2005.
These developments have caused deep public concern in Australia. Last night, artists, musicians and hundreds of people gathered in Sydney’s Martin Place for a vigil appealing for clemency. Sukumaran’s grandmother Edith Visvanathan made an emotional plea: “I come to ask pardon from the president, the president and the people of Indonesia, to forgive my grandson and give him a second chance.”
The impetus for the accelerated application of Indonesia’s death penalty laws is coming from Widodo himself, however. Three people were executed during the five years before Widodo’s installation as president last October. Now 17 have been put to death, or scheduled to be killed, within the space of two weeks. Eleven offences, ranging from murder to subversion and corruption, are punishable by execution under Indonesian law.
Widodo’s motives are entirely political. Under conditions of a deepening global economic crisis, falling oil prices and growing demands for austerity cuts and a radical pro-market restructuring of the Indonesian economy, Widodo is attempting to shore up his relations with the military-police security apparatus and right-wing Islamist groups.
During the 1965 CIA-backed military coup that overthrew the Sukarno government, the Indonesian security forces combined with right-wing Islamist groups to murder at least half a million Communist Party of Indonesia members, workers and peasants and install General Suharto’s military dictatorship, which lasted more than 30 years. These military and Islamist forces still retain a dominant position in the Indonesian state.
The Islamist organisations blame Western influence for producing an estimated five million drug addicts in Indonesia and demand a savage response from the state. The real source of the problem, however, is the mass poverty and despair produced by the enrichment of Indonesia’s ruling oligarchy at the expense of hundreds of millions of workers and peasants. Over half Indonesia’s 250 million people live on or below the miserably low United Nations poverty line of $US2 per day.
The fate of the two condemned Australians points to the close economic relationship and strategic partnership between Canberra and Jakarta, which also underpinned the sordid manner in which Australian police authorities set up both men in 2005 for arrest, and therefore execution.
On January 23, Australian Prime Minister Tony Abbott publicly called on Indonesian authorities to grant clemency for Sukumaran and Chan. He declared that both had reformed and helped rehabilitate other prisoners incarcerated in Denpasar’s Kerobokan prison on the island of Bali. No specific details have been provided about Abbott’s contacts with Indonesian officials, but the Indonesian foreign ministry made it clear that Canberra’s appeals have been presented in such a way as to not endanger the bilateral relationship.
The Australian government has not denounced the reactionary death penalty or criticised Widodo’s use of it, nor threatened diplomatic or economic sanctions if the executions go ahead. Labor Party opposition leader Bill Shorten has defended the Abbott government, declaring on January 23 that it was doing “everything it can” to prevent the execution of the two Australians.
Successive Liberal-National and Labor governments in Australia have worked assiduously since the 1965 coup to cultivate and maintain the closest relations with the Indonesian ruling elite. Former Labor Prime Minister Paul Keating hailed the bloody coup as the “most important contribution to stability” in South East Asia.
Canberra’s token appeals are entirely hypocritical. In 2005 the Australian Federal Police (AFP) supplied the Indonesian police with detailed information about a group of Australians—the “Bali Nine,” which included Sukumaran and Chan—who planned to import heroin into Australia from Bali. The AFP provided photographs, passport numbers and details of their movements and planned smuggling methods. The AFP knew that, as a result, the nine were likely to face death sentences.
Lee Rush, the father of one of the Bali Nine, contacted the AFP and was led to believe that the police would stop his son Scott before the group left Australia. The police reneged on this undertaking and allowed the Indonesian operation to proceed.
This AFP decision was vehemently defended by both Prime Minister John Howard and opposition leader Kim Beazley. It served two purposes. First and foremost, it sought to help rebuild the Australian political and security establishment’s connections with the Indonesian security forces, following strained relations between the two countries over East Timor in 1999–2000. Second, it side-stepped the abolition of the death penalty in Australia, where legislation also restricts the extradition of people to face possible execution overseas.
When Labor’s Beazley was asked in 2005 if the AFP had done the “right thing” in the Bali Nine case, he declared: “Australians do need to understand this—it is utterly critical for this nation that there is intimate collaboration between the AFP and the police forces of this region.”

Sydney siege inquest: An exercise in damage control

 Peter Symonds

The coronial inquiry into the December 15–16 cafe siege in Sydney began yesterday, but only for a short opening session. The carefully-managed hearing made clear that the overriding aim of the proceedings is to attempt to counter widespread public suspicion about what happened, while protecting the state and federal governments, police and intelligence agencies that were responsible for the tragic outcome.
Over the past six weeks, no official statement has been released concerning even the most elementary facts about the 17-hour siege that ended with the deaths of the hostage-taker Man Haron Monis and two hostages—barrister Katrina Dawson and Lindt cafe manager Tori Johnson. In a highly unusual step, State Coroner Michael Barnes instructed counsel assisting the coroner, Jeremy Gormly, to “answer speculation” and release some details of the events.
After outlining what he claimed would be a full investigation of the events, Gormly provided a highly-selective account of what took place on December 15–16 that pre-empted many of the issues that the inquiry is to examine. No evidence was provided to support his “release of facts,” nor was there any opportunity for it to be challenged. While Gormly declared that what he presented was only his “current interpretation,” nevertheless his comments will stand as the only official statement until the inquest resumes, which could well be months away.
Gormly’s “release of facts” dealt solely with two discrete episodes—the start of the siege after Monis entered the cafe in central Sydney at 8.33 a.m. on December 15 and its tragic conclusion when police stormed the premises in the early hours of December 16. While providing some details, the account was chiefly significant for what it excluded.
Gormly shed no light on Monis’s extensive contact with police and intelligence agencies prior to the siege, whether he was being monitored, or if he had been identified on any of the many cameras that monitor Martin Place where the cafe is located. Monis had previously protested outside the Martin Place studios of Channel Seven, which beefed up its security in response.
The 50-year-old Monis was an erratic and unstable individual—an Iranian refugee and self-proclaimed Shiite cleric who faced charges over allegations of sexual assault and assisting the murder of his ex-wife. Gormly said the coronial inquiry will seek a psychiatric assessment of Monis, as well as delve into other aspects of his life.
According to Gormly’s account, Monis was in the cafe for at least half an hour before telling the manager to lock the doors. He pulled out a sawn-off shotgun, ordered staff and customers against a wall and told them to display a flag with Arabic script, which was not that of the Islamic State of Iraq and Syria (ISIS). At 9.44 a.m., he instructed Tori Johnson to ring the emergency 000 number and tell the operator that he and others had been taken hostage in the Lindt cafe, radio-controlled bombs had been placed in three city locations and that Australia was under attack by ISIS. The claims about the bombs were false, as were those about ISIS .
Within minutes, police and the paramilitary Tactical Response Unit were on the scene. Gormly made no mention of the fact that high-level decisions were taken to elevate the situation into a major national crisis. Around 10 a.m., Prime Minister Tony Abbott and the cabinet national security committee met and in league with the state government in New South Wales, set in motion a massive police operation that sealed off much of central Sydney.
The 000 call, which had not previously been reported to the public, lasted 12 minutes, yet no further details were released yesterday. Did Monis identify himself? Did he issue any demands? As it turned out later, after the siege was over, Monis issued very limited demands—an ISIS flag, an acknowledgement that the siege was an ISIS attack and a phone call with Abbott. Yet these demands were deliberately ignored.
Gormly’s account appears to be scripted to justify the transformation of what was a serious, but relatively straightforward police matter into a “terrorist” crisis—all in a very short time-frame. Yet as Gormly acknowledged, “it seems he [Monis] had not established any contact with Islamic State”—a fact that would have been known to Australian intelligence agencies.
The Abbott government, supported by the Labor opposition and a compliant media, seized on cafe standoff to create an atmosphere of uncertainty and fear that fed into its “war on terror” agenda of supporting the US-led war in the Middle East and ramming through a battery of draconian anti-terror laws.
Gormly’s description of the end of the siege around 2 a.m. on December 16 was likewise carefully tailored. He provided graphic details of Monis’s execution-style killing of Tori Johnson, which was widely circulated in today’s establishment media. However, what prompted the shooting was the increasingly desperate situation inside the cafe that had been created by the refusal of state and federal governments to negotiate on any of Monis’s demands.
The authorities insisted that the media suppress all news about Monis and his demands, no doubt concerned that public pressure for negotiations could mount. Inside the cafe, the hostages were frantically trying to get the message out, with one appealing to “send the fricking Islamic flag.” Gormly revealed that he would have to sift through over three hundred 000 calls, as well as many emails, Facebook pages and other social media. Just before Johnson’s murder, a third batch of hostages made a desperate escape by breaking down a door.
The decision not to negotiate with Monis and to block all media coverage of his demands is likely to remain shrouded in secrecy. Gormly indicated that there would be an examination of the police management of the siege, but foreshadowed that “we will have to bear in mind that public exposure of details of plans of that type can themselves involve security issues. That evidence may require special treatment.” The role of political actors such as Abbott will remain well outside the bounds of the inquiry.
The police storming of the cafe resulted in the deaths of Monis and Katrina Dawson, as well as the injury of three other hostages and a member of the police paramilitary assault team. Monis died in a hail of bullets, including two to the head. Dawson was hit by six police bullets or fragments of bullets, one of which severed a major blood vessel. All the other injuries were caused by police bullets.
Once they get underway, the coronial inquiry’s proceedings are likely to reveal more details of the events surrounding the Sydney siege. However, one can predict in advance that the inquest will avoid any examination of the manner in which the Abbott government and the establishment as a whole exploited the siege for reactionary political purposes and the impact of their decisions on its outcome.

Peruvian government repeals law targeting young workers

Armando Cruz

Almost two weeks after thousands of young workers and students marched to protest Peru’s new “Youth Labor Law,” President Ollanta Humala summoned an extraordinary session of the country’s Congress in order to debate the viability of the legislation.
The law was repealed in a landslide vote January 26—in time to preempt another demonstration called for Thursday—with many of the original congressmen who voted for it changing their positions, obviously because of the unexpected mass opposition.
Passed into law late last year, the legislation was cynically promoted as a means to encourage the hiring of young workers by small enterprises, through the slashing of benefits to reduce labor costs for the employer. In reality, it was part of a series of economic packages passed last year to make the working class pay for the deceleration of the Peruvian economy.
A recent investigation by the Peruvian daily La República shed some light on the intervention of the employers’ associations in the drafting of the bill. In October 2014, the Exporters Association (Asociación de Exportadores, ADEX) presented a presentation to the government Labor Commission entitled: “The Reforms that Peru Needs.”
“In the presentation,” the report states, “ADEX proposes the reform of the general labor regime (...) reducing vacations, gratuities, compensations and the facilitation of firings.”
The successive marches against the bill were met with a rising crescendo of state violence, along with a campaign of intimidation by the government and alleged infiltration by agents provocateurs. Minister of the Interior Daniel Urresti proposed asking for IDs for anyone participating in one of the early marches.
Weeks later, some 20 activists received a “preventive complaint” by an attorney warning them beforehand against engaging in the promotion of the protests. And during the preparations for the fourth march, gun-toting policemen detained young activists from the district of San Juan de Lurigancho for handing out leaflets promoting the march.
The marches have been organized and led by radical youth collectives with no significant association to established “left” parties. There has also been a qualitative increase in the self-organization of young activists who, through the use of social media, divided the city into 12 “zones” in order to organize the protest’s agenda and route. The “zones” have also become forums for discussion and activism in the district neighborhoods, without the active initiative of either the unions or the pseudo-left. This practice has also spread outside the capital.
Sensing the ruling elite’s concern that this movement could not be contained, the unions and pseudo-left parties decided to lead the last march on January 15. However, the young demonstrators accused the General Confederation of Unions of Peru (Confederación General de Trabajadores del Peru, CGTP) of betraying the main goal of the march: to demonstrate pacifically in front of the Congress.
“The CGTP agreed to ensure the defense of 10,000 workers as they led the protest along Abancay Avenue (which leads to Congress),” wrote activist César Cornejo. But at the moment of reaching the avenue, he charged, “the few unions then wrapped their flags and left. A small police provocation was staged by the CTP and Renovar (the union and collective of the right-wing APRA party, respectively) and the repression was unleashed on students who were occupying most of the street.”
The protesters were dispersed through downtown Lima, pursued by policemen firing tear gas and beating young workers who fought back.
“We couldn’t go to Congress because the unions who were supposed to ensure our safety abandoned us,” stated Cornejo.
With polls showing nearly 70 percent of the population rejecting the youth labor bill, media spokesmen from the Peruvian right called for the law’s repeal. They fear that the unexpected youth radicalization may jeopardize the prospects for the election of a right-wing, pro-business candidate in next year’s presidential elections. Expected to run are APRA’s Alan Garcia, the fujimorista Keiko Fujimori and the multi-millionaire American-Peruvian banker Pedro Pablo Kuczynski. All these big-business-supported politicians have feigned, in varying degrees, opposition to the law.
The repealing of the law is a defeat for Humala, who already suffered from an approval rating of just 25 percent. Not only did seven of his Gana Peru party’s congressmen fail to obey the party line, voting to repeal the legislation, the resignation of one congressman from its ranks has left Gana Peru with just 34 of the 130 seats in Congress, one less than the right-wing fujimorista opposition party, Fuerza Popular.
As his government enters its last year in power, the Peruvian bourgeois media is speculating over whether the population’s loss of confidence in Humala—elected in a distorted expression of popular rejection of the “neoliberal” policies of his predecessors—will evolve into a further radicalization of the working class and youth, or whether popular discontent can be channeled behind a pro-business candidate, as they clearly hope.

Court sentences two Chileans, indicts US in the 1973 murder of Charles Horman

Bill Auken

More than four decades after two young US citizens were brutally tortured and murdered, along with thousands of Chilean workers, students and political activists, a court in Chile has sentenced two former military intelligence officers in connection with the crime, while directly indicting the US government for setting it into motion.
Pedro Espinoza, a retired Chilean army brigadier general, was sentenced to seven years in prison in connection with the executions of Charles Horman, 31, and Frank Teruggi, 24, in the days following the September 11, 1973 US-backed military coup that overthrew the government of Socialist Party President Salvador Allende. Rafael Gonzalez, a Chilean air force intelligence operative, was sentenced to two years of police supervision for being an accomplice in the killing of Horman.
The Horman case was made famous by the book The Execution of Charles Horman: An American Sacrifice, written in 1978 by Thomas Hauser in cooperation with Horman’s widow, Joyce, and father, Ed Horman. The book was subsequently the basis of the award-winning 1982 movie Missing, directed by Costa-Gavras.
Espinoza was the second-in-command of DINA, the Chilean secret police, and was named as the “material author” of the crime. He was already imprisoned for numerous other political murders, including that of the exiled former Socialist Party foreign minister of Chile, Orlando Letelier, who was killed in a terrorist car bombing in Washington, DC in 1976. He has also been condemned to life in prison by a court in Paris for the killing of four French citizens.
Gonzalez played an intimate role in the case, apparently spying on Horman and Teruggi—who were both politically sympathetic to the Allende government and collaborated in editing a left-wing weekly news digest known as “FIN”—and then interrogating Horman after soldiers abducted him from his home in Santiago on September 17, 1973.
Horman was executed the next day after suffering brutal torture. Frank Teruggi was arrested on September 20 and taken to the Santiago National Stadium, which was turned into a giant concentration camp through which some 40,000 perceived enemies of the military junta were to pass. Like many of them, Teruggi was tortured and killed within a day of being taken there.
Defecting the year after the coup and seeking asylum in the Italian embassy, Gonzalez recounted that he was present when the decision was made at the Chilean Ministry of Defense to execute Horman. Also present, he said, was General Augusto Lutz, director of the Military Intelligence Service (SIM), a Chilean colonel and an unidentified US official, believed to be with the CIA.
Before his defection, Gonzalez was assigned by the Chilean junta to serve as the liaison with US officials over the Horman case. When the regime decided to exchange Horman’s body for US military aid to the Chilean armed services, it was Gonzalez who knew where to find it.
The Chilean court’s 276-page ruling, which the New York Times reported was issued on January 9 but only made public on Wednesday, makes it clear that the US government was fully complicit in the 1973 executions of the two Americans.
The murders of both Horman and Teruggi, the ruling states, were the outcome of a “secret investigation” into their political activities carried out by the United States Military Group in Santiago, commanded by Navy Capt. Ray E. Davis. The intelligence gathered by the US military was passed along to its Chilean counterparts in what was effectively a warrant for their deaths.
Davis actually was indicted by a Chilean court in 2011, and his extradition sought from the US. Only later was it learned that he had been checked into a nursing home in Chile, where he died in 2013.
Chilean Judge Jorge Zepeda issued a ruling last year in which he found that “The military intelligence services of the United States had a fundamental role in the creation of the murders of the two American citizens in 1973, providing Chilean military officers with the information that led to their deaths.” The judge found that the executions were part of “a secret United States information-gathering operation carried out by the US Milgroup in Chile on the political activities of American citizens in the United States and Chile.”
For over two decades successive US government denied any participation in or even knowledge of what happened to Horman and Teruggi. Then, in 1999, a 1976 secret State Department memo was declassified. It declared that the Horman case “remains bothersome,” noting growing “intimations” of “negligence on our part, or worse, complicity in Horman’s death.” The memo noted that, while its focus was on Horman, “the same applies to the case of Frank Teruggi.”
While insisting that the State Department’s duty was “categorically to refute such innuendos in defense of US officials,” it added that given what information was at hand, it was not in a position to do so.
It continued that based on this information, the department was “persuaded” that “The GOC [Government of Chile] sought Horman and felt threatened enough to order his immediate execution.” It added that the Chilean regime “might have believed that this American could be killed without negative fallout from the USG [US Government].”
The memo acknowledged that there existed “some circumstantial evidence to suggest US intelligence may have played an unfortunate part in Horman’s death.” And finally, it cited Rafael Gonzalez, the recently sentenced ex-Chilean air force intelligence agent who handled the State Department’s inquiries at the time, as stating that, “Horman was considered as knowing too much.”
What Horman apparently knew too much about was the direct US role in orchestrating the Chilean military coup. At the start of the coup, he had been in the Chilean resort town of Viña del Mar, near the Pacific port city of Valparaiso, which served at the time as the base of operations both for Chile’s military in launching the coup, and US warships and military and intelligence personnel sent to help organize it. Horman spoke with US operatives who happily took credit for the coup, and he took notes documenting these discussions.
Also present in Viña del Mar was Captain Davis, the head of the US Milgroup, who ended up driving Horman and a companion back to Santiago at the height of the military siege, when a curfew was in effect and roads were blocked by military checkpoints. Horman’s widow recounted that he was conscious of the US officer’s interrogating him during the drive and, before it was over, “began to fear Captain Davis.”
The Horman family, represented by the Center for Constitutional Rights, brought a lawsuit against former national security adviser and Secretary of State Henry Kissinger and other US officials for the wrongful death of Charles Horman. Kissinger, who played the leading role in preparing the coup, addressed a message to Chilean dictator Gen. Augusto Pinochet at the height of the bloodbath in which Horman and Teruggi were killed, praising him for his “great service to the West.” The suit was ultimately dismissed because of the US government’s withholding of secret documents and witnesses.
In response to the latest sentencing of the two Chileans for their role in the killings in 1973, Frank Teruggi’s sister, Janis Teruggi Page, told the Times, “Frank, a charitable and peace-loving young man, was the victim of a calculated crime by the Chilean military, but the question of US complicity remains yet to be answered.”

Germany moves into deflation as global bond prices point to deepening slump

Nick Beams

The German economy has slipped into deflation for the first time since 2009, in another indication of the deepening recessionary trends across the euro zone.
Preliminary figures issued by the Federal Statistics Office yesterday showed that consumer prices fell by 0.3 percent in December from a year earlier. The office said that when the results were harmonised with figures from Eurostat for the whole euro zone, to be released today, the decline will be 0.5 percent.
While the drop in oil prices was a key factor, so-called core inflation, which strips out energy and food, is believed to have fallen.
Prices had been expected to show a decline, but the rate of decrease was greater than expected. Economic analysts are predicting that Germany will remain in deflation at least until the end of the year.
German Commerzbank chief economist Jörg Kramer commented: “[E]xpectations for eurozone inflation now carry a decidedly downside risk. The drop in oil prices suggests that the headline inflation should stay below zero until autumn.”
Earlier this month, the European Central Bank (ECB) announced a program of quantitative easing, involving the purchase of €60 billion worth of government bonds per month until at least September. The ECB said this was needed to meet its mandate to keep inflation near to, but below, 2 percent per annum. That target looks further away than ever.
The official fear of deflation flows from its financial impact, in particular on debt. Every fall in prices increases the real level of debt burdens, choking off investment and worsening the economic downturn.
The euro zone has yet to return to output levels it reached in 2007, with investment well down on pre-global financial crisis figures. The depressed character of the real economy is reflected most clearly in financial markets.
With profitable outlets in the real economy shrinking, money is being poured into bond markets, driving up prices and lowering yields to historic lows. The price of a bond, which brings a fixed annual return, and the yield or interest rate, calculated on the basis of its market value, stand in an inverse relationship to each other.
Yesterday, the yield or effective interest rate on the benchmark UK 10-year bond touched a low of 1.396 percent during morning trade. This was lower than at the worst point of the euro zone crisis in 2012 and the first time in history that it had gone below 1.4 percent. The yield on 30-year bonds also dropped to a record low of 2.102 percent.
The fall in bond yields reflects the outlook in financial markets that there is going to be no economic recovery and that the only way of accumulating profits is through ever-more parasitic forms of speculation.
There has been a flood of money into bond markets, seeking both a safe haven for cash and the opportunity to make money out of the bond-buying programs of the ECB and other central banks. As a result, interest rates have effectively turned negative in a number of markets.
“People tend to think of this as a European and Japanese issue but the move down in yields is a global trend. That increases your worry that economies are not responding to all this stimulus,” Citigroup chief economist Matt Kind told the Financial Times.
The newspaper noted the striking pace at which the “negative universe” is expanding. “Some €1.5 trillion of euro zone bonds with a maturity of more than one year—almost a quarter of the total—yield less than zero, according to JPMorgan’s calculations,” it reported. “Yields are also negative on Swiss and Japanese bonds.”
At first sight the phenomenon of negative yields appears to be a contradiction in terms because every bond brings a fixed amount paid by the issuing government at regular intervals, decided on when the bond was issued. At the end of the bond’s term, the government pays back to the holder its face value.
But before they come to maturity, bonds are traded in financial markets because of the income stream attached to them. They can be bought and sold above their face value.
Consequently, the price of the bond may rise so high in the market that it exceeds its face value and the amount of interest payments made on it, hence bringing a negative rate of return.
It would seem, therefore, that there is no reason for making such investments. However, if bonds are purchased in the belief that their price will rise still further in the market, not least because of the bond-buying operations of central banks, then they can be bought and sold at a profit.
Furthermore, the rapid movement in currency values over the recent period means that vast profits can be made by getting on the right side of such shifts. As the Economist magazine recently noted, “international investors who bought Swiss bonds before the Swiss franc’s recent jump [against the euro] will have made a killing.”
The falling bond yields and the emergence of negative interest rates point to the enormous pressure generated by financial markets for the supply of cheap money to continue to flow from central banks.
If this supply stops and there is any return to what were once considered “normal” conditions, then the process of buying bonds at elevated prices in the expectation that they will keep rising will come to a shuddering halt. The potential consequences threaten to outweigh even those of the 2008 financial crisis.
Meanwhile, in the absence of any profitable outlets for investment in the real economy, the phenomenon of parasitism on steroids continues—an indication of the ongoing breakdown of the global capitalist economy.
Alan Ruskin, a strategist at Deutsche Bank, told the Financial Times: “It was less than a year ago that negative interest rates were still largely a footnote in a dog-eared history book about 1970s Swiss monetary policy. Either bonds are mispriced and large losses loom for investors, or we have a big problem on our hands.”

Six million hit with Obamacare penalties for being uninsured

Jerry White

An estimated six million people will have to pay a penalty under the Affordable Care Act (ACA) for not having medical insurance in 2014, according to federal tax projections released Wednesday.
Under the law, popularly known as Obamacare, individuals and families who are not insured through their employer or a government program such as Medicare or Medicaid must purchase insurance from private companies or pay a fee on their federal income taxes for each month they go without coverage.
The penalty, called an Individual Shared Responsibly Payment, is a minimum of $95 for individuals but can be one percent of family income—potentially hundreds of dollars—if a dependent is not covered. The Treasury Department figures mean that between two and four percent of all taxpayers in the United States lacked medical coverage for all or part of the year and did not qualify for one of the exemptions from the so-called individual mandate.
Another 10 to 20 percent of taxpayers—or 15 million to 30 million people—were uninsured but will qualify for an exemption. The latter includes those whose incomes are so low that even the cheapest coverage would eat up eight percent of household income—defined by the government as “unaffordable” health care—or suffer from other hardships, such as homelessness, utility shutoffs, personal bankruptcy or the death of a close family member.
The penalties are nevertheless hitting wide sections of working people who cannot afford rising health care costs under conditions of stagnating wages and precarious employment. In a section on its web site, entitled “The Tax Penalty and the $95 Myth,” tax preparer Jackson Hewitt gave the example of an unemployed, uninsured 27-year-old moving back with her parents and two younger siblings for financial reasons. Even if everyone else in the household were insured, the family would have to pay a one percent penalty if the 27-year-old child could not sign up for minimal coverage. “If this family had an income of $68,000, the annual penalty would be $477, which is more than five times the $95 minimum!”
The tax figures, which indicate that up to 36 million people are still without insurance in the US, further exposes the fraud of Obamacare, which was presented as a means of providing near-universal, affordable health care for millions of Americans.
In fact the scheme has been a boondoggle for private insurance companies who have gained a captive customer base forced to buy insurance on the ACA “marketplace.”
According to the Obama administration estimates, which were adjusted downward after initially overinflated numbers, 6.7 million people received care through insurance purchased on private exchanges last year, just slightly above the number penalized for being uninsured. Officials claim that 9.6 million people have signed up for 2015 exchange plans, with two weeks left to enroll.
Nearly 90 percent qualified for some type of government subsidy due to income thresholds, in what is essentially a transfer of public money to private insurers. Even these individuals and families could be penalized this tax season.
If they incorrectly predicted their income last year, or if their income levels or family size changed, individuals could be forced to pay back some or all of their credits, up to $600. Mark Mazur, assistant secretary for tax policy at the Treasury Department, did not provide an estimate of how many of the 4.5 to 7.5 million recipients could lose their tax refunds or even still owe the IRS money.
Obamacare has added a series of new forms, check-off boxes and exemptions to the already convoluted and confusing process. The Hill reported that HealthCare.gov CEO Kevin Counihan is launching an effort to educate consumers with nonprofit groups and most major tax preparers. “Our goal, fundamentally, is to get people insured,” Counihan told reporters. “Our goal is not to get fee income [from penalties] or to make this difficult for folks.”
The federal figures show the overwhelming number of taxpayers—nearly 75 percent, or 112.5 million people—received coverage all year through their jobs. A major aim of Obama’s so-called health care “reform” is to provide corporations with an incentive to reduce medical coverage for their employees and force workers to pay more out-of-cost expenses for inferior care.
By 2018, a so-called Cadillac Tax will go into effect, which will subject higher quality employer-sponsored insurance plans to a 40 percent excise tax on benefits in excess of $10,200 for an individual and $27,500 for a family plan.
The issue is central in the labor agreement involving 30,000 oil industry workers, which expires on January 31. Pointing to the fall in oil prices, incredibly profitable companies like BP, Chevron Phillips, Exxon and others are pressing for higher monthly health care premiums, deductibles and out-of-pocket expenses.
Last year a survey of large corporations found that only a quarter of big firms said they were confident they would still be offering health care coverage by 2025. The results were the lowest percentage in the two-decade history of the survey conducted by Towers Watson and the National Business Group on Health.
Another study found that ACA will save US businesses $3.25 trillion through 2025, largely through ending employer-sponsored health care and shifting health insurance costs to workers and their families. Research from S&P Capital IQ Global Markets Intelligence (GMI), a financial information division of Standard & Poor’s, found that the “ACA presents an opportunity for US companies to radically redefine the role they play in the health care system.”
Obamacare has also been a boost to the drive by the corporate elite to transform the working class into an atomized, highly exploited workforce in the so-called “1099 economy.” This is named after the tax form used to denote workers not as “employees” but “independent contractors” who are not eligible for health benefits, unemployment insurance, worker’s compensation or retirement plans.
A recent front-page feature in the Economist, entitled “Workers on Tap,” praised companies like Uber, a smartphone app-based start up company that “hires” non-professional drivers, using their own cars and fuel, to pick up and transport customers. The workers only work when needed and have no health care or any other benefits.
The magazine hails this trend, writing, “Like mass production, it has profound implications for everything from the organization of work to the nature of the social contract in a capitalist society… Too much of the welfare state is delivered through employers, especially pensions and health care: both should be tied to the individual and made portable, one area where Obamacare was a big step forward.”

German president uses Auschwitz commemoration to justify militarism

Ulrich Rippert

On the occasion of the 70th anniversary of the liberation of the Auschwitz concentration camp by Soviet troops, German President Joachim Gauck made a commemorative speech on Tuesday in parliament. The sermonizing tone of the former East German clergyman was difficult to bear. But even worse was the cynicism with which Gauck used the Holocaust memorial day to legitimise the reemergence of German militarism.
The key promise after Auschwitz was “never again,” Gauck said, before responding, “but what is it worth?” He cited the German-Jewish jurist Thomas Buergenthal, who as an eleven-year-old just survived the death march at Auschwitz, before emigrating to the United States and working as a judge at the International Court of Justice.
Ten years ago, on the occasion of the 60th anniversary of the liberation of the Sachsenhausen concentration camp, Buergenthal declared that the expression “never again” didn’t amount to much. “Were there not the genocide in Cambodia, Rwanda and Darfur?” Gauck quoted Buergenthal, and Gauck added “were there not Srebrenica and today Syria and Iraq?”
“Even if here the crimes did and do not approach the dimensions of National Socialist mass murder,” Gauck went on, it was nevertheless terribly discouraging when, as Buergenthal said, genocide and mass murder have become almost routine, when the world declares “never again,” but closes its eyes in the face of the next genocide.
A year ago, Gauck announced the end of German military restraint at the Munich Security Conference and posed the question, “Do we Germans concern ourselves so intensively with our past because we are looking for an excuse to remain outside of the problems and the conflicts in the world today?”
On Tuesday, he posed the same question but in a different form: “Are we then ready and able for prevention, so that it never even gets to the point of mass murder? Are we at all in a position to halt these kinds of crimes and to punish them? Is the desire sometimes lacking to intervene against such crimes against humanity?”
Gauck’s demagogy in support of war follows a well-trodden and bizarre logic. Like no other country, Germany has experienced the crimes of fascism and the Holocaust. It was liberated by external military intervention. It established a stable democracy in the post-war years and must now rearm its military and intervene militarily everywhere in the name of human rights.
Gauck is using the terrible past crimes of German imperialism to prepare similar crimes in the future. His pious moralising plays an important role. He speaks about the Holocaust entirely separate from any political or historical context, as if evil suddenly overwhelmed ordinary people. His argumentation remains on the lowest level, never going beyond moral disgust at the incomprehensible depth of evil.
In the postwar period, the German population had not been willing to engage with the crimes of the Nazi era, said Gauck, failing to mention that the government of Konrad Adenauer was full of old Nazis and that at every level of society in West Germany, in business, politics, media, judiciary and universities, Nazi circles were in control.
Instead, Gauck pinned the blame on the ordinary people. Although Hannah Arendt had published her book on the “banality of evil” very early on, he said, it was only later that the culpability of the ordinary citizen, who had committed themselves to a criminal führer and refused to take any responsibility for the consequences, was examined.
It had taken some time before the Germans began to accept, Gauck said, “that it was entirely normal men and women who lost their humanity, their consciousness and their morals, often people from the local neighbourhood, or even people from the same family.”
Gauck repeated such arguments in order to deny any connection between fascism and capitalism.
In order for the Nazis to be able to carry out their murderous anti-Semitism, a whole series of major societal changes were necessary. The most important were the destruction of the organised workers movement, which in Germany, in particular, formed a massive bulwark against anti-Semitism and war, and the beginning of the war of extermination against the Soviet Union.
It was once well-known among politically educated and class conscious people that the rise of European fascism after the First World War was a direct response by the capitalist order to the revolutionary danger of the socialist mass movement of workers which threatened it.
Mussolini in Italy, Hitler in Germany and Franco in Spain mobilised the enraged middle class against the socialist workers movement. In this, anti-Semitism proved an effective means, just as the agitation against Muslims does today.
With the deepening of social tensions, in particular after the stock market crash of 1929, support for fascism within the ruling elite grew. Hitler did not have to violently seize power—it was handed to him by the highest level of the state, business and military in January 1933. Two months later, all of the bourgeois parties voted for a law giving Hitler emergency powers. The Communist Party, the Social Democratic Party and the trade unions were destroyed.
In contrast to Gauck’s disparaging talk of the “ordinary man,” it remains an historical fact that the workers movement in the 1930s opposed the rise of Hitler. This is not changed by the fact that the KPD, SPD and trade union leadership utterly failed, demobilised the working class with a false policy and thereby made it possible for Hitler to take power without a mass movement opposing him.
In the final analysis, the Holocaust was the price that the Jewish population and the whole of humanity paid for the failure of the working class to overthrow capitalism.
But even after the Nazis had the reins of state power firmly in their grasp, they were not in fact able to impose their murderous fantasies unhindered. For that, the world war was necessary. The extermination of the Jews merged with the war of extermination in the east, which aimed to physically eliminate the political and intellectual leadership of the Soviet Union so as to secure German dominance for centuries. The cold-blooded murder of six million Jews was the high point of a campaign of extermination in which millions of Communists, partisans, intellectuals and ordinary people were killed in Poland, throughout eastern Europe and in the Soviet Union.
With its offensive against Russia in Ukraine, where it is collaborating closely with former allies of the Nazis, German imperialism is today setting out on the same course. The same is true of the Middle East and Africa, where Berlin is backing ever more openly criminal wars under the pretext of humanitarian intervention. Gauck’s cynical attempt to justify the reemergence of German imperialism with the slogan “never again another Auschwitz” must be decisively rejected.

EU foreign ministers toughen sanctions against Russia

Johannes Stern

At yesterday’s meeting of EU foreign ministers in Brussels, the European Union avoided an open conflict over its aggressive course towards Russia and further toughened economic sanctions. The new Greek government under Alexis Tsipras, which had questioned the sanctions policy before the special summit, agreed to the new measures.
The decision will continue the existing travel bans and bank account freezes affecting 132 people and 28 organizations until at least September. In addition, other persons, alleged pro-Russian separatists in Ukraine and their supporters, will face similar measures. A further tightening of economic sanctions was not initially agreed. However, the ministers threatened to take the action should the situation in the disputed territories in eastern Ukraine worsen.
A final decision is not expected until a meeting of heads of state and government on February 12. “If there is an offensive towards Mariupol or other regions, one will need to respond with clear and harsher measures,” threatened German Foreign Minister Frank-Walter Steinmeier, a member of the Social Democratic Party.
Ahead of the meeting, the EU heads of state had threatened Russia with harsher sanctions. In a statement earlier this week, they called for the foreign ministers, “given the deteriorating situation” in Ukraine, “to assess the situation and to take appropriate actions into account, in particular further restrictive measures.”
In the same letter, the European leaders condemned “the killing of civilians by the indiscriminate shelling of the Ukrainian city of Mariupol” last weekend, and the supposed “continuing and growing support” of Russia for the separatists in eastern Ukraine.
The American government is singing the same tune. “As long as Russia, with its blatant disregard of its obligations, continues [...], the costs for Russia will continue to rise,” Vice President Joe Biden said on Wednesday in a telephone conversation with the President of Ukraine Petro Poroshenko.
While the Western powers criticise Russia for its alleged involvement in Ukraine, they are simultaneously expanding their economic and military support for the pro-Western regime in Kiev, which is conducting a brutal war against the population in eastern Ukraine.
Following a phone call with German Chancellor Angela Merkel, President Barack Obama held out the prospect of a further aid package for Ukraine. In the spring, the US Army plans to send trainers to western Ukraine to work with the Ukrainian National Guard, which is riddled with fascist elements. Obama recently signed into law the so-called Ukraine Freedom Support Act allowing the United States to supply heavy weapons to the Ukrainian government and to impose additional sanctions against Russia.
Despite the concerted offensive, the issue of further economic war measures against Russia is giving rise to increasing conflicts within and between European governments.
Prior to the meeting on Thursday, the German Vice Chancellor Sigmar Gabriel spoke out against tightening the sanctions. “At this stage it is too early, I think, to call for further sanctions,” the SPD chairman told the ZDF broadcast “What now?” Even in the most difficult times we should “not abandon European Russia and just say, now it’s a new Cold War for 30 years.”
Along with the US, the German government has played a leading role in the installation of the pro-Western Poroshenko regime in Ukraine, but it fears a complete breakdown of political and economic relations with Russia.
Nevertheless, Gabriel still threatened the government in Moscow. If Putin tried to link the separatist region to Crimea, that would be “such an escalation by the separatists, supported by Russia, that we cannot just sit and watch.” At the same time, Gabriel warned the new Greek government against adopting a unilateral orientation towards Moscow and departing from the previous line of the EU. “The stupidest thing we could do is to be divided among ourselves,” he warned.
The new Greek government and its foreign minister Nikos Kotzias had initially sharply criticized the statement by the EU leaders. He said Greece had not been consulted and it did not coincide with Greek interests. Due to close economic ties and cultural affinities with Russia, Greece rejected tougher sanctions against Russia, he said.
The growing tensions over the course against Moscow reflect the sharp political and economic crisis in Europe. The catastrophic social impact of the austerity measures, especially in southern Europe, and the EU’s increasingly militaristic foreign policy is fueling tensions within the alliance and between the European states.
Rather than expressing any fundamental disagreement between the EU and the new Greek government, the harsh rhetoric is being used to find a common course. While the EU is forcing Tsipras to share in the official austerity policies and the confrontation with Russia, he has suggested certain changes in the official policy in order to get the crisis under control, and insists again and again he wants to “save” the EU.
In parallel with the foreign ministers’ meeting, the European Parliament President Martin Schulz travelled to meet with Tsipras to Athens. The social democrat warned the new Greek government against taking unilateral political action. They had not been elected to boycott sanctions against Russia, he said on German television before his trip. He added arrogantly, “I have no desire to conduct ideological debates with a government that is barely two days in office. What we need are pragmatic solutions, which I will propose to him.”
The European Central Bank (ECB) also warned the Greek government not to deviate from the existing course. “Greece must continue to play by the rules,” ECB director Benoit Coeure said in an interview on Thursday with the Italian newspaper Corriere della Sera. “All decisions can have only one goal, namely to continue with the reforms in Greece,” he explained. Even with a new government, nothing will change the fact that Greece needs further reforms, he said.
Although Coeure said that Europe accepts the political change in Athens, he added that the ECB cannot make any contribution when it comes to a possible lessening of Greece’s debt burden. The term of the Greek government bonds, which where purchased from the country’s central bank, could not be extended. “That would be like giving a loan to Greece and the contracts prohibit it,” he said.
The hard line of the high-ranking EU representative not only speaks volumes about the essentially dictatorial character of the EU, but also about the class character of Syriza. The majority of the population rejects the policies austerity and war. However, even following the elections in Greece, Tsipras will continued these policies in close cooperation with his right-wing coalition partners the Independent Greeks.

Income inequality soars in every US state

Andre Damon

Income inequality has grown in every state in the US in recent decades, according to a new study published this week by the Economic Policy Institute. The report, entitled The Increasingly Unequal States of America, found that, even though states home to major metropolitan financial centers such as New York, Chicago, and the Bay Area had the highest levels of income inequality, the gap between the rich and the poor has increased in every region of the country.
“It doesn’t matter if you’re looking at Hawaii or West Virginia or New York or California, there has been a dramatic shift in income towards the top,” said Mark Price, an economist at the Keystone Research Center in Harrisburg, Pennsylvania, and one of the study’s co-authors, in a telephone interview.

Source: Economic Policy Institute

The report noted that between 2009 and 2012, the top one percent of income earners captured 105 percent of all income gains in the United States. This was possible because during this period the average income of the bottom 99 percent shrank, while the average income of the top one percent increased by 36.8 percent.
To varying degrees, this phenomenon was expressed throughout the country. In only two states did the income of the top one percent grow by less than fifteen percent.
The enormous concentration of wealth in the top 1 percent was even further concentrated in the top .01 percent. In New York, for instance, someone had to make $506,051 per year to be counted in the top one percent, but $16 million to be in the top .10 percent. The average income within the top .01 percent in New York was a staggering $69 million.
“Most of what’s driving income growth are executives in the financial sector, as well as top managers throughout major corporations,” said Dr. Price. “Those two together are the commanding heights of income in this economy.”
Dr. Price and his co-author, Estelle Sommeiller, based their study on the methods of Thomas Piketty and Emmanuel Saez, whose widely-cited research analyzed the growth of income inequality for the United States as a whole. Using state-by-state data from the Internal Revenue Service, much of which had to be compiled from paper archives dating back almost a century, Price and Sommeiller were able to make a state-by-state analysis of income inequality since 1917.
Nationwide, the average income of the top one percent of income earners is 29 times higher than the average income of the bottom 99 percent. But in New York and Connecticut, the average income in the top 1 percent is 48.4 amd 51.0 times higher than the average for the rest of earners, respectively.
New York City is the home of Wall Street and boasts more billionaires than any other city in the world. Connecticut is home to many of the largest hedge funds in the world. Ray Dalio, the founder of Westport, Connecticut-based hedge fund Bridgewater Associates, earned $3 billion in 2011 alone.
While the average income of the bottom 99 percent of income earners in New York state was $44,049, the average income of the top one percent was $2,130,743. For the United States as a whole, the top one percent earned on average $1,303,198, compared to an average income of $43,713 for the bottom 99 percent.
In California, the most populous US state, the top one percent received an average income of $1,598,161, which was 34.9 times higher than the average pay of the bottom 99 percent. In 2013, four of the highest-paid CEOs in the United States were employed by technology companies, which are disproportionately located in California. At the top of the list was Oracle CEO Larry Ellison, with a current net worth of $53.4 billion, who made $78 million in pay that year.
The study shows that the average income for the bottom 99 percent of income earners is relatively consistent across states, with no state showing an average income more than 33 percent above or below the average for the whole country.
The average incomes of the top one percent varied widely, however: from $537,989 for West Virginia to $2.1 million in New York. According to Forbes, the wealthiest resident of West Virginia is coal magnate Jim Justice II, who, with a net worth of $1.6 billion, is the state’s only billionaire. New York City, by contrast, has four residents worth more than $20 billion, including chemical tycoon David Koch, with a net worth of $36 billion; former Mayor Michael Bloomberg, with a net worth of $31 billion; and financiers Carl Icahn and George Soros, worth $20 billion apiece.
Yet despite the broad disparity in the relative concentration of the ultra-rich, every single state showed a pronounced and growing chasm between the wealthy few and the great majority of society. In Alaska, which has relatively high wages and few billionaires, the incomes of the top one percent were on average more than fifteen times higher than the bottom 99 percent.
The report noted that exploding CEO pay has set “new norms for top incomes often emulated today by college presidents (as well as college football and basketball coaches), surgeons, lawyers, entertainers, and professional athletes.”
Price added, “As the incomes of CEOs and financiers are rising, you’re starting to see that pull, almost like a gravity starting to pull up other top incomes in the rest of the economy.
“A University president might claim, ‘I run a big institution, you expect me to raise money from some of the wealthiest people in the country, you’ve got to pay me a salary that helps me socialize with them.’”
Price said that, while inequality figures are not available nationwide on the local level, his work on income inequality in the state of Pennsylvania shows that income inequality is growing in counties throughout the state, in both rural and urban centers.
Nationwide, the income share of the top one percent fell by 13.4 percent between 1928 and 1979, a product of the New Deal and Great Society reforms, as well as higher taxes on top earners. These measures were the outcome of bitter and explosive class struggles. But in subsequent years, that trend has been reversed.
As a result, income inequality in New York State was even higher in 2007 than it was in 1928, during the “roaring 20s” that gave rise to the Great Depression. In the period between 1979 and 2007, every state saw the income share of the top 1 percent grow by at least 25 percent.

Source: Economic Policy Institute

Citing a previous study by the Economic Policy Institute, the report noted that “between 1979 and 2007, had the income of the middle fifth of households grown at the same rate as overall average household income, it would have been $18,897 higher in 2007—27.0 percent higher than it actually was.”
The enormous growth of social inequality is the result of an unrelenting, decades-long campaign against the jobs and living standards of workers. Under the Obama administration, the redistribution of wealth has escalated sharply, through a combination of bank bailouts and “quantitative easing,” which has inflated the assets of the financial elite.
These policies have been pursued by both parties and the entire political establishment, which is squarely under the thumb of the corporate and financial oligarchy that dominates American society.

New Zealand Internet and Mana Parties split following electoral debacle

J. Braddock & T. Peters

In the wake of an abysmal result in last September’s New Zealand election, the Mana and Internet parties agreed to split. The Internet Mana Party (IMP), established last May, was formally dissolved last month. The Internet Party (IP), which was founded shortly before the merger, is “reviewing” its future and may be wound up.
The IMP received just 1.4 percent of the overall party vote, well short of the 5 percent threshold to enter parliament. In a crucial setback, Mana’s leader and sole MP, Hone Harawira, lost his Te Tai Tokerau seat, one of the seven Maori electorates, to Labour.
The overall election result reflected the vast chasm that has opened up, under conditions of sharpening social crisis and preparations for war, between the working class and the entire edifice of official politics. The National Party government and the main opposition Labour Party share essentially the same program of ongoing austerity at home and support for US militarism overseas. Approximately a million people did not vote and Labour received its worst result in 92 years, with just 25 percent of the votes. The immediate beneficiary of the near-record abstention was National, which was re-elected.
Amid the collapse in support for the main parties, the IMP presented itself as an “anti-establishment” alternative. Mana leaders repeatedly declared that they represented “the poor and dispossessed” and called for reforms such as lunches in some schools and a higher minimum wage. The Internet Party criticised the state surveillance agency, the Government Communications Security Bureau (GCSB), and invited journalist Glenn Greenwald and US National Security Agency whistleblower Edward Snowden to address a public meeting five days before the election.
Despite its campaign rhetoric, however, the IMP was an alliance of two capitalist parties, which aimed to enter parliament to prop up a Labour-led government. Like Labour, the IMP did not call for the abolition of the state spying agencies but merely a “review” of their activities. It did not oppose the military and intelligence alliance with the US.
In the lead-up to the election, Mana joined Labour and the right-wing NZ First Party in campaigning against immigration and foreign investment, particularly from China. This xenophobic campaign dovetailed with the push by the Obama administration to strengthen its military alliance with NZ as part of Washington’s “pivot” to Asia: the US military encirclement and preparations for war against China.
Mana’s Maori nationalist platform calls for greater government payouts to indigenous tribal businesses. The IP, founded by the multi-millionaire businessman Kim Dotcom, openly represents an upwardly-mobile layer of young tech entrepreneurs. Dotcom, who had previously donated money to the extreme pro-market ACT Party, called for measures to boost the profits of technology firms like his own. The Internet Party advocated government grants for web-based start-up companies. Dotcom bankrolled the IMP to the tune of $4 million, prompting Harawira to boast that Mana could “no longer be pigeonholed as a party for Maori, the disaffected and for the radical fringe.”
The alliance exposed, in particular, the right-wing character of the pseudo-left groups affiliated to Mana—the International Socialist Organisation (ISO), Fightback and Socialist Aotearoa (SA)—and their integration into the political establishment. All three groups campaigned for the IMP, while leading members of Fightback and SA stood as IMP candidates. They falsely presented Mana as a “left wing” alternative to Labour and National, while justifying its merger with the Internet Party by absurdly claiming that Dotcom had been “radicalised” by the government’s attempts to extradite him to the US on copyright infringement charges.
Following the election defeat, Mana and IP members continued to defend the alliance. Mana’s John Minto blamed the result on the media’s attacks on Dotcom and Labour’s attempts to distance itself from the IMP. He claimed that the merger had “worried the political establishment” because Dotcom’s “massive wealth” gave the IMP the financial resources it needed to challenge “corporate wealth and power.”
Other IMP apologists cynically blamed the working class for the defeat of the so-called “left:” Labour, the Greens and IMP. Martyn Bradbury, who edits the trade union funded Daily Blog, contemptuously declared that New Zealanders rallied to support National’s “mass surveillance and dirty politics.”
Socialist Aotearoa, in a post-election article, declared that the IMP failed to win votes because “the conditions of austerity imposed elsewhere have been avoided” in New Zealand and the working class was not “desperate enough” to support Mana’s “anticapitalist programme.” The ISO similarly implied that the working class is either right-wing or apathetic. It declared that the National government had refrained from major attacks on the working class and “by and large, has succeeded” in portraying Prime Minister John Key as “competent, likeable and popular.”
In reality, Key’s government is reviled by the working class. The near-record abstention in the election demonstrated that there is widespread hostility toward every established party. National has carried out a series of attacks on living standards and public services, including at least 7,000 job cuts, cuts to healthcare, welfare and education and an increase in the consumption tax.
Claims that workers enjoy a comfortable living standard and have not suffered greatly from the economic crisis are false to the core. Throughout the country median incomes declined between 2006 and 2013; in working class South Auckland by over 16 percent. In Northland, part of the Te Tai Tokerau electorate, economist Shamubeel Eaqub has compared economic conditions to those in East Timor, one of the world’s poorest countries.
Despite the IMP’s well-funded and highly visible campaign, and the enthusiastic support it received from the pseudo-lefts, the alliance failed to gain significant support because masses of workers saw it as no alternative to the political establishment. Far from being “anti-capitalist,” Mana represents the Maori bourgeoisie and upper-middle class, a layer that promotes xenophobia and racialist politics in order to divide the working class and advance its own interests. Mana’s alliance with the Internet Party, the creation of a multi-millionaire, was the clearest expression of its pro-business agenda.
The election result—the return of a government committed to austerity and militarism—demonstrates that anger and disgust with capitalist parties is not enough. The working class urgently needs its own party, based on a socialist and internationalist program, to organise the fight against war and for social equality. Building such a party requires a struggle against all those groups, including the ISO, Fightback and Socialist Aotearoa, who seek to shackle workers and youth to right-wing parties like the IMP.