Dubious Partnership: The US and Saudi Arabia

Mel Gurtov

In recent months Donald Trump has shown no hesitation to comment critically on political developments in Iran, Pakistan, Venezuela, and North Korea. He supported protests in Iran against “the brutal and corrupt Iranian regime.” He deplored the many years of US military aid to Pakistan, for which “they have given us nothing but lies & deceit, thinking of our leaders as fools. . . . No more!” His criticisms of the Maduro government in Venezuela were accompanied by the threat to use the “military option,” reminiscent of what Trump had once said when talking about Mexico. And of course his personal insults directed at North Korea’s Kim Jong-un are now legendary.

Such interference is now taken for granted, for in Trump’s world, relying on diplomacy and abiding by the principle of noninterference in others’ affairs have no currency in Washington. Of course trying to destabilize other countries, even to the point of seeking regime change, has been part and parcel of US foreign policy for a long time. The difference now may be the constancy of Trump’s interference, and the undiplomatic language he uses.

How to Win Friends and Influence People

Trump reserves his harshest tweets for governments he dislikes. When it comes to friends like Israel, Russia, and Saudi Arabia, the operating principle is “hands-off.” They are allowed to use every trick in the book to buy influence in Washington: gaining special access to decision makers, investing in the US economy and offering investment opportunities in their own country, hiring former US officials to lobby, inviting American opinion leaders to lavish conferences, putting on opulent displays of affection when top US officials visit. These folks know Americans will bite at a chance for profit and attention, and pay back with access and influence. Russia’s successful hookups with Trump’s campaign and administration officials in order to end US sanctions are only the latest and most glaring examples of a longstanding problem of influence-buying. They haven’t succeeded so far, but the effort has literally cost them peanuts.

Saudi Arabia has played the influence game just as aggressively as the Russians, and for much longer. Saudi money has effectively lobbied in Washington for many years, often relying on former members of Congress. The Saudis also seek to influence US politics by funding NGOs (e.g., the Clinton Foundation), think tanks, law firms, social media, and even political action committees. Saudi investors, including members of the royal family, may have as much as a half-trillion dollars invested in US real estate, the stock market, and US treasury bills. At the time of Trump’s visit in May the Saudi leadership committed to another $40 billion in infrastructure investments, though whether or not that will actually happen is another matter.

The payoff for the Saudis is arms acquisitions that have usually put Saudi Arabia first on the US arms export list. The $110 billion arms deal announced while Trump was in Saudi Arabia came on top of billions more weapons sold during the Obama years—and consistent US political support since before World War II of the royal family’s authoritarian rule. The Saudis have also bought continued US support of the Saudi air war in Yemen—a humanitarian disaster that probably amounts to war crimes. For the US, cultivating Saudi Arabia yields not only low oil prices and a reliable arms customers but also an easing of Arab pressure on Israel and leadership in Sunni confrontation of Shiite Iran and Iran’s partner, Hezbollah.

Now comes Crown Prince Mohammad bin-Salman’s coup, or purge if you like, to solidify his power and eliminate rivals to the throne. We cannot take seriously the proclaimed reasons for Salman’s purge—in order to modernize the country and fight corruption. To Saudi leaders, modernization means dictating the content and timing of social and economic change, a method almost sure to fail. Women may now drive, the cultural scene may look more permissive, and education may open up a bit. But such changes fall well short of removing the ruling family’s control of the courts and the press. Likewise fighting corruption: It clearly doesn’t apply to King Salman and family, who run a blatantly corrupt system that controls many key businesses, nor to the crown prince, who thinks nothing of spending hundreds of millions of dollars on yachts and chateaux while ordering the detention of 320 wealthy citizens. Conflicts of interest are rampant, and ignored. No wonder the Trump family adores these people.

Trump’s Man in Riyadh

Donald Trump was all in on Salman’s coup, tweeting his support: “I have great confidence in King Salman and the Crown Prince of Saudi Arabia, they know exactly what they are doing. Some of those they are harshly treating have been ‘milking’ their country for years!” (Michael Wolff’s Fire and Fury has Trump and Jared Kushner boasting, “We’ve put our man on top!”) Was it merely coincidental that Jared Kushner had just visited Saudi Arabia (from October 25-28), and reportedly met with Trump’s buddy, the crown prince? (The trip, Kushner’s third to Saudi Arabia in 2017, was unannounced, supposedly linked to his Middle East peace efforts. But perhaps meetings with other Middle East leaders were merely a cover, since among those purged was a frequent critic of Trump, the billionaire Prince Alwaleed Bin Talal, who once called Trump a “disgrace” to America, after Alwaleed had twice bailed out Trump financially.

It’s all about Iran.

For the Saudis, as for Trump and Kushner, Iran is the main target of the current Saudi-US honeymoon. The Kushner-led regional “peace plan” he supposedly leads—one that is short on substance and even shorter on qualified people (they’re all businessmen) to sell it—is riveted on Iran’s “aggression.” In Lebanon, where Hezbollah is entrenched, Iran seems to be the proxy target. Might Iran have been correct in accusing Kushner of being responsible for the surprise (actually, forced) resignation of Lebanon’s prime minister the following weekend—a resignation announced in Riyadh, where the prime minister was apparently held against his will because he was considered too soft on Hezbollah? The Saudis are ratcheting up the pressure on Lebanon, telling its citizens to leave and dangling the prospect of kicking out around a half-million Lebanese workers in Saudi Arabia who send home some $3 billion annually in remittances.

Salman’s moves against Qatar, which Trump (but not Tillerson), condoned, and now against Hezbollah and Iran, will inevitably further complicate the US position in the Middle East, where “stability” is already so far out of reach. As one astute commentator argues, the Washington-Riyadh axis against Iran “seems to mistake presidential and princely preference and mutual agreement for statecraft and implementation.” But that critique merely suggests that Saudi Arabia be “less aggressive” in its hostility to Iran. More creative statecraft would involve a Saudi diplomatic initiative on Iran to moderate their rivalry in Yemen, Lebanon, and Syria. But now, with Trump on board in place of Obama, who in fact urged just such a Saudi initiative, diplomacy is out the window. Iranian nationalism is on the rise even among the educated anticlerical class. Trump and Salman have succeeded in generating “widespread support for the [government’s] hard-line view that the United States and Riyadh cannot be trusted and that Iran is a strong and capable state . . . .”

If Michael Wolff’s Fire and Fury is accurate, Donald Trump believes that by getting close to the Saudis, he can resolve the Israel-Palestine conflict. Fantasy; it’s the Saudis who have Trump just where they want him. They have to be as satisfied as Russia over what their money has bought: a US Middle East policy that relies on continued arms sales, confrontation with Iran in company with Israel, and acceptance of massive human rights violations in Yemen—in short, further chaos in the Middle East. Fareed Zakaria is correct to conclude: “With Trump so firmly supporting the Saudi strategy, the United States could find itself dragged further into the deepening Middle East morass.” That morass might well include war with Iran, the common obsession of Trump and his national security team. Better to jettison Saudi Arabia; like Pakistan, it is a dubious partner that promises endless trouble for the United States and no help in dealing with terrorism.

Students and staff to bear brunt of latest Australian university funding cut

Mike Head 

Ever-larger class sizes, closures of courses and campuses, thousands more staff job cuts and accelerated pro-business restructuring. These are some of the already known impacts of the latest multi-billion funding cuts to Australia’s public universities, which the federal government announced just a week before Christmas.

The Liberal-National Coalition government was unable to get a $2.8 billion package of cost-cutting over four years through the Senate, because Labor, Greens and right-wing populist senators feared the intense hostility of students, staff and the wider population and refused to support it. So, instead, the government used the December 18 release of its mid-year budget review to impose $2.2 billion in cutbacks by decree.

The most immediately damaging measure is a two-year freeze on funding for undergraduate enrolments. Universities Australia, the peak management body, estimates this will mean nearly 10,000 student places going unfunded in 2018.

Then, from 2020, new “performance targets” will make any funding increases depend on universities “realigning” their course offerings to be more in tune with the requirements of the corporate elite. Universities must do more to meet “the expectations of employers,” Education Minister Simon Birmingham declared.

Despite the political posturing by opposition and “crossbench” politicians, this is part of a protracted bipartisan assault on students and staff, and the basic right to higher education. The latest package is on top of funding reductions exceeding $4 billion since 2011, mostly inflicted by the previous Labor government, which was kept in office by the Greens.

Over the same period, universities increasingly have been transformed into corporate entities as a result of that Labor government’s market-driven “education revolution,” which compelled universities to compete with each other to attract students to courses tailored to satisfy business needs.

The December 18 announcement also directly hit students by lowering the threshold at which graduates must start repaying the massive debts incurred during their studies under the government’s HECS/HELP fee deferment scheme. The threshold, calculated in terms of annual income, will be reduced from $52,000 to $45,000. Many more young people, on relatively low wages, will be forced to commence paying off the loans, adding to the financial stresses produced particularly by sky-high rents and housing prices.

By announcing the cuts so late, the government gave the universities no time to change their enrolment and other plans for 2018. Universities Australia chief executive Belinda Robinson said this week: “The cuts were announced on 18 December and took effect from 1 January. Many universities had already made detailed plans by that time on how many places they would offer in 2018.”

Robinson said some universities would be forced to offer fewer student places “to avoid a budget black hole.” Others would have to dig into critical maintenance funds or shut down facilities and outreach programs.

Global ratings agency Moody’s also warned last week that the funding freeze would create greater funding volatility and risks for the universities, which borrow funds on the financial markets to build new facilities. Moody’s said regional and expanding universities would be most affected.

Seven regional universities this week listed programs that could be shelved as a result of the freeze. They included some facilities in working class areas, such as a new University of Southern Queensland health sciences campus at Ipswich, west of Brisbane, and University of the Sunshine Coast campuses at Hervey Bay, Caboolture, Petrie and the Sunshine Coast University Hospital.

Sweeping cutbacks, as yet unspecified, are threatened across the country. In an ominous email to all staff members on December 19, Western Sydney University (WSU) vice-chancellor Barney Glover said: “Preliminary modelling by the University’s Finance and Resources Division estimates that the impact of the changes would be approximately $5.7 million in 2018. More detailed analysis is being conducted to obtain a fuller assessment of the impacts on the University.”

Students and staff at WSU, like every other university, are already reeling from the effects of constant rounds of pro-market restructuring that have slashed administrative and academic jobs, sent class sizes soaring, reduced face-to-face teaching and consultation, and driven up staff casualisation rates.

Labor, the Greens and the National Tertiary Education Union (NTEU), the main trade union covering universities, criticised the December 18 bombshell but they are primarily responsible for enforcing the corporate transformation of higher education over the past decade.

Labor’s shadow education minister, Tanya Plibersek, said: “Billions of dollars’ worth of cuts to universities mean a higher-cost education for students or a poorer-quality education or probably both.” Yet the latest cuts just intensify those imposed by the 2007–13 Labor government. Labor lifted caps on enrolments, but only to produce a new “competitive” education “marketplace”—in reality, a business-driven regime.

NTEU national president Jeannie Rea complained that the government had drawn up its cuts “behind closed doors and without public debate” or “discussion with universities, their staff and students.” The NTEU spent most of 2017 strenuously stifling or shutting down industrial action. It pushed through new enterprise bargaining agreements (EBAs) at individual universities—11 so far—to assist managements to prepare to make the cuts being demanded.

The EBA provisions vary from place to place, precisely to help each university survive in the “marketplace” at the cost of rival universities. But the agreements have common features, designed to allow managements to impose closures, redundancies and more onerous workloads, while cutting real wages.

At James Cook University in northern Queensland, for example, the NTEU reached an agreement with the management in November that increased the “redeployment period” of most professional staff from 15 to 20 weeks. In other words, the management was given a green light for further retrenchments, as long as it gives affected staff a few more weeks to apply for any alternative positions that might be offered.

NTEU Queensland division secretary Michael McNally called the EBA “a win for all staff at James Cook University,” yet it also delivers a real pay cut for the next five years. There is an increase of 8.6 percent over that period—or about 1.7 percent per year—far below the rising cost of living.

The NTEU’s main concern is to retain its position, together with the Labor Party, as the policing agency for the underlying corporate program, with which the union entirely agrees. In her media statement last month, Jeannie Rae accused the government of conducting a “crude money-saving exercise” that “flies in the face of the objectives” of the previous Labor government’s “demand driven funding model.”

Rae said the NTEU had “proposed the need for a better planned and managed allocation” for funding student places through “Public Accountability Agreements.” These agreements, outlined in NTEU budget submissions, would require student enrolments to be determined by the “national interest,” that is essentially in the interests of the capitalist ruling class.

Once universities resume their full operations next month, students and staff alike will face ever-more intolerable conditions, driven by this big business agenda.

Australian power workers vote for industrial action

Terry Cook 

More than 93 percent of the 2,800 workers employed at Ausgrid, the partly privatised urban electricity distribution network in New South Wales (NSW), have voted for industrial action over new enterprise agreements (EBAs). Ausgrid operates the distribution network providing power in Sydney, Newcastle, the Central Coast and the Hunter Valley.

Like the NSW rail workers, who have voted to strike on January 29, the Ausgrid workers face an escalating corporate-government offensive, after years of job cuts, workload increases and declining real wages. However, the unions are intent on preventing any genuine campaign to fight for decent wages and conditions.

The current EBAs expired in December 2014, when Ausgrid was still fully owned by the NSW state government. Since then, a controlling interest in the company has been sold to a consortium of superannuation funds, led by former trade union bureaucrats, who are demanding stepped-up productivity.

But the unions involved—the Electrical Trades Unions (ETU), United Services Union (USU), Community and Public Sector Union (CPSU) and Professionals Australia (PA)— dragged out negotiations, effectively imposing a wage freeze on workers. They have only held a ballot for industrial action now to contain the widespread anger that is reflected in the overwhelming vote to strike.

ETU organiser Mark Buttigieg told the media last week the Ausgrid workers “were fed up with the inaction” and the voting results showed “a high degree of frustration pent up.” Yet he insisted that the workers did not want to take action, saying: “We still prefer to have a negotiated outcome.”

Buttigieg’s comments are a warning that the unions are working behind the scenes to reach a “negotiated outcome” and call off any strike action. Such a deal will inevitably be another sell-out paving the way for another round of “productivity increases” and “restructuring” and further cuts to jobs and conditions.

Ausgrid CEO Richard Gross told the Australian Financial Review this week that the company had achieved in-principle agreement with the unions on “virtually all of our proposal.” He boasted: “The new agreement would realise greater productivity and ensure success and sustainability in the new energy market.”

The result of the strike ballot was announced on January 10, but the unions have delayed any action by the Ausgrid workers until after a meeting of delegates on January 31. The limited options that workers were given to vote on included eight-hour work stoppages and 30 different types of work bans, such as refusing to do overtime, callouts or work on the light rail network.

Already, since 2014, Ausgrid has eliminated nearly 2,000 jobs and driven up productivity by an estimated 43 to 62 percent, all with the assistance of the unions, which have facilitated redundancies and stifled any resistance.

In return for further speed-up, the four unions are seeking a 3 percent annual pay increase over three years and changes to the company’s classification system, which underrates skills and makes promotions difficult. Ausgrid is offering to raise wages by just 7 percent over three years—a further real pay cut—with a one-off $1,000 payment as a sop.

At the same time, the company wants a two-tier workforce, with new employees receiving lower rates of pay, thus putting continuous downward pressure on all wages. Meanwhile, Ausgrid has awarded its executives salary rises averaging 5.3 percent a year and annual bonuses averaging more than $50,000 each in 2014, 2015 and 2016.

In 2016, the Liberal-National state government sold off the network via a 99-year lease of 50.4 percent of Ausgrid for $16 billion to an Australian Super and IFM Investors superannuation consortium. The government retained the remaining shares but could offload them at any time.

Former Australian Council of Trade Union (ACTU) secretary and key Labor minister Greg Combet is deputy chair of IFM Investors. Another ex-ACTU secretary, David Oliver, is deputy chair of Australian Super, whose board includes current union leaders Paul Bastian (Australian Manufacturing Workers Union) and Daniel Walton (Australian Workers Unions).

In other words, the Ausgrid workers not only confront their own unions, but an employer led by present and former union bureaucrats, who direct its demands for greater cost-cutting and higher profits.

In 2016, the state government also privatised the regional electricity distributer Endeavour Energy and the state’s high-voltage network company Transgrid. Rural provider Essential Energy remains state-owned for now, but it has been subjected to severe restructuring, including the slashing of more than 1,300 jobs.

The power unions facilitated the privatisation and job cuts. They worked to prevent any unified response by power workers and kept them divided on an enterprise-by-enterprise basis. All attempts by workers to take action were systematically blocked by the unions, which supported the Fair Work industrial laws that ban virtually all action by workers.

The overriding concern of the unions has been to maintain their role as labour brokers, bargaining away workers’ jobs, conditions and wages.

When, for example, Essential Energy workers moved in April 2016 to strike to oppose cuts to working conditions and jobs, the unions, without consulting the rank-and-file, called off the action at the eleventh hour, enforcing a directive by the federal government’s industrial tribunal, the Fair Work Commission.

Opposition by workers was also diverted into dead-end protests and parliamentary channels, such as pleas to the right-wing Christian Democratic Party (CDP) to block legislation enabling the privatisations or to secure phoney “job protection” clauses. A deal brokered by the CDP and the unions allowed the government to proceed unhindered.

Above all, the unions urged workers to vote for yet another pro-business Labor government in the 2015 state elections, on the basis of the lie that Labor will defend their interests. In reality, Labor began the privatisations before it was thrown out of office in 2011. Once the 2015 election was over, state Labor leader Luke Foley flagged his support for privatisation, declaring “private and not-for-profit sectors should play a significant role in the delivery of our public services.”

Ausgrid workers need to draw lessons from past bitter experience and break decisively with the unions, which always defend the private profit system from which the officials derive their privileged positions and life styles.

Any fight for wages, jobs and conditions necessarily involves a political struggle against the entire establishment—including Coalition, Labor and the Greens—that will stop at nothing, including using the police and the courts, to suppress the eruption of a movement of the working class.

Ausgrid workers should take matters into their own hands and establish independent rank-and-file committees to organise the campaign and turn out to other sections of workers—across the steel, mining, transport and engineering industries—in Australia and internationally facing the destruction of jobs and conditions.

This struggle can only succeed to the extent that it is guided by a socialist perspective, that is, the fight for a workers’ government that will place the banks and basic industries in public ownership and under the democratic control of the working class.

UK, France boost military, intelligence ties at Sandhurst summit

Robert Stevens & Alex Lantier

On Thursday, UK Prime Minister Theresa May and French President Emmanuel Macron held a summit meeting at the UK military officers training academy, Sandhurst. The meeting was aimed at boosting UK-French military and intelligence ties, in line with the strategy developed in the 2010 Lancaster House Treaty, amid growing tensions with the Trump administration and inside NATO, and the crisis caused by Britain’s exit from the European Union (EU).

They agreed on a series of reactionary measures, including stepped-up military spending, joint spying operations, and attacks on immigrants trying to reach Britain from the French port of Calais. They pledged to intensify cooperation on nuclear weapons programmes, aircraft carriers, and naval deployments to the Pacific and Indian Oceans and the Caribbean sea. Also agreed were provisions for draconian Internet censorship.

The Financial Times noted that Sandhurst was chosen as a venue since it “underlined a two-decade old defence pact between Britain and France.” Highlighting the strategic character of the meeting, the heads of the UK’s main domestic and international intelligence agencies—MI5, MI6 and General Communications Headquarters (GCHQ)—and of their French equivalents, the General Directorates of External Security and Internal Security (DGSE, DGSI), all attended.

Pointing to “an increasingly unstable and uncertain world,” the summit communiqué declared that the “Lancaster House Treaty is the bedrock of our relationship. Since 2010 we have improved our collective capabilities and seen unprecedented levels of integration between our armed forces, intelligence agencies and diplomatic and development authorities.”

It added, “There is no situation in which we could envisage a circumstance where the vital interests of either the United Kingdom or France could be threatened without the vital interests of the other being also threatened.” As vital interests are those that states will go to war to protect, this essentially means that Britain and France are building a separate, smaller alliance inside NATO. France’s Le Point magazine expressed satisfaction at this “simple principle outlined already in 1992,” after the dissolution of the Soviet Union and the reunification of Germany.

The foreign policy compact document contained bullet points outlining the positions of British and French imperialism on key global flashpoints, in particular those where Washington is threatening to trigger major wars. It commits them to defending the 2015 Iranian nuclear peace deal, which the Trump administration is signalling it will scrap, amid growing US war threats against Iran. It called for “meaningful and unconditional dialogue” with North Korea, which Washington is threatening with nuclear annihilation.

In an apparent concession to the UK by Macron—who began his presidency by inviting Russian President Vladimir Putin to France and calling for improved relations with Moscow—the compact document sharply attacked Russia.

It declared that the UK and France “share a common assessment of Russia’s more assertive foreign and defence policy, … strategic intimidation, including the use of disinformation, malicious cyber activity, and political subversion.” It denounced Russia’s annexation of Crimea and endorsed the Minsk peace deal in Ukraine negotiated by Berlin, Paris, Kiev and Moscow: “Until Russia complies with its Minsk obligations, economic sanctions [on Moscow] cannot be lifted.”

The two countries agreed to a pair of overseas interventions to illustrate their alliance. Britain is to send three helicopters and 50 to 60 support staff to assist thousands of French soldiers fighting a neo-colonial war in Africa’s Sahel region. For its part, France will send more troops to NATO’s “enhanced Forward Presence” in 2019, “as part of the UK-led battlegroup in Estonia, building on the successful joint deployment in 2017 . ” The UK currently has 800 soldiers in Estonia.

In addition, May stated that a combined UK-French expeditionary force would be ready to deploy up to 10,000 troops “quickly and effectively to face any threat” by 2020.

Both countries agree on the necessity to clamp down on democratic rights as they build up their war machines, with Internet censorship at the top of their agenda. Under the guise of fighting “terrorism” and “criminals,” the summit was presented with a report containing proposals to “ensure the automation of detection and deletion of illegal content within 1-2 hours of upload,” and “prevent its dissemination…”

London and Paris also haggled over the financing of the repression of immigrants in Calais, where France accepted responsibility for policing Britain’s border along the Channel tunnel in the 2003 Le Touquet treaty. At Sandhurst, the two countries agreed to joint action to “increase the number of illegal migrants who are returned to their own country.”

Under pressure from Macron, May agreed to “support France in its provision of accommodation in facilities located outside the Calais and Dunkirk areas, such as Reception and Assessment Centres,” and to increase Britain’s payment to France for policing the border to €50 million.

Macron hypocritically declared at the summit’s press conference that the new treaty on migrants would ensure a “more humane approach.” In fact, what is being implemented is a speeding up of the deportation process, with the time to process migrants to be reduced from six months to one month for adults, and 25 days for children. The UK refused to specify how many migrants it would accept into the UK.

The summit pointed to both the escalating collapse of the international political framework that existed in the era of US imperialism’s world hegemony, and the turn to repression and anti-immigrant hate-mongering as the imperialist powers again prepare for war. Fundamental differences separate the major European powers from Washington over countries in the Middle East and Asia, where they have major economic and strategic interests, and where US policy could provoke a major regional or world war.

At the same time, the EU is rapidly disintegrating, particularly since the Brexit vote. It is significant that Paris organised a high-level military summit with London amid rising concern over its relations with Germany, Europe’s leading power, after the crisis unleashed by the September 2017 German elections. The Grand Coalition (Christian Democratic Union-Social Democratic Party) government that favoured close ties with Macron suffered a humiliating loss of votes, and with Berlin still unable to form a government, Paris must fear that a more hostile government may emerge in Berlin.

Both the Leave and Remain factions of the British bourgeoisie supported closer ties with France. In a pre-summit editorial, the Remain-supporting Financial Times wrote effusively of the previous decade of military and intelligence cooperation but warned, “In the era of Brexit, however, these bonds will be re-examined.” Given the UK’s historically close ties with the US, it wrote, “There is deep scepticism in Britain about integrating the country’s armed forces with those of Europe.”

Macron made no move whatsoever to support Britain in its contentious Brexit talks with the EU, however, pointing out that the EU, and not France, is negotiating Brexit. Asked why he opposed including financial services in any EU-UK free trade agreement, he said, “I am here neither to punish nor to reward. I want to make sure that the single market is preserved because that is very much the heart of the EU.”

If Britain wanted full continuing access to the EU’s single market, Macron added, “The choice is up to Britain: it’s not my choice—but they can have no differentiated access to financial services. … it means that you need to contribute to the budget and acknowledge European jurisdiction”.

Britain would not be able to pick and chose a Canada-style trade deal that would allow access to the single market, he insisted. “There should be no hypocrisy in this respect, or it would not work and we would destroy the single market.”

Pentagon unveils strategy for military confrontation with Russia and China

Bill Van Auken

The Trump administration’s defense secretary, former Marine Corps Gen. James Mattis, rolled out a new National Defense Strategy Friday that signals open preparations by US imperialism for direct military confrontation with nuclear-armed Russia and China.

Speaking at Johns Hopkins University in Maryland, Mattis made clear that the strategy, the first such document to be issued by the Pentagon in roughly a decade, represented an historic shift from the ostensible justification for US global militarism for nearly two decades: the so-called war on terrorism.

“Great power competition—not terrorism—is now the primary focus of US national security,” Mattis said in his speech, which accompanied the release of an 11-page declassified document outlining the National Defense Strategy in broad terms. A lengthier classified version was submitted to the US Congress, which includes the Pentagon’s detailed proposals for a massive increase in military spending.

Much of the document’s language echoed terms used in the National Security Strategy document unveiled last month in a fascistic speech delivered by President Donald Trump. Mattis insisted that the US was facing “growing threat from revisionist powers as different as China and Russia, nations that seek to create a world consistent with their authoritarian models.”

The defense strategy goes on to accuse China of seeking “Indo-Pacific regional hegemony in the near-term and displacement of the United States to achieve global preeminence in the future.”

Russia, it charges, is attempting to achieve “veto authority over nations on its periphery in terms of their governmental, economic, and diplomatic decisions, to shatter the North Atlantic Treaty Organization and change European and Middle East security and economic structures to its favor.”

“China is a strategic competitor using predatory economics to intimidate its neighbors while militarizing features in the South China Sea,” it states. “Russia has violated the borders of nearby nations and pursues veto power over the economic, diplomatic, and security decisions of its neighbors.”

In what appeared to be a threat directed against both Russia and China, Mattis warned, “If you challenge us, it will be your longest and worst day.”

Both Moscow and Beijing issued statements condemning the US defense strategy. A Chinese spokesman denounced the document as a return to a “Cold War mentality.” Russia’s Foreign Minister Sergei Lavrov, meanwhile, told a United Nations press conference: “It is regrettable that instead of having a normal dialog, instead of using the basis of international law, the US is indeed striving to prove their leadership through such confrontational strategies and concepts.” A government spokesman in Moscow characterized the document as “imperialistic.”

Like the National Security Strategy released last month, the defense strategy also singles out North Korea and Iran as “rogue regimes,” charging them with destabilizing regions through their “pursuit of nuclear weapons or sponsorship of terrorism.” It accuses Tehran of “competing with its neighbors, asserting an arc of influence and instability while vying for regional hegemony.”

The document calls for the preparation for war across what it describes as “three key regions”: the Indo-Pacific, Europe, and the Middle East. The document also makes brief references to Latin America and Africa, asserting the necessity of US imperialism striving for hegemony on both continents. It makes clear that these continents are arenas for the global “great power” struggle that forms the core of the strategy, asserting that a key aim in Africa is to “limit the malign influence of non-African powers.”

What emerges clearly from the Pentagon document is a vision of US imperialism besieged on all sides and in mortal danger of losing global dominance. It reflects the thinking among the cabal of retired and active-duty generals that dominate the Trump administration’s foreign policy that the past 16 years of unending wars in the Middle East and Central Asia have failed to further US strategic interests, creating a series of debacles, while grinding down the US military.

“Today, we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding,” the document states. “We are facing increased global disorder, characterized by decline in the long-standing rules-based international order—creating a security environment more complex and volatile than any we have experienced in recent memory. Inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security.”

The Pentagon’s aim, according to the defense strategy, is to ensure that the US remains “the preeminent military power in the world” able to “ensure the balance of power remains in our favor,” “advance an international order that is most conducive to our security and prosperity” and “preserve access to markets.”

The thrust of the document is a demand for a vast buildup of the American war machine, which already spends more than the next eight countries combined, including nearly triple the military spending of China and roughly eight times the amount spent by Russia.

A failure to implement the huge military spending increases that the Pentagon is demanding—the Trump White House has called for a $54 billion increase in the military budget, while Congressional leaders have suggested an even bigger hike—will result “in decreasing U.S. global influence, eroding cohesion among allies and partners, and reduced access to markets that will contribute to a decline in our prosperity and standard of living,” the declassified summary of the defense strategy warns.

Despite having siphoned trillions of dollars out of the US economy to pay for the past 16 years of war, Mattis and the defense strategy present the American military as an institution that has been virtually starved of resources, unable to meet “readiness, procurement, and modernization requirements.”

The overriding objective in terms of modernization is the buildup of the US “nuclear triad”—Washington’s array of intercontinental ballistic missiles, submarine-launched ballistic missiles and strategic bombers, capable of destroying life on the planet many times over.

The document said the Pentagon will seek to upgrade all aspects of its nuclear war-fighting apparatus, “including nuclear command, control, and communications, and supporting infrastructure.” It added that “Modernization of the nuclear force includes developing options to counter competitors’ coercive strategies, predicated on the threatened use of nuclear or strategic non-nuclear attacks.” In other words, the US military is prepared to launch a nuclear war in response to a conventional or cyberattack.

Tellingly, the Pentagon document uses the words “lethal” and “lethality” 15 times to describe the aims of Mattis and his fellow generals in regard to their proposed military buildup. Clearly, what is being prepared is a level of mass killing far beyond the bloodbaths carried out in Iraq, Afghanistan, Libya, Syria, Yemen and elsewhere.

In Mattis’s speech there was a strong element of resentment toward the civilian government and its constitutional control over the military. He described US troops being compelled to “stoically carry a ‘success at any cost’ attitude, as they worked tirelessly to accomplish the mission with inadequate and misaligned resources simply because the Congress could not maintain regular order.”

Mattis warned that the war plans outlined in the document will require “sustained investment by the American people,” noting that “past generations” had been compelled to make “harsher sacrifices.”

These new “sacrifices” will take the form of savage cuts to essential social services, including the gutting of Social Security, Medicare and Medicaid, with the transfer of resources to the military, the arms industry and the financial oligarchy.

The National Defense Strategy released Friday constitutes a grave warning to working people in the US and throughout the world. Driven by the crisis of their system, America’s capitalist ruling class and its military are preparing for a world war fought with nuclear weapons.

US budget charade causes government shutdown

Eric London

The annual back-and-forth budget charade between Democrats and Republicans dragged on late into the night on Friday when Senate Republicans failed to secure enough Democratic votes to pass a four-week federal funding extension. As a result, what has been called a “government shutdown” went into effect at 12:01 AM Saturday morning.

Talks between congressional Democrats, Republicans and President Trump will continue this weekend over protection for 800,000 recipients of the Deferred Action for Childhood Arrivals (DACA) program, increased spending for border militarization and deportation roundup squads, disaster relief, and funding for most federal agencies. Whatever deal emerges from the kabuki theater in Washington will shift the entire framework of American politics further to the right.

Knowing that their so-called “continuing resolution” was doomed to fail in the Senate, House Republicans cynically added an extension of the Child Health Insurance Program (CHIP) while excluding DACA protection in order to blame Democrats for prioritizing “illegal immigrants” over US citizen children. Five Senate Democrats voted for the Republican measure, including Doug Jones, whose victory in last month’s Alabama Senate race was called “a triumph for decency and common sense” by the New York Times editorial board.

Politico reported that Democrats made a counterproposal Friday that included an additional $50 billion in military funding in exchange for protection for DACA recipients as well as already agreed-upon increases for border militarization. Republicans called this right-wing proposal a “nonstarter.”

Late Friday afternoon, Senate Minority Leader Charles Schumer (Democrat of New York) visited the White House for a parley with Trump, his old friend and benefactor. Schumer said he “made some progress” with Trump during the meeting. Trump called the session an “excellent preliminary meeting” in which he and the Democratic Senate leader were “working on solutions for security and our great military.”

Whatever is taking place behind closed doors, the American people will never hear the half of it. The Democratic demands likely center around foreign policy and increased surveillance of social media, two themes that are technically not related to the budget debate. Republican Senate Majority Leader Mitch McConnell spoke some truth when he said of the Republican proposal, “Its content is bipartisan; there are no provisions that my Democratic friends oppose.”

Schumer and the Democrats want to shut down government operations over the weekend when the impact on Wall Street will be negligible in order to posture as defenders of DACA beneficiaries. A CBS poll released this week showed that 87 percent of Americans want a pathway to citizenship for these young people.

The phony character of the Democratic Party’s position is revealed by the fact that US stock indexes rose Friday, with the Nasdaq and S&P 500 reaching new records even as the likelihood of a deal declined throughout the day. Hank Smith, co-chief investment officer at Haverford Trust, said, “I would characterize a shutdown as just the kind of political news that the market has demonstrated, over the past year, a willingness to ignore.” In other words, there is no question that the two parties will reach an agreement favorable to Wall Street.

In contrast to the presentation in the bourgeois press, many functions of the US government do not shut down during a budget impasse. Immigration agents and border patrol will continue to round up families for deportation, American warplanes will carry out their sorties over Middle Eastern countries, and the National Security Agency will continue its mass surveillance of the American and world population.

However, some 850,000 federal workers, many of whom are mid- and low-level domestic agency staff, as well as janitors, cafeteria workers and other service employees will stop receiving paychecks. These workers do not always receive back pay for furloughs and many face economic devastation as a result of even a brief shutdown.

Over 60 percent of Centers for Disease Control employees will be furloughed in the midst of the worst flu epidemic in years. Members of Congress, however, will be paid for days the government is technically closed down.

The short-term continuing resolution would have been the fourth extension of the government funding deadline since September. At each stage, the Democrats have failed to secure protection for DACA recipients, who are spending the weekend in a profound state of anxiety. One DACA recipient posted on a popular Facebook page for young immigrants that she has “lost sleep over this issue with DACA and the votes and Congress etc… Here we are stressing about something that is totally out of our hands. What really matters is our happiness. I’m tired of feeling sick, tired of losing sleep over this whole situation.”

The Democrats have already made clear that they are willing to support construction of a border wall and massive expenditures for militarizing the border as part of a deal that includes extensions for DACA recipients. Last week, Bernie Sanders declared, “I don't think there’s anybody who disagrees that we need strong border security. If the president wants to work with us to make sure we have strong border security, let’s do that.”

The assurances by Sanders and the Democrats of support for added security comes as videos published this week by the pro-immigrant No More Deaths organization showed border guards pouring out over 3,500 gallons of water left by rights groups in the harsh borderlands desert. In the last 20 years, up to 27,000 immigrants have died of dehydration, starvation, heat stroke and hypothermia while attempting to escape the violence and poverty in Mexico and Central America.

With Indo-Pacific tensions rising, Japan and Australia strengthen military ties

Mike Head

Japan and Australia will step up their military partnership, including by holding their first joint exercises involving jet fighters, following a remarkable one-day visit to Tokyo by Australian Prime Minister Malcolm Turnbull yesterday.

In the space of 24 hours, Japanese Prime Minister Shinzo Abe personally escorted Turnbull to a military base to watch drills by elite special forces troops, took him into a meeting of the National Security Council (NSC), Japan’s top-level war cabinet, and hosted a state dinner for him. The pair also staged a full media conference and issued a joint statement.

Bloomberg described Abe’s accompaniment of Turnbull to the Narashimo base outside Tokyo as “a highly unusual honour for a foreign leader.” At the base, the two prime ministers posed for photographs alongside Australian-made armoured troop carriers and a Patriot missile-defence system, part of a US network designed to give the US and its allies the offensive capacity to launch missile attacks and block any retaliation.

A source from Abe’s office said Turnbull was invited to the NSC because it was the “control tower of security policy.” Abe established the US-style NSC in December 2013 to centralise foreign and military policy under the prime minister, while its work is kept hidden from the public by anti-democratic state secrecy laws.

In the context of the tensions being ratcheted up by the Trump administration on the Korean Peninsula, and Washington’s threats of trade war and confrontation against China, Turnbull’s visit constitutes another warning that all the major powers in the Indo-Pacific region are preparing for war.

The feting of Turnbull is a measure of Abe’s desire to consummate a closer alliance with Australia, both to counter China’s growing influence and assist his drive to remilitarise Japan, including by changing the country’s post-World War II pacifist constitution by 2020. Abe also regards Australia as a linchpin in cementing the “Quadrilateral”—a military alliance between the two countries plus the US and India, the region’s supposed “democratic” powers—directed against China.

For Tokyo, the “Quad” is a critical military and ideological platform for combating China’s “One Belt, One Road” project across Eurasia and pursuing Japan’s own ambitions to reassert its status as a global power. In 2007, Australia’s Howard government accepted Abe’s invitation to form the “Quad,” but that decision was reversed in 2008 by the Rudd Labor government, which sought to balance somewhat between the US, Australian capitalism’s predominant military ally, and China, its largest export market. Last November, during President Donald Trump’s Asian tour, Turnbull agreed to resume the formation.

Contrary to expectations generated in the media, Turnbull and Abe failed to finalise a “Reciprocal Access Agreement” that would give the Japanese military access to Australian bases, and vice-versa. Such a pact, if concluded, would be the first of its kind for Japan, which has a Status of Forces Agreement allowing tens of thousands of US troops to be permanently stationed in the country, but does not envisage Japanese forces visiting the US.

Japan’s military would be able to train, and test weapons, on Australia’s sprawling military bases and intensify joint war games and information-sharing. No explanation was given for the delay in concluding the agreement. At the media conference, Turnbull said it was a “complex matter.” In their communiqué, the two prime ministers “underscored the importance” of such a pact and “directed all relevant ministers to conclude the negotiations as early as [is] feasible.”

In the interim, Turnbull and Abe announced new military exercises in Japan later this year, the first to be held between the two air forces, as part of an intensified relationship. According to the joint statement: “The two leaders directed their respective ministers of defence to pursue even deeper and broader defence co-operation in 2018, including exercises, operations, capacity building, navy, army and air force visits, and further co-operation on defence equipment.”

Turnbull was at pains to deflect journalists’ questions that the strengthening of ties was directed against China, but no other conclusion can be drawn. A commentary earlier this month in China’s Global Times, a state-controlled tabloid affiliated with the People’s Daily, criticised the Japan-Australia security relationship as a “threat to peace.”

Moreover, both Abe and Turnbull aligned themselves with the Trump administration in further ratcheting up the threats against North Korea, knowing that any US-led war on the Korean Peninsula would menace neighbouring China. At a gathering of US allies in Vancouver, US Secretary of State Rex Tillerson had just reiterated Washington’s military “option.”

Turnbull said he agreed with Tillerson that “military options should remain on the table.” Like Tillerson, both Turnbull and Abe provocatively accused Pyongyang of using its agreement with South Korea to participate in next month’s Winter Olympics as a screen behind which to further develop weapons.

“Despite the ongoing North-South talks, North Korea is continuing to develop nuclear and missile weapons and the situation is actually worsening,” Abe said at the media conference. “There can be no stability in the Asia-Pacific without denuclearisation.”

Turnbull insisted that the North had a history of misleading the world. “They have a long habit of ratcheting up militarisation and then going into a lull for a while, trying to persuade people they are changing their ways, changing nothing, and then ratcheting up again,” he said.

This again stands reality on its head. Since the 1994, successive US administrations have reneged on deals struck with the North for it to denuclearise in return for the lifting of punishing sanctions on the country. Cynically, Washington has exploited the North’s supposed “nuclear threat” as a pretext to build up US military forces in the region, encircling China.

Japan-Australia military ties have grown since 2007, when Abe signed a joint declaration on security cooperation with one of Turnbull’s predecessors, John Howard. In 2014, Turnbull’s immediate predecessor, Tony Abbott, joined Abe in declaring a “special strategic partnership.”

The deepening of military linkages accords with the Trump administration’s “America First” policy of requiring US allies to expand, and pay for, their own military capacities and joint networks.

At the same time, Abe and Turnbull also sought to breathe life back into the Trans-Pacific Partnership (TPP), an economic bloc that Trump dumped 12 months ago.

Turnbull indicated that a reconfigured TPP could be signed by trade ministers at a meeting in Chile in March, even if some other countries, such as Canada and Mexico, pulled out of the deal. “Prime Minister Abe and I are personally committed to having this deal signed and sealed by March,” Turnbull told a business lunch in Tokyo.

Turnbull said the US would be encouraged to join in the future. Nevertheless, the bid to revive the TPP points to real fears in Japanese and Australian ruling circles that Washington’s aggressive protectionism and threats of trade war measures, especially against China, could plunge the region and the world into a depression.

On both the military and economic fronts, the decay of America’s post-war economic domination and its ever-greater resort to militarism are turning the Indo-Pacific into a tinderbox.

Macron prepares draconian new French anti-immigrant law

Athiyan Silva

Last week, French Prime Minister Edouard Philippe announced that his government will present a final bill on refugees and immigrants in the Council of Ministers in February. The bill represents a drastic assault on the right to asylum, effectively handing police authorities the power to deport refugees en masse without any serious hearing whatsoever.

According to the “Presentation of the provisions of the asylum-immigration bill,” the bill cuts the deadline for the French Office for the Protection of Refugees and Stateless Persons (OFPRA) to examine an asylum application from 120 to 90 days. Crucially, it reduces the time for asylum seekers to appeal a negative decision to the National Asylum Court (CNDA) from 30 to 15 days. It raises the administrative detention for verification of the right to asylum from 16 to 24 hours, and allows a maximum detention of not 45, but 90 or even 115 days.

The new bill creates virtually impossible conditions for asylum seekers and undocumented immigrants trying to get the proper visas or minimum employment in order to live. Above all, with police prefectures taking on average a month to schedule hearings on appeals to the CNDA, the bill would effectively eliminate any recourse to the frequent initial negative decision from the OFPRA.

The bill does not allocate any further resources for the prefectures to process appeals to the CNDA inside the two-week deadline fixed by the bill. Police forces, among which there is broad support for the neo-fascist National Front (FN), are being issued a blank cheque to deport any refugee who, as is often the case, receives an initial negative decision from the OFPRA.

The purpose of the bill is politically criminal: it is to ensure that countless people will be forcibly deported from France back to war-torn and poverty-stricken Middle Eastern or African countries such as Afghanistan or Libya. Afghan Minister for refugees and repatriation, Sayed Hussain Alemi Balkhi, has told the media it was initially expected that over a “hundred thousand Afghans were to be deported from the European countries in 2017.”

Last month, French Interior Minister Gérard Collomb, in an interview with RTL Radio, stated that the situation with the growing numbers of refugees in Paris is explosive. “In Germany, about 300,000 people have been denied asylum, they want to come to France. Are we taking them all? No.” In order to block the flow of refugees, France, and all the major European countries, are preparing a wave of repressive laws paving the way for indiscriminate mass deportations.

President Emmanuel Macron’s attack on the democratic right to asylum is part of an assault on refugees waged by the entire European Union (EU). After decades of imperialist wars in Africa and the Middle East provoked the greatest refugee crisis since the end of World War II, with over 60 million people displaced, the EU is keeping them from coming to Europe by trampling their democratic rights.

EU countries, including France, Germany, Austria, Italy, Greece and Belgium, have reintroduced border controls, even inside the Schengen zone where border controls were initially eliminated. The European Border and Coast Guard Agency (Frontex) intensified its border control on land and sea, deploying ships, aircraft, helicopters, high tech equipment and 1500 officials. At the same time, since 2014, 15,486 refugees have drowned at sea.

The European bourgeoisie is also working with the reactionary ruling classes in the Middle East and Africa to build a network of concentration camps in which hundreds of thousands of people are trapped.

Last month, Amnesty International published a report detailing how the EU is spending millions of euros to build up a network of detention camps in Libya, in which refugees are beaten, tortured, sexually assaulted, sold into slavery, and even murdered. Italian foreign minister Angelino Alfano met the UN-sponsored Libyan government’s Prime Minister Fayez al-Sarraj in Tripoli last December to work out an agreement for Italian warships to aid the Libyan coastguard in blocking refugees in thenMediterranean Sea. Refugees are then sent back to these camps.

The EU Commission has already paid €100 million to the Sudanese government to mount army patrols on the borders with Libya and Egypt, and keep refugees from Somalia, Ethiopia and Eritrea on African soil. Sudanese forces are notorious for human rights violations.

Macron is also intensifying the war in former French colonies in Africa, with a 4,000-strong French force fighting in Ivory Coast, Mali, Chad, Niger, Burkina Faso and across the entire Sahel region, alongside a 12,000-strong UN peacekeeping force as part of the “war on terror.” These French imperialist interventions will create millions more refugees.

These developments point above all to the political bankruptcy of arguments advanced last year, during the presidential elections, that workers and youth should vote for Macron against FN candidate Marine Le Pen in order to defend immigrants’ rights. Countless forces, from Jean-Luc Mélenchon’s Unsubmissive France to the New Anti-capitalist Party, accommodated themselves to claims that Macron was a “lesser evil” than Le Pen.

These forces now stand exposed as political enemies of immigrants’ rights, as Macron and his government intensify attacks against refugees and immigrants, seeking support from far-right forces, including the FN.

Last Tuesday, Macron visited the northern coastal city Calais, where thousands of refugees are living in inhuman conditions in the “Jungle camp,” as they attempt to travel on to Britain. He insisted that refugees should not come to France, and threatened those in Calais: “To stay in Calais and build makeshift shelters and even set up squats is a dead end. The border is closed and Calais can no longer be a destination for migrants.”

Deadly flu season likely to worsen internationally

Shelley Connor

The 2017-2018 influenza season has been one of the deadliest and most costly in recent memory, claiming numerous lives across the United States and the United Kingdom. While January typically represents the peak of the influenza season, epidemiologists predict that the epidemic will worsen in both the United States and the United Kingdom in the upcoming weeks.

This prediction rings particularly dire. Influenza has spread throughout the continental United States for the first time since the CDC began tracking the spread of flu, straining hospitals to the breaking point. A state of emergency was declared in Alabama. In California, hospitals have been forced to set up tents and clear out storage areas to make room for the increase in patients. In school districts in many localities classes have been called off due to staff shortages and student sickness.

“I think the simplest way to describe it is that flu is everywhere in the US right now,” said Dr. Dan Jernigan, director of the Centers for Disease Control’s (CDC) Influenza Division, during a briefing on the flu. “There’s lots of flu in lots of places.”

The CDC has reported 22.7 hospitalizations per 100,000 people in the US for the week ending on January 6. At least 20 pediatric deaths associated with the flu have been recorded. Adults, including the vulnerable over-65 demographic, are not tracked by the agency, although individual hospitals have reported numerous adult deaths.

San Diego County, California, reported a record number of flu deaths Wednesday, with the county’s Health and Human Services Agency reporting 52 more people have died from the flu. This brings the total deaths this flu season to an all-time high of 142.

The unprecedented virulence of this season’s flu owes itself to the nature of the strain responsible. Influenza A, H3N2, is more severe and more likely to cause complications in vulnerable populations than Influenza B. Immunization against the strain is also more difficult.

The rapid spread of such a severe strain of the flu has strained hospital staff and medical supplies nationwide. Shortages of antivirals such as Tamiflu have been reported in multiple states. In Birmingham, Alabama, Tamiflu supplies had largely been exhausted by the middle of last week. Lake County, Illinois had similar shortages. In California, doctors’ offices have reported shortages of Tamiflu as well as flu testing kits. Pharmacies in the state have also reported shortages of flu vaccine.

In the wake of Hurricane Maria, intravenous saline bags—manufactured by Baxter International in Puerto Rico—have been in short supply in the US. That shortage has been compounded by the demands of flu complications. As the World Socialist Web Site reported earlier this week, nurses at Massachusetts General Hospital have been forced to use stomach tubes to pump Gatorade into dehydrated patients, using the same method to administer medications that would normally be given intravenously.

The outbreak has not been limited to North America. In the United Kingdom, the flu has claimed 130 lives, more than three times the number of flu deaths last year. Most of the deaths have occurred in the over-65 age group.

The Guardian reports that 598 people were admitted to hospital with flu last week. Of that number, 198 required treatment on intensive care or high dependency units. Seven locations in the UK have reported flu cases in excess of 80 per 100,000 people in the past week: York claimed the highest rate of flu cases, at 109.29 cases per 100,000. Currently, a staggering 8.3 million UK residents are reportedly suffering from symptoms of the flu.

Public Health England (PHE) officials have predicted that the flu will reach epidemic status within two weeks. “In terms of hospital admission, this is the most significant flu season since the winter of 2010/11 and the preceding pandemic year of 2009, although it is not an epidemic,” PHE’s medical director, Paul Cosford, told the Guardian .

This prediction has alarming implications. According to National Health Services (NHS) reports, up to 100,000 people have been forced to wait for 30 minutes or more in the back of an ambulance due to Accident and Emergency (A&E) department overcrowding. As has happened in the United States, patients have reported having to lie in corridors for hours waiting to see a doctor. At least 20 people have died in East England waiting for ambulances to arrive.

Speaking with the Guardian, Saffron Cordery, director of policy and strategy at NHS Providers, said that despite “a very slight easing of pressures last week, NHS trusts are still working at or beyond full stretch, resulting—at times—in care for patients that falls short of what trusts and their staff want to provide. The worst of winter may be yet to come.”

In the cases of both the United States and the United Kingdom, the flu outbreak’s severity is intimately tied to health budget cuts. As the WSWS reported earlier this week, “The CDC estimates total yearly expenditures for flu outbreaks, in both direct and indirect medical costs, amounting to $87.1 billion. But last year’s budget provided a miserly $57 million for influenza pandemic planning. The Health and Human Services Department has also taken down the flu.gov website, which represented a cabinet-level organization dedicated to helping Americans prepare for the flu.”

In the United Kingdom, the NHS managers have reported that general practitioners have been pressured to use a cheaper, less effective flu vaccine, although a vaccine better suited to the strains spreading through the country exists.

This January marks the 100th anniversary of the beginning of the deadly 1918 flu pandemic, which spread across the globe—even to remote Pacific Islands and to Antarctica—and claimed between 20 million and 40 million lives. As a result of the influenza outbreak, the average life span in the US was depressed by 10 years. The so-called Spanish Flu had a mortality rate of 2.5 percent; by comparison, previous flu epidemics had a mortality rate of less than 0.1 percent. In 1918, the death rates for 15- to 34-year-olds of influenza and pneumonia were 20 times higher than in previous years.

The 1918 pandemic came on the heels of World War I, when social conditions left many people across the world poorly nourished. In the face of the Spanish Flu pandemic, the burgeoning public health disciplines rallied with governmental support, despite the primitive level of medicine at the time compared to today’s medical technology.

One hundred years on, however, public health is under attack in the advanced capitalist countries. Mike Osterholm, the director of the Center for Infectious Disease Research and Policy at the University of Minnesota, told the NBC, “Each year, the health care system gets a thinner and thinner veneer of preparedness. It takes less and less impact for a health care system to go from routine to crisis.”

As Osterholm has written previously, infectious disease currently threatens more American lives than terrorist attacks. Nevertheless, the US government currently is poised to pass a budget funding the military at the expense of numerous social programs, including public health. In addition, programs such as Medicaid, Medicare, and Children’s Health Insurance Program (CHIP), which cover millions of Americans, are under outright threat.

Last year’s Zika pandemic underscored the vulnerability of a health system limping along on a shoestring budget. In its wake, US lawmakers should have responded with rational planning and budgeting for future outbreaks of infectious disease. Disease prediction models had forecast serious flu outbreaks in both the US and the UK as early as September. Yet due to budget constraints and poor governmental planning, hospitals in both countries are overwhelmed with one of the worst flu outbreaks in 100 years.

Sharp fall in bitcoin price a sign of growing financial turbulence

Nick Beams

The plunge in the value of the cryptocurrency bitcoin over two days this week to below $10,000—half the level reached in December—and the fall in other cryptocurrencies is another sign of growing turbulence throughout the financial markets.

The sudden fall came a week after significant tremors rippled through bond markets, prompting predictions that the rise in yields could be the start of a bear market, reversing a more than 30-year trend.

Some observers described the situation in the bitcoin market as one of “panic” as investors sought to exit.

Other cryptocurrencies were caught in the downdraft, with Ethereum falling from a high of $1,400 to just over $800 and the Ripple XRP coin halving its value from $2.02 to 93 cents. The founder of Ripple was reported to have suffered a paper loss of $44 billion since the coin reached an all-time high at the beginning of the month.

The value of bitcoin has steadied since Wednesday’s sharp decline and moved back to over $11,000, still well below the level of $20,000 reached last month. But it could well plunge again.

The immediate cause of the sell-off appears to have been the news that South Korea and China were moving to introduce restrictions on cryptocurrency trading, if not banning it altogether.

In South Korea, the third largest market, Finance Minister Kim Dong-Yeon said shutting down cryptocurrency exchanges was an option. In an interview, he said he hoped things would not go that far, but irrational speculation needed rational regulation.

China, which has moved in this direction, is reported to be considering a further clampdown on cryptocurrency trading, particularly with regard to online platforms and mobile phone apps that offer exchange-like services.

A note by the British-based organisation Capital Economics, cited by the Guardian, said bitcoin’s latest price fall suggested the “bubble is bursting.” Yet, with the price still ten times higher than it was a year ago, it had a long way to go. The note claimed that when the bubble did collapse it would not have a major impact because the amount of money involved was relatively small at $200 billion.

It should be recalled, however, that in 2007, the then chairman of the US Federal Reserve, Ben Bernanke, said the emerging sub-prime crisis would not be a problem for broader markets because it only involved investments of $50 billion.

Capital Economics said the bitcoin price surge had been driven by the belief that it would continue to rise in value. In other words, the speculation was a kind of pyramid scheme in which the price continued to rise as long as money kept flowing in.

Such a description could equally well be applied to the current surge in stock markets, which saw the Dow Jones reach 26,000 this week after passing through the 25,000 mark a few days before.

The rise and rise in the markets is beginning to bring warnings that it is preparing the conditions for a collapse, with far-reaching consequences.

Writing in the Wall Street Journal this week, Martin Feldstein, chairman of the Council of Economic Advisers under the Reagan administration, warned that stocks were headed for a fall, with the escalation of stock prices far in excess of the rise in profits. The price/earnings ratio for the S&P 500 index was now 26.8, higher than at any time in the 100 years before 1998 and 70 percent higher than its historical average, he noted.

With an expected increase in interest rates from the historically low levels set by the US Federal Reserve, share prices were also likely to return to their previous norms. If the price earnings ratio declined to its historical average then the value of equities would fall by $10 trillion.

Feldstein did not spell out the implications of such a decline but it would result in a financial meltdown far beyond that of 2008. He did point to the “excessively easy monetary policy” that had “led to overvalued equities and a precarious financial situation.”

In another warning, the global bond trader Pimco said the very fact that investors had been ploughing money into ever-riskier assets, with no fears and amid expectations that they would keep on rising, was a cause for concern.

Speaking to Bloomberg TV on Wednesday, Pimco global economic adviser Joachim Fels said: “The fact that fear is gone is the main reason why we should be worried. That means most investors are now pretty fully invested and that means they will want to get out if the markets start to correct—exacerbating the downdraft.”

In other words, in the expectation that markets are on the rise, and seeking to take advantage of profitable opportunities, large investors have no cash reserves. They will have to liquidate their holdings if there is a fall— creating a rush for the exits that further accelerates the process.

An even more severe scenario was spelled out in the Global Risks Report prepared by the World Economic Forum for its Davos summit of the world political and financial elites to be held later this month.

While rising share prices had delivered “positive returns”—billions of dollars transferred to the ultra-wealthy—there were “underlying concerns,” most notably the weakest post-recession recovery in record and low productivity growth.

With asset prices at “unsustainable levels” and “continuing strains in the financial system,” a systemic collapse “could push countries, regions or even the whole world over the edge and into a period of chaos.”

The turmoil surrounding bitcoin has to be placed within this context. While cryptocurrencies occupy a very small portion of the financial system, their speculative rise over the past year and the plunges in recent days are symptomatic of much broader processes.