Spain: Breaking Up is Hard to Do

Conn Hallinan

When the Catalans goes to the polls Oct. 1, much more than independence for Spain’s restive province will be at stake. In many ways the vote will be a sounding board for Spain’s future, but it is also a test of whether the European Union—divided between north and south, east and west—can long endure.

In some ways, the referendum on Catalan independence is a very Spanish affair, with grievances that run all the way back to Catalonia’s loss of independence in the War of the Spanish Succession (1701-1714). But the Catalans lost more than their political freedom when the combined French and Spanish army took Barcelona, they lost much of their language and culture, particularly during the long and brutal dictatorship of Francisco Franco from 1939 to 1975.

The current independence crisis dates back to 2010, when, at the urging of the rightwing Popular Party, the Spanish Constitutional Court overturned an autonomy agreement that had been endorsed by the Spanish and Catalan parliaments. Since then, the Catalans have elected a pro-independence government and narrowly defeated an initiative in 2014 calling for the creation of a free republic. The Oct. 1 vote will re-visit that vote.

But the backdrop for the upcoming election has much of Europe looking attentively, in part because there are other restive independence movements in places like Scotland, Belgium and Italy, and in part because many of the economic policies of the EU will be on the line, especially austerity, regressive taxation, and privatization of public resources as a strategy for economic recovery.

When the economic meltdown of 2008 struck, there were few countries harder hit than Spain. At the time Spain had a healthy debt burden and a booming economy, but one mainly based on real estate speculation fed by German, Austrian, French, British and U.S. banks. Real estate prices ballooned 500 percent. Such balloons are bound to pop, and this one did in a most spectacular fashion, forcing Spain to swallow a bailout from the EU’s “troika”—the International Monetary Fund, the European Commission, and the European Bank.

The price of the bailout—the bulk of which went to pay off the banks whose speculation had fed the bubble in the first place—was a troika-enforced policy of massive austerity, huge tax hikes, and what one commentator called “sado-monetarism.” The results were catastrophic. The economy tanked, unemployment rose to 27 percent—over 50 percent for youth—and some 400,000 people were forced to emigrate.

While the austerity bred widespread misery, it also jump-started the Left Podemos Party, now the third largest in the Spanish parliament and currently running neck and neck with the Spanish Socialist party. Podemos-allied mayors control most of Spain’s largest cities, including Madrid, Valencia, and Barcelona.

In the 2015 election the ruling Popular Party lost its majority and currently rules as a minority party, allied with the conservative Catalan Ciudadanos Party and the main Basque party.

Needless to say, the PP’s control of Spain is fragile.

Starting in 2014 the Spanish economy began to grow, unemployment came down, and Spain seemed on its way back to economic health. Or at least that is the story the Popular Party and the EU is peddling.

The economy is the fastest growing in the EU, averaging around 3 percent a year. Next year projections are that it will grow 2.5 percent. Unemployment has dropped from 28 percent—50 percent for youth—to just over 17 percent.

But youth unemployment is at 37 percent, the second highest in Europe, and wages have still not caught up to where they were before the 2008 crisis. Spain is adding some 60,000 jobs a year, but many of them are temporary and without the same benefits as full time workers.

This temp worker strategy is continent-wide. Of the 5.2 million jobs created between 2013 and 2016, some 2.1 million were temporary.

The “recovery” is partly due to “labor reforms” that make it easier to layoff workers and replace full-time workers with “temps.” The shift has been from full-time workers protected by labor agreements to insecure temps with few protections. While that might make products cheaper and, thus, more attractive, it impoverishes the work force.

The strategy has become so widespread that economists have borrowed a term from physics to describe it: hysteresis.

Hysteresis describes a phenomenon where force permanently distorts what it is applied to.

“When unemployment is high for a long period of time, the shape of the labour market alters,” says Financial Times economist Claire Jones. “Would-be workers lose their skills, or find that technology or other economic forces make them obsolete. When the recovery comes, they are unable to join in. longer-term, or structural levels of unemployment set in and economy’s potential diminishes.”

In short, hysteresis produces an army of under and unemployed workers, whose living standards decline and who are economically marginalized. It also creates a vicious cycle that eventually dampens an economy. If governments are not spending—and under the strictures of the troika that is a given—and if consumers don’t have money, growth will eventually come to a halt, or at least become so anemic that it will be unable to absorb the influx of a younger generation.

Those marginalized communities and sectors of the economy are fertile ground for rightists who use xenophobia and racism to whip up anti-immigrant sentiment, as recent elections in Europe and the U.S. have demonstrated.

The vote by Britain to withdraw from the EU was put down to racism, but ,while anti-immigrant sentiment did play a role in the Brexit, that argument is a vast oversimplification of what happened. Much of the Brexit vote was not so much xenophobic as a repudiation of the major political parties that abandoned whole sectors of the country.

This particularly included the policies instituted by former Prime Minister Tony Blair and the “New Labour Party” that jettisoned its ties with the trade union movement and bought into the neo-liberal policies of free trade and globalization.

However, many of those Brexit voters turned around a few months later and backed the Labour Party and Jeremy Corbin’s left agenda. Given an opportunity to vote for ending the long reign of austerity, and for free university tuition, improved health services, and re-nationalizing transportation, they voted Labour, xenophobia be dammed.

Because the Spanish Popular Party claims that the current economic recovery is the direct result of its austerity and labor policies, other EU players are paying attention to the Catalan vote. If the vote goes badly for Catalan independence—and polls are currently showing it will be defeated 42 percent to 48 percent—the PP will claim a victory, not only over Catalan separatism, but also for the Party’s economic recovery strategy.

The French are certainly paying attention. Newly elected President Emmanuel Macron is preparing a similar program of cutbacks and labor “reforms” that he intends to ram through by executive decree, bypassing the French parliament.

A  victory for the PP is also in the interests of the troika as proof that its recovery formula works, even though the track record of austerity as a cure has few success stories, and even those are questionable. For instance, low energy prices and a weak euro have more to do with the Spanish recovery than cutbacks in social services and the evisceration of labor codes.

The Popular Party should be riding high these days, but in fact its poll numbers are declining. It is still the largest party in Spain, but that translates into only 31 percent of the voters. Between them, the Spanish Socialist Party and the leftist Podemos Party garner just short of 40 percent.

Part of the PP’s woes stem from the fact that many Spaniards recognize there is something sour about the recent “recovery,” but there are also the corruption charges leveled at the PP, charges that have even ensnared Mariano Rajoy. The Prime Minister was recently forced to testify in a bribery and fraud case against some leading members of his Party.

While the Socialists have also been tarred with the corruption brush, the current case has riveted the public’s attention because some of it reads like a script from the Sopranos. The key defendant is Francisco Correa, who likes to be called Don Vito, Marlon Brando’s character in The Godfather. Two of his associates are known as The Moustache and The Pearl. Correa and 10 others have already been sentenced to prison for fraud and bribery, but Correa is also on trial for setting up a slush fund. Rajoy testified in that trial, although so far the Prime Minister is not accused of any wrongdoing.

A survey by the CIS Institute found that almost 50 percent of Spanish voters are deeply concerned with corruption, and that sentiment is dragging the Popular Party down.

The left and center-left parties are split on the Catalan question. Both oppose separatism, but they come at it very differently. Podemos is urging a “no” vote Oct. 1, but it supports the right of the Catalans to have their initiative. That position, along with Podemos’s progressive political program, has made it the number one party in Catalonia.

The Socialists have traditionally opposed Catalan separatism, and even the right of the Catalans to vote on the issue. But that position has softened since a major upheaval in the party that began last year when the Socialist’s right wing pulled off a coup and drove the Party’s left wing out of power. But the Socialist right-wingers made a major mistake by voting to allow Rajoy to form a minority government and continue the austerity policies. That move was too much for the Party’s rank and file, who threw out the right this past May and reinstated the Socialist’s left wing.

The Socialists’ willingness to consider allowing the initiative is partly a matter of simple math. The Party’s opposition to Catalan independence has resulted in it being virtually annihilated  in the province, and no Socialist Party has ever come to power in Spain without winning Catalonia.

Whatever happens Oct. 1, Spain is not going to be the same country it has been since the restoration of democracy in 1977. The old two-party domination of the government is over, and there is general recognition that there has to be some shift on the Catalan question. Even Rajoy—who has hinted that he might consider using the military to block the Oct. 1 vote, or ruling the province from Madrid—has offered to give Barcelona the same deal the Basque province have. That would include collecting taxes, something Catalans now don’t have the right to do.

There is no little irony in Rajoy’s offer. When the Catalans made that same offer in 2012, Rajoy and the Popular Party wouldn’t even discuss the proposal. It is a measure of how the issue has evolved that Rajoy is now making the same offer as the Catalans did a half decade ago.

Polls—weak reeds to lean on these days—show the initiative going down to defeat, but the situation is fluid. Rajoy’s recent proposal and the softening of the Socialist Party’s position might convince the majority of Catalans that some kind of deal can be cut. Young Catalans favor independence, but older Catalans are uncomfortable with what will be a leap into darkness.

On the other hand, if Rajoy comes down hard it will likely bolster the “no” vote.

The European Union is in a crisis of its own making. By blocking its members from pursuing different strategies for confronting economic trouble and, instead, insisting on one-size-fits-all strictures, the trade group has set loose centrifugal forces that now threaten to tear the organization apart.

The eastern members of the EU have charted a course that throttles democracy in the name of stability. The southern members of the bloc are struggling to emerge from austerity regimes that have inflicted widespread, possibly permanent, damage to their economies. Even members with powerful economies, like Germany and France, are trying to keep the lid on the desire of their people for a better standard of living.

The Catalan vote reflects many of these crosscurrents, and is likely to be felt far beyond the borders of Iberia.

Growing concerns in Bangladesh over India-China tensions

Rohantha De Silva

The ongoing standoff between India and China over Doklam, a narrow plateau in the Himalayas at the junction of Bhutan, China and India, has seen a number of concerned political comments in the Bangladesh media. Bangladesh has close relations with both India and China.

The conflict over the Doklam Plateau began in mid-June when Indian troops crossed into the territory in an attempt to prevent road expansion by Chinese forces, raising the danger of a military conflict between the two nuclear-armed powers.

China wants to build a link road to access the Chumbi Valley, already the subject of a border dispute between China and the small Himalayan kingdom of Bhutan. The Chumbi Valley adjoins India’s Siliguri Corridor, a narrow stretch of land also known as the Chicken’s Neck. India’s rail and road connections to its north-eastern states pass through this corridor, which is sandwiched between Bangladesh and China.

Bangladesh has previously attempted to politically balance between US-backed India and China but its ability to continue these manoeuvres is being hampered by the Doklam dispute. The government of Prime Minister Sheik Hasina has not issued any official statements on the issue.

The political silence is in contrast to Dhaka’s reaction to conflicts between India and Pakistan. Last November, India withdrew from the South Asian Association of Regional Corporation summit in Islamabad after accusing Pakistani troops of attacking its army post at Uri, in the Indian state of Jammu and Kashmir in September 2016. India carried out so-called surgical strikes into Pakistan-held Kashmir in retaliation for Uri. Hasina supported New Delhi’s cross border military attacks and later followed India in withdrawing from the event.

While the Bangladesh government remains silent, local media commentators and strategic analysts have voiced their concerns.

On August 7, the Dhaka Tribune published an article entitled, “What does the China-India standoff mean for Bangladesh?” Noting that Bangladesh had “extensive ties with both countries on the political, economic and military front,” it said that Dhaka was in a “precarious situation.” It warned that if China took control of the Doklam Plateau, Bangladesh would be in a “serious predicament” and that “India would want to use Bangladesh as a transit for military purposes” to counter China.

Bangladesh, which has a 4,000 km border with India, is heavily dependent on India for water, trade and security. Dhaka is attempting to improve relations and plans to develop four river ports between the two countries and improve infrastructure in three existing ports.

New Delhi, however, is concerned about Dhaka’s close military and economic ties with Beijing. In an effort to counter Beijing’s influence, Indian Prime Minister Narendra Modi visited Bangladesh in May 2015, promising economic and military assistance. Bangladesh signed a comprehensive defence agreement with India during the trip.

In April, Bangladesh Prime Minister Hasina travelled to New Delhi. During the visit officials from both countries signed a number of agreements, including on defence, cyber security, information technology, connectivity, energy and human resource development and a civil nuclear cooperation pact.

An August 4 article on wionews.com by Sarvar Jahan Chowdhry from BRAC University in Bangladesh, noted that the “worst thing for Bangladesh would be if the Chinese and the Indians start fighting each other in a big way and Bangladesh is forced to take sides.”

The author commented that so far, Bangladesh “has been careful about Indian sensitivities and honoured it even by accepting losses,” and cited the country’s cancellation of a contract with China’s state-owned company to build a deep seaport at Sonadia. The deal was called off after Dhaka came under pressure from New Delhi and Washington, as part of US-led efforts to diplomatically isolate Beijing.

While arguing the merits of Bangladesh maintaining good relations with China and India, the author failed to explain how this could be achieved under conditions of increasing US economic and military provocations against China.

For its part, China is boosting its economic and military ties with Bangladesh. The Tribune comment pointed out that the two countries have signed agreements worth $US13.6 billion and Beijing has promised to provide $20 billion in loan assistance.

In 2016, China channeled $61 million in foreign direct investments (FDI) into Bangladesh. While this is small compared with US investment, it is a marked increase on the $18 million Chinese FDI in 2011. The Hasina government has also joined China’s ambitious “One Belt, One Road” initiative, which is aimed at boosting trade and transport links across Asia and into Europe.

Bilateral trade between the two countries has increased dramatically over the past four years. According to Export Promotion Bureau of Bangladesh statistics, Dhaka’s total merchandise exports to China climbed to $US808.14 million in 2015–16, up from $US319.66 million in 2010–11.

China is also Bangladesh’s principal supplier of military hardware. Dhaka’s recent purchase of two Chinese submarines for $203 million has provoked concerns in New Delhi.

On July 31, the Chinese embassy in Dhaka hosted a function to celebrate the 90th anniversary of the founding of the Chinese People’s Liberation Army. The embassy’s military attaché declared that military relations between China and Bangladesh had reached “unprecedented heights.”

While media commentators have limited their analysis to the strategic and economic impact on Bangladesh of the Doklam Plateau conflict, the rivalry between India and China—two nuclear-armed countries—could erupt into war with far-reaching implications for South Asia and throughout Asia. Such a conflict could involve the US, which would back India, and become a catastrophic global conflagration.

The major destabilising factor in the geopolitical tensions in South Asia is the US. Having made India one of its principal regional partners in the military build-up against China, Washington has fueled New Delhi’s geopolitical ambitions and, in turn, provoked Beijing’s counter-moves.

Conservative government review of UK “gig economy”—a whitewash for the corporations

Thomas Scripps 

Following a spate of strikes and disputes in the UK’s low-paid and highly exploitative “gig economy,” the Taylor Review was published in July. The Review was commissioned by Conservative prime minister Theresa May to look into “modern working practices” based on temporary, zero-hours [a contract whereby an employer is not obliged to provide any minimum working hours] and part-time employment.

It was produced by Matthew Taylor, head of the Royal Society for the encouragement of Arts, Manufactures and Commerce. The real purpose of Taylor’s Review was to make a few pro-forma criticisms of the gig economy, while giving it the ultimate seal of approval.

This sector has grown in recent years to comprise a substantial 20 percent of the workforce. Roughly 905,000 people are on zero-hours-contracts (up from 168,000 in 2010), 1.7 million are in temporary employment (207,000 more than in 2006) and 4.8 million are self-employed. The latter category accounts for two-thirds of new jobs created since 2008.

After 13 years of Labour rule, by 2011, zero-hours-contracts were mushrooming in many parts of the economy. In the hotels and restaurants sector, they existed in 19 percent of all workplaces, up from 4 percent in 2004. In the health sector, they were at 13 percent (up from 7 percent) and in the education sector at 10 percent (up from 1 percent).

There are also 865,000 agency workers, up 30 percent since 2011 and set to reach 1 million by 2020.

These “modern working practices” mean poverty and insecurity on a massive scale, the mental and physical effects of which have begun to be exposed.

A study released last month by the UCL Institute of Education found that young people (aged 25) on zero-hours-contracts were one-and-a-half times more likely to have mental health problems compared to those in more secure employment. They were also 43 percent less likely to enjoy good physical health.

Adult workers are similarly affected, according to research from Bath Spa University into UK workers on zero-hour-contracts. It concluded in the journal Occupational Medicine, “A greater proportion of individuals with zero hour contracts had scores above accepted mental health cut-offs.”

Far from opposing the vast exploitation, which is inherent to such as zero-hour-contracts, Taylor praises the “flexibility” and “choice” on offer to workers.

The report makes a virtue out of not taking a regulatory or legislative approach to the problem, i.e., banning such employment practices. It argues, “The best way to achieve better work is not national regulation but responsible corporate governance.” What is required, according to Taylor, is a more positive “corporate culture,” with those companies that have created and exploited insecure contracts—having been given free rein to do so by successive Labour and Conservative governments—now supposedly ready to undertake a dramatic, even Damascene conversion.

Taylor’s recommendations to extend sick and holiday pay ignore the fact that many workers already formally have these entitlements, but are routinely denied them. Citizens Advice recently reported that half of those on zero-hour-contracts think they are not entitled to paid holiday. While the report suggests that employment tribunal fees for cases regarding employment status should be removed, the fees incurred by workers asserting their employment rights are left untouched.

Taylor’s recommendations regarding the extension of sick and holiday pay, the implementation of a higher minimum wage for non-guaranteed hours and the right to statements of employment details are left so vague and rely so heavily on the goodwill of employers they are not worth the paper they are written on. In any case, such miserly concessions are ultimately geared towards the preservation of the overall system of insecure work, with its corrosive effect on workers’ rights and conditions.

Taylor’s proposed revival of piece-rates is a direct attack on workers’ pay. The review states that gig employers ought to be exempted from the requirement to pay the minimum wage, instead paying workers on a per-job basis as long as they can show that that the average worker, working averagely hard, would earn 120 percent of the minimum wage. It will be left to the employers to model that average.

A number of the Review’s conclusions have nothing to do with workers’ rights or pay, but are dedicated to handing out giveaways to employers (by reducing the “employment wedge” of non-wage costs associated with employing a person) and clamping down on missed taxes in the “cash-in-hand” economy.

The report’s bias in favour of employers is not an oversight, as the political establishment that Taylor speaks has no intention of bringing “precarious employment” under control. The panel of four overseeing the project included an employment solicitor routinely in the pay of major companies, and even a former Deliveroo investor. Workers had no representation. Taylor himself, a former advisor to former Labour prime minister Tony Blair, specialises in defending big business on the basis of a few platitudes about combining the “progressive” and the “possible.” His Review is designed to brush any criticisms of self-employed, zero-hour and temporary work aside with a few token “remedies,” while handing the overall exploitative system a clean bill of health.

The reasons for this have become clear over the past years. Following the 2008 financial crash, the prevalence of self-employed, zero-hour and temporary workers has grown substantially, placing millions more people into financially insecure positions. These forms of employment have grown particularly prevalent among young workers (age 21-25)—the numbers of who are in low-paid work increased 82 percent between 1990 and 2015. What this points to is a fundamental restructuring of the labour market in the interests of big business.

Gig economy workers on poverty wages, for the most part denied basic labour rights and protections, form a highly exploitable workforce that not only provides high rates of profit to employers, but sets a new standard that other employees continually compete with in a race to the bottom.

The Conservative-supporting Daily Telegraph, which has led the way in championing this process, recently published an article, “How Britain’s self-employed army are keeping our economy afloat,” lauding the fact that the self-employed are “helping to drive down the sickness absence rate in the UK… to a record low.” The rise of the UK gig economy is part of an international phenomenon. 94 percent of the jobs created under Barack Obama’s presidency were part-time. The percentage of the US workforce engaged in “alternative” or “gig” work grew from 10.7 percent in 2005 to 15.8 percent in 2015. According to the report, “Independent Work: Choice, Necessity, and the Gig Economy,” published by the McKinsey Global Institute, the overall percentage of workers engaged in independent work in the US in 2016 was 27 percent.

Across the developed European economies (EU15), the figure is between 20-30 percent. In Germany, a study by the Hans Böckler Foundation this year noted “an increase in atypical employment, especially part-time, often in the service and low-wage sector.” The number of working poor in the country doubled from almost 1.9 million in 2004 to around 4.1 million in 2014.

These figures reflect the drive by the super-rich across the world to secure enhanced rates of exploitation in a globally competitive economy. They have been empowered by the combined development of modern technology and its monopolisation by major corporations—the consequences of which can be seen in Uber’s operations.

Unionisation in the private sector as a whole stands at just 18 percent (4 percent for young workers), following a prolonged period of sharp decline over the past 40 years, in reaction in part to an unending list of betrayals. It is the unions’ abandonment of any basic defense of the working class in recent decades, in favour of policing a globally competitive workforce, that has allowed the assault on jobs, pay and conditions to develop to this stage.

Labour Party leader Jeremy Corbyn stretched himself to calling the Review a “huge missed opportunity” and listed the Labour manifesto’s plans to abolish Employment Tribunal Fees, scrap zero-hour contracts and give rights to all workers from day one on the job. From the leader of a party no less savagely anti-worker than the Tories when in power, these promises ring hollow.

Medicaid sees big price hikes for decades-old drugs

Brad Dixon 

An investigation by Kaiser Health News (KHN) found that numerous decades-old drugs still have high price tags, and some remain branded despite how long the drugs have been available on the market.

Based on an analysis of Medicaid data, KHN found that spending by the program on old and commonly used drugs increased by billions of dollars in 2016 compared to the previous year. In fact, the per-unit costs of dozens of generic medications doubled or even tripled during this period.

The costs of 67 generic and non-branded drugs cost Medicaid an extra $258 million in 2016. Medicaid spending on branded drugs, including nine branded drugs that have been available for decades, increased by as much as $3.2 billion.

The costs per unit do not include drug rebates provided by drug manufacturers, but the exact size of these discounts is a closely held proprietary secret.

The report highlighted a number of drugs whose prices increased dramatically in 2016, despite some being available as far back as half a century:

• The price of fluphenazine hydrochloride, used to treat schizophrenia and approved in 1988, rose an average of 347 percent, increasing Medicaid spending by an extra $8.5 million.

• The price of potassium phosphates, used to treat renal failure and was approved in the 1980s, rose 290 percent, costing Medicaid an extra $1.8 million.

• The price of naproxen sodium, the painkiller branded as Aleve that was approved in 1994, rose an average of 236 percent, costing Medicaid an extra $10 million.

• The price of Depo-Provera, used for birth control and approved in 1960, rose by more than 100 percent, costing Medicaid an extra $4.5 million.

In 2016, Medicaid also spent additional funds on a number of branded drugs, including $223 million extra on the arthritis drug Humira, $137 million on the cancer drug Herceptin, $117 million on the schizophrenia drug Latuda, $106 million on the arthritis drug Enbrel, and $102 million on the diabetes drug Humalog. Medicaid spending on the Epipen, the device used to treat serve allergic reactions whose price hikes sparked outrage last year, increased by $70 million.

While the cost of a drug normally declines when it goes generic, a host of factors can delay or undermine this trend. For example, patients may choose stay with the branded version and some states prevent pharmacists from automatically substituting generic for branded prescriptions.

More importantly, the price of generic drugs is related to the number of competitors producing the drug. Citing an analysis by the Food and Drug Administration, the KHN study notes that when there are five or more competitors, the price will drop to about a third of the original price; with two competitors, the price drops to about half the original cost; but when there is only one generic producer, the price only drops by 6 percent compared to the branded version.

Drugmakers have sought to limit competition by illegally colluding with “competitors” in order to keep drug prices artificially high. Since December of last year, 40 states have filed antitrust claims against six generic drug manufacturers—Citron Pharma, Heritage Pharmaceuticals, Myane Pharma, Teva Pharmaceuticals, Aurobindo Pharma, and Mylan Pharmaceuticals—alleging that the companies conspired to divide the market on an antibiotic and an oral diabetes medication, resulting in substantial price hikes.

Pharmaceutical companies also squelch generic competition by suing drugmakers that challenge their patent, or by entering into pay-for-delay deals in which generic manufacturers are compensated for delaying their entry as a generic competitor.

For example, in 2015, Concordia Pharmaceuticals and Par Pharmaceuticals settled charges with the Federal Trade Commission (FTC), which alleged that Concordia agreed to not sell generic versions of Kapvay, a treatment for Attention Deficit Hyperactivity Disorder (ADHD), in exchange for 35 to 50 percent of the net profits made by Par’s sales of the drug. That same year, Teva Pharmaceuticals settled a $1.2 billion lawsuit with the FTC, which claimed that the company it had acquired in 2012, Cephalon, had blocked generic competition against its narcolepsy drug Provigil.

A November 2014 perspective article in the New England Journal of Medicine(NEJM), also drawing on Medicaid data, found a number of similar sharp price hikes among generic drugs between November 2012 and November 2013, including a 5,330 percent increase in the price of doxycycline hyclate, a broad-based antibiotic available since 1967, a 3,780 percent increase in the price of clomipramine, an antidepressant, and a 2,850 percent increase in the price of captopril, used to treat hypertension and heart failure.

The NEJM article also noted a dramatic hike in the price of albendazole, a broad-spectrum antiparasitic medication used primarily to treat immigrants and refugees suffering from intestinal parasites and other maladies. Its price rose by more than 2,000 percent between 2010 and 2013. While the drug is off patent, no companies have sought to introduce generic versions because there is no profit incentive to do so.

This past May, the health care technology company Truveris issued a report that drug prices had increased by 8.8 percent in 2016 compared to the previous year—an increase that was 318 percent greater than the rate of inflation. It found that the previous three years have seen an average 10 percent increase in drug prices annually.

A report released this past February by Raymond James & Associates found that the drug industry raised the list prices of 2,353 prescription drugs at the start of 2017.

Anger at war, government complicity with terrorism erupts at Barcelona march

Alex Lantier 

The official march called Saturday after the August 17 terror attack in Barcelona turned into an unprecedented demonstration of public hostility to imperialist proxy wars in the Middle East that spawned the Islamist networks now carrying out terror attacks across Europe.

Spanish King Felipe VI, Prime Minister Mariano Rajoy and other top officials were greeted with booing, honking car horns, and shouts of “Your policies, our dead.” Others at the 500,000-strong march denounced Spanish weapons sales to Middle East countries like Saudi Arabia, shouting, “Felipe, if you want peace you don’t do weapons trafficking” and “Mariano, we want peace not weapons sales.” As the King and Rajoy marched, they were repeatedly met with catcalls and shouts of “Get out, get out.”

Rajoy’s conservative Popular Party (PP) government and regional authorities in Catalonia had called what they hoped would be a right-wing protest, denouncing terrorism and calling for peace and unity behind the police and the state. This backfired, however, as large numbers of protesters denounced war and official complicity with terrorism.

As the conservative Internet daily El Español confessed, pre-prepared, official “blue signs calling for peace were overwhelmed by others, that blamed the heads of state and of government for weapons trafficking, and connected the Spanish monarch to Saudi Arabia, a country accused of financing the Islamic State,” which carried out the Barcelona attack.

Protesters held pictures of King Felipe meeting Saudi King Salman bin Abdulaziz, or of former PP Prime Minister José Maria Aznar meeting with US President George Bush and British Prime Minister Tony Blair as they led the 2003 invasion of Iraq.

Protesters also cited evidence of state foreknowledge or even complicity in the attack, as Madrid-Barcelona rivalries grow before the scheduled October 1 Catalan independence referendum. One man, who told El Pais that “the King cannot come to a pacifist demonstration and sell weapons to Saudi Arabia,” added that “the government hid information about the terrorists to the Mossos d’Esquadra ,” the Catalan regional police.

On Sunday, Rajoy was compelled to respond to press reports of his debacle at the march. He refused to address any of the protesters’ criticisms, but arrogantly declared, “The insults of certain people, we didn’t listen to them,” and added: “Yesterday we were where we had to be and with those we had to be with, expressing our support for terror victims and showing our solidarity with the immense majority of sensible and moderate Catalans.” He called on Catalonia to abandon the scheduled October 1 independence referendum and “plans for rupture.”

Catalan officials, shocked by an outpouring of antiwar sentiment, tried to downplay it. “We should not exaggerate it,” Carles Puigdemont, the president of the Catalan Generalitat, said of the booing of the King, adding, “People expressed themselves in liberty, in conviviality, and in peace.”

Barcelona mayor Ada Colau, one of the so-called “Mayors of Change” backed by the Podemos party, refused to even discuss the growing antiwar sentiment. “Citizenship paves the way to the city,” she blandly declared, hailing Barcelona’s support for “conviviality, diversity, and peace.” She added, “In such a big demonstration, there is freedom of expression and many people come out with their own symbols and complementary questions.”

Colau’s statement is a cover-up of the political issues raised by the terror attack in her city. Fifteen people are dead and over 100 wounded in a horrific attack in Barcelona—the latest in a spate of Islamist attacks since 2015 that have killed hundreds and wounded thousands across Europe, from Paris to Brussels, Berlin and Manchester. Imperialist wars are not a supplementary issue to terrorism, but the driving force in the eruption of Islamist terror attacks in Europe, that must be halted if these attacks are to cease.

Washington and the European powers relied on Islamist militias in the 2011 war in Libya and then in the now six-year-old war in Syria, working with Persian Gulf oil sheikdoms like Saudi Arabia to plunge billions of dollars into Islamist terror networks. They recruited tens of thousands of fighters in Europe, the Middle East, and Asia to carry out shooting or bombing raids against regimes targeted by the NATO powers. In 2012, the Pentagon designated one proxy militia, Al Nusra, as a terrorist group and Al Qaeda affiliate, though it has continued to receive NATO support.

The events in Barcelona point to explosive class conflicts now building up in Spain and across Europe. Since 2015, the ruling class has continued to tolerate terror networks as a foreign policy tool, while using the attacks these networks carried out in Europe as a pretext to press for police-state measures—imposing a state of emergency in France, placing Brussels on lockdown, or putting armed law enforcement on the streets in Britain—based on the lie that Europe was waging a “war on terror.” This lie is now wearing thin, however.

Workers, facing high unemployment and waves of social cuts imposed by the financial aristocracy across Europe, are deeply hostile to the pro-war and antidemocratic policies of the political establishment. This opposition is all the more significant and explosive in that it brings the workers objectively into conflict with the entire ruling establishment, including its nominally “left” factions.

Pseudo-left parties like Podemos—which has sought to develop its influence inside the Spanish officer corps and has recruited General Julio Rodríguez Fernández, who commanded Spain’s forces in the 2011 Libya war—are deeply committed to the war. Podemos aggressively defended the sale of Spanish warships to Saudi Arabia, with Puerto Real mayor Antonio Romero claiming that weapons deals were critical to create jobs.

Asked about the booing of the king at the Barcelona protests, Podemos leader Pablo Iglesias was silent on the issue of war, saying, “People got out their banners, that is beautiful.”

Similarly, the Barcelona attack is unmasking the Catalan nationalists, who continue to attack Madrid in the run-up to the scheduled Catalan independence referendum. On Friday, Puigdemont gave an interview to the Financial Timesof London, attacking the Rajoy government and blaming the PP for preventing the Catalan authorities from stopping the attacks.

Puigdemont said, “We asked them not to play politics with security. Unfortunately, the Spanish government had other priorities.” Puigdemont cited potentially explosive charges from Catalan officials about, according to the Financial Times, “Madrid’s decision to block the hiring of new Catalan police officers this year and to drag its feet on granting the local force access to information from Europol.”

As of yet, no one has explained what role Madrid’s blocking of Catalan police access to international police databases played in allowing the attacks to proceed. Despite the Barcelona attack, Puigdemont asserted in the face of all evidence that Catalan police were doing a great job. “The Catalan police, even if they do not have all the tools they need . . . and are badly financed, have managed the crisis exceptionally well,” he told the Financial Times .

These remarks, coming after the Barcelona march, point to the political character of the forces seeking to set up an independent capitalist state in Catalonia. While they level explosive accusations against Madrid and have bitter rivalries over money and influence with the Spanish bourgeoisie, they are hostile to any appeal to working-class opposition to war and are firm defenders of their own police forces. They would prove deeply hostile to the working class, were they to come to power.

Testing the Trump-Modi Partnership

Chintamani Mahapatra

The Doklam standoff between India and China is a serious test case for the maturing India-US strategic partnership, which has endured leadership changes in recent years in New Delhi and Washington.

China has recently emerged as a nuisance for the US, its allies, and partners in the Asia Pacific region and beyond. The Chinese position, not just statements, on the North Korean missile threats, along with its role in Latin America, activities in the South China Sea, and  trade practices pose a big challenge to US President Donald Trump’s administration. China using its financial power to make smaller South Asian countries fall into debt-traps, and its grabbing of territories or maritime assets claimed by relatively smaller countries, such as Bhutan, Vietnam, Brunei, Malaysia, and the Philippines, are issues that need to be examined more closely by the Trump administration, and require multilateral solutions.   

While Trump abandoned his predecessor’s economic and strategic rebalancing policies towards the Asia Pacific for political reasons, growing Chinese misbehaviour and ambitions detrimental to regional peace and stability may compel a rethink on his part.

Chinese media and commentators clamouring for war against Indian troops in the disputed Doklam region, and even Chinese government spokespersons making offensive statements repeatedly are wake-up calls. Indian troops at Doklam and the Modi government in New Delhi have shown remarkable restraint. However given the China's island-grabbing activities in the South China Sea and frequent incursions along the Line of Actual Control (LAC), simply exercising restraint and calling for the peaceful resolution of differences through dialogue are highly inadequate.

As Beijing has recurrently reminded India about the outcome of the 1962 war, India should go beyond responding that war cannot be repeated. Drawing optimism from defeating Chinese soldiers during a 1967 incident is also not sufficient. While taking all precautions to protect India’s security and preserve Bhutan’s interests, New Delhi must strategise with Washington against possible bravado from Beijing.

In 1962, Prime Minister Jawaharlal Nehru emphasised 'non-alignment' more than seeking timely help from the US; and only when the situation became worse did Nehru write to the then US President John F Kennedy for direct intervention. Likewise, there are many in India who harp on about 'strategic autonomy' as a mantra and wrongly consider strategic coordination with the US as a loss of that autonomy.

It is worth emphasising that the US sought help from numerous countries, including Iran and Oman, before taking military action against the Taliban regime in Afghanistan post-9/11.

Following the joint statements announced during Modi’s meetings with former US President Barack Obama and, more recently, Trump, one expects that the India-US strategic partnership would be invoked before it is too late. Japan’s apparent declaration of support for India on the Doklam issue augurs well for Indian national interest. Similar support may soon come from Australia and Vietnam as well.

What is needed is the Trump administration’s unequivocal support to the Indian position on this issue. On political, ethical or moral grounds, it would not be arduous for Washington to back the Indian position.

First, China says Indian troops are in Chinese territory. It is actually a disputed region and not Chinese territory. Are there no Chinese troops in disputed regions within Pakistan, such as Pakistan Occupied Kashmir (POK)? Are there are no Chinese troops in disputed islands in South China Sea?

Second, it is also a question of the security of smaller countries. China has been threatening its smaller neighbours; in this case, Bhutan.

Third, Indian security would come under tremendous pressure if China succeeds in occupying Doklam. Thus the issue is not just moral, it is also of national security concern.

It is a common understanding that India needs to protect its own interests rather than depend on external forces to do so. Having said that, dependence must be distinguished from cooperation.

India and the US should be on the same page to prevent Chinese territory-grabbing exercises. The current situation is a test case to judge the relevance, scope and benefits of the India-US strategic partnership. The recent conversation between Modi and Trump on working together for peace and stability in the Indo-Pacific is a good beginning, but concrete and timely steps are imperative.

If the Chinese succeed in territorial aggrandisement, the so-called Asian century will finally amount to nothing but the rise of China's malevolent hegemony. The Indo-US strategic partnership is crucial to maintain a liberal, cooperative, prosperous and peaceful order in the Indo-Pacific. It would energise Japan, Vietnam, Australia, South Korea and ASEAN to join such efforts.      

Fifty Years of ASEAN: Between Assertion and Reinvention

Angshuman Choudhury

The Association of South East Asian Nations (ASEAN) hosted a series of annual multilateral forums between its member states and with other regional partners in Manila, Philippines, from 3-8 August 2017. These included the ASEAN Foreign Ministers’ Meeting (AMM), ASEAN Plus Three (APT) Summit, ASEAN Regional Forum (ARF), and the East Asia Summit (EAS) Foreign Ministers’ Meeting. The forums come at a historic time, with the regional organisation celebrating fifty years of existence.

The 46-page joint communiqué published on 5 August reflects two new trends within ASEAN’s post-2015 agenda: thematic expansion and structural consolidation. Both are significant in the geopolitical landscape of faltering regional alliances and emergent non-traditional, transnational threats.

These two trends suggest that the organisation is looking to broaden its role from a purely security community to one that facilitates people-centered development, and thus project itself as a ‘model of regionalism’. However, geopolitical realities and structural exigencies restrain ASEAN from realising its ambitious agenda.

Thematic Expansion

Post-2015, ASEAN has actively pushed the idea of ‘ASEAN community building’ forward under the following pillars: ASEAN Political Security Community (APSC), ASEAN Economic Community (AEC), and ASEAN Socio-Cultural Community (ASCC). Within these, five main thrust areas can be identified: regional peace and stability, connectivity, economic integration (including a free-trade regime), maritime security and cooperation, and people-centered development.

In addition, critical issue areas within the non-traditional domain like human rights, environmental protection, transnational crimes, counterterrorism, and rights of refugees and migrant workers have now begun featuring prominently in the core ASEAN agenda after years of passive observance. The organisation has also acknowledged the importance of harmonising regional goals with that of the UN’s 2030 Sustainable Development Goals (SDGs).

Structural Consolidation

In terms of structural consolidation, ASEAN’s attempt has been to deepen its position from within and without, through the dual norm of ‘one ASEAN identity’ and ‘ASEAN centrality’.

While ‘centrality’ denotes the organisation’s pivotal role in setting the Southeast Asian agenda, ‘one identity’ is a top-down design for regional consolidation. These are aimed at establishing regionalism as a durable solution to uncertainty and creating a fresh political imagination of a single Southeast Asian community that could perhaps share similar experiences in the future.

ASEAN has also begun to proactively assert itself as the leading multilateral forum in all of Asia Pacific. With its multiple extra-regional mechanisms, it hopes to engage with a broad set of actors who are key to the geopolitical and economic stability of Southeast Asia. This has put the organisation in a unique position to set the rules of the game for multilateral regionalism in the years to come.

How Feasible is the ASEAN Agenda?

The jury remains out on both ‘centrality’ and ‘one identity’. It may not ever be possible for ASEAN to create (and sustain) a single identity given the stark diversity in not just political and economic systems but also degree and quality of development among member states. The bigger question, however, is: does ASEAN even need a uniform ‘identity’ in order to succeed as a regional organisation?

At the same time, ASEAN’s core autonomy in the region – or ‘centrality’ – remains dubious. This year’s deliberations reflect this. On the one hand, ASEAN held its ground against relentless pressure from the US-Japan-South Korea axis by refusing to completely isolate North Korea over the latter’s expanding nuclear programme. On the other, however, it appears to have capitulated to Beijing’s agenda of preserving Chinese military dominance in the South China Sea (SCS) by delaying consensus on a legally-binding Code of Conduct (COC) for contested waters. This might have been an outcome of certain member states going soft on Beijing in return for greater Chinese investments in the region.

Thus, while ASEAN’s attempt to synchronise its intra-regional agenda with a broader extra-regional network (EAS, ARF, etc) is a pragmatic strategy in the face of shifting alliances, it is also a caveat in the organisation’s push towards geopolitical autonomy. This is because giving platform to bigger strategic actors could render its own agenda vulnerable to overreaching external interests.

ASEAN faces certain structural challenges in realising its agenda of people-centric development. The principle of non-interference in a member state’s ‘internal matters’ often comes in the way of community-oriented, rights-based intervention. The organisation’s incapacity in dealing with the Rohingya crisis in Myanmar and the treatment of gender minorities in Indonesia are cases-in-point.

In addition, the ASEAN Intergovernmental Commission of Human Rights’ (AICHR) limited mandate has permitted certain members to suspend their citizens’ fundamental rights with impunity. The refusal of some states to grant full-spectrum rights to migrant workers has also held the organisation back from finalising a long-pending, legally-binding instrument for the protection of their rights.

Looking Ahead

ASEAN needs to link top-down and bottom-up development. Member states must ensure that the benefits of regional economic integration, particularly a free-trade regime, percolate down to the community-level. This must be done through a model of decentralised and participatory governance, which is agnostic to individual political setups. At the same time, microeconomic agendas – like poverty alleviation and job creation – must be accompanied by a pursuit of social justice and equitable distribution.

Member states must also ensure that national security achieved through regional consolidation translates into individual security. Affirmative attention must be paid to vulnerable communities that are often left out of state-centric discourses on protection. Most importantly, ASEAN needs to recognise its own pluralism, rather than totalising the regional demography through political constructs.

Lying About Citizenship: Australian Politicians Before The High Court

Binoy Kampmark

It was nothing short of fabulous.  Before the public, the political lie is deemed an imperative, instinctively cultured to repel anything that might appear, let alone resemble, truth.  Never, whatever you do in political garb, reveal the game, convey the reality, even if power is only held on trust.  Those idiots (the voters, that is) won’t know.

Before the judicial bench, however, the same figures find themselves on the horns of a dilemma.  Pull the wig over those judicial eyes – or risk perjuring yourself?  With that in mind, the story about how the Nationals Senator Matt Canavan became an Italian citizen, making him ineligible as a sitting member of Parliament according to the Australian Constitution, was instructive.

The original version of the story was a stumbling search for how he acquired that form of Italian citizenship.  When pressed on the point, Canavan blamed his mother, who seemed to resemble an unmonitored demiurge intent on creating a universe of mischief.  (Naturally, the son had no idea, revealing his degree of competence, or the extent of pure ignorance that every parliamentarian should be proud of.)

Even then, cracks started to appear in the fabricated story.  Discussions about his citizenship and maternal suggestions in that direction, were being had around the family table prior to the sneaky visit to the Italian consulate in Brisbane.

The directions hearing in the High Court saw a change of heart. Mum was left out of it.  Legal counsel representing Senator Canavan argued that he had been an Italian citizen since 1983 (not 2006, as Canavan had claimed, courtesy of his mother’s intervention), due to a change in Italian law. This rendered Canavan a citizen by descent, rather than birth.

This could only have one meaning, claimed legal counsel representing Canavan: section 44 of the Australian constitution would not apply.  To read the section any other way, claimed David Bennett, QC, would result in a “ridiculous” interpretation, one that would also disqualify up to half the population from sitting in Parliament. A grim, and truly undemocratic prospect indeed.

Canavan was not the only one to revise his shoddy account before the High Court directions hearings.  Having given the world a version of events suggesting diligence, enthusiasm and a spirit of inquiry into whether he had either Indian or British citizenship, One Nation Senator Malcolm Roberts revealed that he had only filled in his renunciation documents after his election to parliament.

Left with the mountainous task of defending Roberts, a post-truth pedlar who insists that the Murdoch empire offers papers of unimpeachable balance, Senior Counsel Robert Newlinds was knotted and bound.  He duly submitted to Chief Justice Susan Kiefel that the British authorities were the ones who had been confusing – confusing, that is, on when renunciation of UK citizenship had been accepted.

Roberts is a particular problematic case, given his lukewarm efforts during the renunciation process.  For him, email efforts sufficed (of course, he was very insistent when sending them): the first directed to the British Home Office to renounce British citizenship; the second to again reiterate that same point.  (The number of emails has, over time, altered.)

He then claimed, without more ado, that he had documents showing the same.  He was not a citizen, either of India, or the UK, and he had the paperwork to prove it, with a UK acknowledgement on December 5 last year that he had successfully achieved his goal.

Not that this paperwork was ever adduced before an ever sceptical audience.  As Roberts’ spokesman, Sean Black, explained to Fairfax media in rather telling fashion, the senator “is choosing to believe that he was never British.” A belief to move mountains.

Newlinds, despite casting a weary eye over the awful mess his client had found himself in, sensed some wriggle room.  The UK Home Office subsequent to Roberts’ election sent him a form to accept the renunciation.  But what did it mean?  For the desperate advocate, it was unclear whether the British authorities were “accepting the renunciation by the form, or the earlier email.”  Pigs, at this point, were well and truly airborne.

Confidence continues to be unduly high with the Attorney-General, George Brandis, and Prime Minister, Malcolm Turnbull.  This is a constitutional disaster that will be resolved sensibly, without fuss.  But to do so will require the High Court judges to overturn a conservative reading of section 44 that has been in place for decades.

Turnbull remains “very, very confident that our members who have been caught up in this will be held by the court to be eligible to sit in the Parliament and therefore eligible to be ministers.”  This absurdist drama is far from over, and will continue in October.  In the meantime, the numbers of the purportedly ineligible representatives will simply grow.  More discoveries about hidden citizenships are to be had.

A Sinister War On Our Right To Hold Cash

F. William Engdahl 

An operation that began as a seemingly obscure academic discussion three years ago is now becoming a full-blown propaganda campaign by some of the most powerful institutions in the industrialized world. This is what rightly should be termed the War on Cash. Like the War on Terror, the War on Cancer or the War on Drugs, its true agenda is sinister and opaque. If we are foolish enough to swallow the propaganda for complete elimination of cash in favor of pure digital bank money, we can pretty much kiss our remaining autonomy and privacy goodbye. George Orwell’s 1984 will be here on steroids.

Let me be clear. Here we discuss not various block-chain digital technologies, so-called crypto-currencies. We are not addressing private payment systems such as China’s WeChat. Nor do we discuss e-banking or use of bank credit cards such as Visa or Master Card or others. These are of an entirely different quality from the goal of the ongoing sinister war on cash. They are all private services not state.

What we are discussing is a plot, and it is a plot, by leading central banks, select governments, the International Monetary Fund in collusion with major international banks to force citizens—in other words, us!—to give up holding cash or using it to pay for purchases. Instead we would be forced to use digital bank credits. The difference, subtle though it may at first seem, is huge. As in India following the mad Modi US-inspired war on cash late in 2016, citizens would forever lose their personal freedom to decide how to pay or their privacy in terms of money. If I want to buy a car and pay cash to avoid bank interest charges, I cannot. My bank will limit the amount of digital money I can withdraw on any given day. If I want to stay in a nice hotel to celebrate a special day and pay cash for reasons of privacy, not possible. But this is just the surface.

Visa joins the war

This July, Visa International rolled out what it calls “The Visa Cashless Challenge.” With select buzz words about how technology has transformed global commerce, Visa announced a program to pay selected small restaurant owners in the USA if they agree to refuse to accept cash from their customers but only credit cards. The official Visa website announces, “Up to $500,000 in awards. 50 eligible food service owners. 100% cashless quest.” Now for a mammoth company such as Visa with annual revenues in the $15 billion range, a paltry $500,000 is chump change. Obviously they believe it will advance use of Visa cards in a market that until now prefers cash—the small family restaurant.

The Visa “challenge” to achieve what it calls the “100% cashless quest” is no casual will-o’-the-wisp. It is part of a very thought-through strategy of not only Visa, but also the European Central Bank, the Bank of England, the International Monetary Fund and the Reserve Bank of India to name just a few.

IMF on Boiling Frogs

In March this year the International Monetary Fund in Washington issued a Working Paper on what they call “de-cashing.” The paper recommends that, “going completely cashless should be phased in steps.” It notes the fact that there already exist “initial and largely uncontested steps, such as the phasing out of large denomination bills, the placement of ceilings on cash transactions, and the reporting of cash moves across the borders. Further steps could include creating economic incentives to reduce the use of cash in transactions, simplifying the opening and use of transferrable deposits, and further computerizing the financial system.”

In France since 2015 the limit a person may pay in cash to a business is a mere €1000 “to tackle money laundering and tax evasion.” Moreover, any deposit or withdrawal of cash from a bank account in excess of €10,000 in a month will automatically be reported to Tracfin, a unit of the French government charged with combating money laundering, “largely uncontested steps” and very ominous portents.

The IMF paper further adds as argument for eliminating cash that “de-cashing should improve tax collection by reducing tax evasion.” Said with other words, if you are forced to use only digital money transfers from a bank, the governments of virtually every OECD country today have legal access to the bank data of their citizens.

In April, a month after the IMF paper on de-cashing, the Brussels EU Commission released a statement that declared,

“Payments in cash are widely used in the financing of terrorist activities. In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold.”

Even in Switzerland, as a result of relentless campaigns by Washington, their legendary bank secrecy has been severely compromised under the fallacious argument it hinders financing of terrorist organizations. A glance at recent European press headlines about attacks from Barcelona to Munich to London to Charlottesville exposes this argument as a sham.

Today in the EU, as further result of Washington pressure, under the Foreign Account Tax Compliance Act (FATCA) banks outside the USA where US citizens hold a deposit are forced to file yearly reports on the assets in those accounts to the Financial Crimes Enforcement Network of the US Treasury. Conveniently for the US as the major emerging tax haven, the US Government has refused, despite it being specified in the Act, to join FACTA itself.

In 2016 the European Central Bank discontinued issuing €500 bills arguing it would hinder organized crime and terrorism, a poor joke to be sure, as if the sophisticated networks of organized crime depend on paper currencies. In the US, leading economists such as former Harvard President Larry Summers advocate eliminating the $100 bill for the same alleged reason.

$10 limit?

The real aim of the war on cash however was outlined in a Wall Street Journal OpEd by Harvard economist and former chief economist at the IMF, Kenneth Rogoff. Rogoff argues that there should be a drastic reduction in the Federal Reserve’s issuance of cash. He calls for all bills above the $10 bill to be removed from circulation, thereby forcing people and businesses to depend on digital or electronic payments solely. He repeats the bogus mantra that his plan would reduce money-laundering, thereby reduce crime while at the same time exposing tax cheats.

However the hidden agenda in this War on Cash is confiscation of our money in the next, inevitable banking crisis, whether in the EU member countries, the United States or developing countries like India.

Already several central banks have employed a policy of negative interest rates alleging, falsely, that this is necessary to stimulate growth following the 2008 financial and banking crisis. In addition to the European Central Bank, the Bank of Japan, the Danish National Bank adhere to this bizarre policy. However, their ability to lower interest rates to member banks even more is constrained as long as cash is plentiful.

Here the above cited IMF document lets the proverbial cat out of the sack. It states,

“In particular, the negative interest rate policy becomes a feasible option for monetary policy if savings in physical currency are discouraged and substantially reduced. With de-cashing, most money would be stored in the banking system, and, therefore, would be easily affected by negative rates, which could encourage consumer spending…”

That’s because your bank will begin to charge you for the “service” of allowing you to park your money with them where they can use it to make more money. To avoid that, we are told, we would spend like there’s no tomorrow. Obviously, this argument is fake.

As German economist Richard Werner points out, negative rates raise banks’ costs of doing business.

“The banks respond by passing on this cost to their customers. Due to the already zero deposit rates, this means banks will raise their lending rates.”

As Werner further notes,

“In countries where a negative interest rate policy has been introduced, such as Denmark or Switzerland, the empirical finding is that it is not effective in stimulating the economy. Quite the opposite. This is because negative rates are imposed by the central bank on the banks – not the borrowing public.

He points out that the negative interest rate policy of the ECB is aimed at destroying the functioning, traditionally conservative EU savings banks such as the German Sparkassen and Volksbanken in favor of covertly bailing out the giant and financially corrupt mega-banks such as Deutsche Bank, HSBC, Societe Generale of France, Royal Bank of Scotland, Alpha Bank of Greece, or Banca Monte dei Paschi di Siena in Italy and many others. The President of the ECB, Mario Draghi is a former partner of the mega bank, Goldman Sachs.

Why Now?

The relevant question is why now, suddenly the urgency of pushing for elimination of cash on the part of central banks and institutions such as the IMF? The drum roll for abolishing cash began markedly following the January 2016 Davos, Switzerland World Economic Summit where the western world’s leading government figures and central bankers and multinational corporations were gathered. The propaganda offensive for the current War on Cash offensive began immediately after the Davos talks.

Several months later, in November, 2016, guided by experts from USAID and, yes, Visa, the Indian government of Narenda Modi announced the immediate demonetization or forced removal of all 500 Rupee (US$8) and 1,000 Rupee (US$16) banknotes on the recommendation of the Reserve Bank of India. The Modi government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.

Notably, the Indian Parliament recently made a follow-up study of the effects of the Modi war on cash. The Parliamentary Committee on Demonetization report documented that not a single stated objective was met. No major black money was found and Demonetization had no effect on terror funding, the reasons given by the Government to implement such a drastic policy. The report noted that while India’s central bank was allegedly attacking black money via demonetization, the serious illegal money in offshore tax havens was simply recycled back into India, “laundered” via Foreign Direct Investment by the criminal or corporate groups legally in a practice known as “Round Tripping.”

Yet the Parliament’s report detailed that the real Indian economy was dramatically hit. Industrial Production in April declined by a shocking 10.3 percent over the previous month as thousands of small businesses dependent on cash went under. Major Indian media have reportedly been warned by the Modi government not to publicize the Parliament report.

If we connect the dots on all this, it becomes clearer that the war on cash is a war on our individual freedom and degrees of freedom in our lives. Forcing our cash to become digital is the next step towards confiscation by the governments of the EU or USA or wherever the next major banking crisis such as in 2007-2008 erupts.

In late July this year Estonia as rotating presidency of the EU issued a proposal backed by Germany that would allow EU national regulators to “temporarily” stop people from withdrawing their funds from a troubled bank before depositors were able to create a bank “run.” The EU precedent was already set in Cyprus and in Greece where the government blocked cash withdrawals beyond tiny daily amounts.

As veteran US bank analyst Christopher Whelan points out in a recent analysis of the failure of the EU authorities to effectively clean up their banking mess since the 2008 financial crisis, “the idea that the banking public – who generally fall well-below the maximum deposit insurance limit – would ever be denied access to cash virtually ensures that deposit runs and wider contagion will occur in Europe next time a depository institution gets into trouble.” Whelan points out that nine years after the 2008 crisis, EU banks remain in horrendous condition. “There remains nearly €1 trillion in bad loans within the European banking system. This represents 6.7% of the EU economy. That’s huge. He points out that banks’ bad loans as share of GDP for US and Japan banks are 1.7 and 1.6 percent respectively.

As governments, whether in the EU or in India or elsewhere refuse to rein in fraudulent practices of its largest banks, forcing people to eliminate use of cash and keep all their liquidity in digital deposits with state regulated banks, sets the stage for the state to confiscate those assets when they declare the next emergency. If we are foolish enough to permit this scam to pass unchallenged perhaps we deserve to lose our vestige of financial autonomy. Fortunately, popular resistance against elimination of cash in countries like Germany is massive. Germans recall the days of the 1920s Weimar Republic and hyperinflation as the 1931 banking crises that led to the Third Reich. The IMF approach is that of the Chinese proverb on boiling frogs slowly. But human beings are not frogs, or?