German chancellor Angela Merkel: Economic interests take precedence over lives

Peter Schwarz

German Chancellor Angela Merkel’s Sunday evening appearance on “Anne Will,” the political talk show, confirmed that there can be no way out of the coronavirus crisis without mobilizing a broad movement of the working class.

Merkel at the Chancellor's Office last month (AP photo/Markus Schreiber, pool).

The hour-long television programme consisted of a string of excuses, reassurances and attempts to divert blame for the current crisis to Germany’s 16 different states. Television journalist Anne Will submissively delivered the appropriate cues to the chancellor, who was the only guest. In the course of the programme, Will refrained from touching the key question—which economic and social interests stood to benefit from the chancellor’s pandemic policies?

At every stage of the crisis, the policies of Germany’s federal and state governments have been characterised by one principle: profits take precedence over lives, economic interests are more important than the health of the population. Merkel (Christian Democratic Union, CDU) is sticking to this principle under conditions where the crisis is escalating dramatically.

Even the chancellor’s closest advisers are now warning of a catastrophe. “There are very clear signals that this wave could be even worse than the first two waves,” said Lothar Wieler, the president of the Robert Koch Institute (RKI), the German government agency and research institute responsible for disease control and prevention. Wieler considers an increase in new infections of up to 100,000 per day to be possible. Other forecasts predict 200,000 infections a day. That would require a hard lockdown, he said. “We had a lockdown worthy of the name in the spring of last year.”

Social Democratic Party (SPD) health expert Karl Lauterbach has warned of a rise in COVID-19 deaths from the current 76,000 to more than 100,000 in the absence of immediate countermeasures. “It will not work without a sharp lockdown,” Lauterbach stressed to the Tagesspiegel newspaper. He also criticised the fact that too little attention was paid by political circles in Berlin to the long-term consequences of the virus. This affects “up to ten per cent of those infected, i.e., currently up to 250,000 people.” “The third wave is being underestimated politically and medically,” he added.

For her part, Merkel was playing for time. “I’m still thinking about it”; “I have not finished thinking it through to the end”; “We’ll look at it now, and then, if necessary, we’ll have to balance all the options for action”; if something doesn’t happen “in the very foreseeable future,” she would “have to consider how it could perhaps be regulated on a nationwide basis”—this was the mantra she repeated.

Merkel promised businesses, which have never been subject to a lockdown and can decide for themselves if they test employees or not, that she would evaluate their conduct for a few more days. If she were still not satisfied, she would contemplate revising the country’s labour protection regulations.

Delivering workers like lambs to the slaughter—this is the pattern that has determined the coronavirus policy of the German government from the beginning. The government only really changed gear after it pumped hundreds of billions into big business and the financial markets. Countless workers lost their jobs and incomes, self-employed persons, artists and small businesses were ruined while stock markets recorded historic highs. Major German corporations such as Daimler, VW and BMW have paid out billions in dividends.

In order for the companies to make profits, schools and day-care centres were kept open to “enable” parents to go to work. For almost a year, the media, politicians and a few dubious academics spread the myth that children and young people could not spread the virus, although serious scientists have long since proven the opposite. The Bild newspaper organised a vicious smear campaign against the Charité hospital virologist Christian Drosten, who had published a study to this effect.

In the meantime, it can no longer be denied that schools and day-care centres are among the most important virus spreaders. An article in the latest issue of Der Spiegel magazine begins with the words: “When the history of the coronavirus pandemic is written, one of the worst omissions to go down in the annals will be what we did to children—and their parents—by failing to make schools and day-care centres secure places.”

Although now “the much more contagious and dangerous mutant B.1.1.7” was sweeping the country, the Spiegel article continued, instead of drastically restricting contacts, especially at schools, there was a relaxation of protective measures. In fact, “the incidence of infection among children up to the age of 14 years is exploding.” The number of cases has almost tripled in the past five weeks.

“The consequences of this rapid spread are already becoming apparent, some in horrific ways,” the magazine observed. “The virus is affecting some children violently due to a false reaction of their immune system… The children in turn infect their parents, who become ill, with some becoming very ill.”

This, however, has not prevented Germany’s federal and state governments from continuing to reopen schools. Merkel made a transparent attempt on the “Anne Will” show to shift responsibility onto state premiers, whom she accused of not applying the emergency shutdown brake decided on March 3. This provides for certain measures to automatically come into force again once a certain incidence value of infections is reached.

However, this is just a smokescreen. In reality, Merkel and the state premiers from all of Germany’s main parties—the Left Party’s Bodo Ramelow, the Green Party’s Winfried Kretschmann, the SPD’s Michael Müller and Malu Dreyer, the CDU’s Armin Laschet and Volker Bouffier and the Christian Social Union’s Markus Söder—all agree in principle on the need to subordinate COVID-19 policy to the interests of big business and finance. They jointly decided on this policy at the start of the pandemic and have implemented it consequently ever since.

Only a few days ago, after all, Merkel publicly apologized for the fact that in a meeting with the state premiers they had decided on one additional day off work over Easter in order to reduce infections. In her humiliating apology, she reversed the decision. She did not apologise to the relatives of the 76,000 coronavirus dead, nor to the teachers and nurses who have risked their lives, but to the business representatives who unleashed a storm of protest against this utterly inadequate and pathetic measure.

Merkel’s appearance on “Anne Will” is only the latest link in a long chain of events that confirm that the federal and state governments and the parties behind them are completely incapable of meeting the most elementary needs of the population.

The current vaccination debacle is also a result of their complete indifference to human lives. Experts advised of the importance of establishing sufficient production capacities at a very early stage when the first vaccines had been developed but not yet tested.

Lauterbach, who is himself an immunologist, called for the establishment of mass production as early as May 2020. His proposal was rejected. If the government had followed his proposal, Lauterbach said, it would have cost 24 billion euros [US$28.1 billion] and the population could have been fully vaccinated by the end of April. Instead, the government, in which the SPD fills the post of finance minister, preferred to give away many times this amount to the big corporations and banks.

The failure of the ruling elites in the face of the pandemic is an international phenomenon. In France, where President Macron has ignored all warnings from experts, the seven-day incidence has surpassed 400. In the Paris region, the capacity of intensive care units has already been exceeded. The US has the highest number of coronavirus deaths in the world at 564,000, while the UK leads in Europe with 127,000 deaths.

This huge number of largely avoidable deaths is the result of a bankrupt social system. After decades of income redistribution that has resulted in princely wealth for a tiny minority and an endless series of wars in Afghanistan, Iraq, Libya and Syria, which has devastated entire societies, human lives are of little value in the eyes of the ruling elites.

While the electorate is told that there is no money to fund a full lockdown and provide necessary vaccines, billions are being poured into military rearmament and preparations for nuclear war.

Opposition to the governments’ coronavirus policies is enormous. Poll after poll shows that the vast majority demand tougher protective measures or approve of the existing ones. But they find no support for their demands from the main political parties or the trade unions, all of which support the policy of opening up society in the interests of profit.

Macron rejects calls for strict lockdown as COVID-19 surges in France

Will Morrow & Alex Lantier

In a nationally-televised address last night, French President Emmanuel Macron rejected desperate calls from medical authorities for a hard lockdown, as the pandemic spins out of control throughout the country. Instead, Macron announced minor social-distancing measures that are totally inadequate as a contagion driven by COVID-19 variants surges across France and Europe.

Schools will be closed and classes transitioned online for one week, beginning next Monday, before the holiday break at the end of next week. After the two-week holidays, preschool and primary school-aged children will return to in-person classes, while high school classes are to remain online for an additional week. For the 1 or 2 weeks that classes are online, parents who cannot work from home will receive wage assistance to remain at home.

French President Emmanuel Macron [Sebastien Nogier, Pool via AP]

Measures imposed two weeks ago in 20 regions, including Paris, are also to be extended across France. These include closing retail stores selling nonessential items, and limiting people’s movements when not going to work or school to a 10-kilometre radius around homes.

Acting with blatant contempt for human life, Macron ignored urgent warnings by medical authorities that anything less than a full lockdown will flood hospitals in Paris and other major cities across France. Thousands of lives will be lost as doctors are forced into the barbaric situation of choosing whom they will treat, and whom they will not treat, for lack of space.

Daily new cases in France range between 34,000 and 45,000—the equivalent of 200,000 daily cases in a country the size of the United States. Less than 5 percent of French people are fully vaccinated against COVID-19.

The day before Macron spoke, Patrick Bouet, the head of the National Council of the Order of Doctors, published an open letter in the daily Libération demanding a change in policy. He wrote, “with this terribly grave situation, the strictest measures are imposed upon us, that is, a true lockdown everywhere is needed.” He added, “we have lost control of the epidemic. Patients are ever younger, infections in schools are so many indicators of the continual degeneration of the situation over the last weeks.”

Bouet cited desperate warnings from the Public Association of Paris Hospitals (AP-HP). With 1,484 patients in intensive care, 90 percent of intensive care beds are already occupied. However, AP-HP warned that a failure to enforce a strict lockdown beginning April 1 would mean more than 3,400 patients in intensive care within the Ile-de-France broader Paris region in three weeks. An additional week’s delay, they warned, would mean 1,000 patients more would need intensive care by the end of the month.

“Life can tolerate today no arbitrage, no hesitation, no betting,” Bouet wrote, concluding: “I solemnly ask you to immediately reinforce, clearly and with no detours, our health measures. They can still avoid the virus engulfing everyone across our territory. Mr President, before we are massively vaccinated, everywhere the situation is serious, you must put us under lockdown.”

Instead, Macron signaled that the virus will be allowed to continue spreading throughout the population, in defiance of scientific and medical advice.

A year ago, on March 17, 2020, after a wave of wildcat strikes in Italy, and across Europe and America, French authorities agreed to a two-month full lockdown. At that point, there were less than 8,000 confirmed cases and 175 deaths from COVID-19. Today, there are over 4.2 million active cases and there have been over 95,000 deaths from COVID-19 in France.

Yet Macron proposed not a full but a partial lockdown—without a shutdown of nonessential industrial production, or a full closure of the schools—and for less than half the duration.

As it refuses the measures health authorities are begging it to take, the Macron government is anticipating a vast wave of death that will sweep across France and Europe. It plans to double the number of emergency care beds in France to 10,000 and train new intensive care nurses. At the same time, state officials are discussing plans to distribute oxygen tanks to severely ill patients in their homes—effectively leaving them to their fate, unless they can be treated by a small number of overworked visiting nurses.

The number of classes forced to close by infections among students and teachers is skyrocketing. Last Friday, the education ministry reported 3,256 classrooms closed, up from 1,238 one week earlier. In Paris, Socialist Party mayor Anne Hidalgo reported that the incidence rate of the virus among 15–18-year-olds is 800 per 100,000, significantly higher than the broader population.

In the working-class Paris area district of Seine-Saint Denis, individual teachers, unsupported by the trade unions, have begun invoking their constitutional right not to work in life-threatening conditions to walk off the job and close schools. These include the closed Eugène Délacroix high school, where at least 20 students’ parents have died of COVID-19.

Macron did not attempt to reconcile his decision to briefly close schools with his government’s repeated claims that school closures are ineffective against the spread of the virus. Only last Friday, Education Minister Jean-Michel Blanquer said, “it has not been demonstrated that the holiday period leads to fewer infections than during the school period.”

Instead, like the Roman Emperor Nero who fiddled while Rome burned, Macron spent much of his speech congratulating himself on his disastrous handling of COVID-19. “Since the beginning of this year we have opted for a response which aimed at slowing the epidemic without locking down,” he said. He hailed his government for “taking into account the consequences of restrictions on our children, on their education, on the economy, on society, on mental health.”

In fact, the policy adopted by Macron and the entire European Union (EU) placed profits over lives, with disastrous consequences. In January, polls indicated two-thirds of the French public supported a lockdown to halt the spread of the disease, and doctors were calling on Macron to implement strict social distancing. Yet Macron insisted upon rejecting a lockdown.

Events since then have refuted all Macron’s rationalizations for keeping children in school, and workers at work, so that profits would continue to flow to the banks and major corporations. This policy, supported and adopted by governments across the EU, did not “slow” the pandemic. Rather, they led daily new cases in France to pass from around 10,000 at the end of December to triple that or more today.

Claims that “herd immunity” policies would save the economy compared to lockdowns are also exploded as frauds. Countries like China, Taiwan and Vietnam used scientific procedures such as lockdowns and rigorous test-and-trace procedures to limit the spread of the virus. With 96 million inhabitants, Vietnam has seen 35 deaths, and its economy grew over 2 percent in 2020.

France, with just under 67 million inhabitants, has seen nearly 100,000 deaths and, together with the rest of Europe, is sunk in its deepest economic and social crisis since the Great Depression of the 1930s. The EU used this pandemic, however, to give a €1.25 trillion bailout to the banks and hand out over €750 billion in EU bailout funds in state loans to major corporations. A parasitic financial aristocracy is feasting on unprecedented handouts of public funds, while thousands are left to die.

The disaster unfolding in France exposes the bankruptcy of European capitalism. This includes not only the banks and the governments, but also the union bureaucracies and their political allies in the middle class, the pseudo-left parties, who in France have served as Macron’s essential allies in implementing the open schools policy. Having signed their approval of EU bailouts as part of their negotiations with Macron, the unions isolated strikes by teachers last autumn against in-person learning, allowing Macron to crush strikers with riot police.

Macron’s speech is a warning: the only way to avert truly horrific levels of death in France, as across Europe, is the international mobilization of the working class in struggle. Schools and nonessential production must be closed, and workers provided with a comfortable living wage to support them throughout the pandemic until a vaccine can be administered to the entire population. Massive resources must be invested to provide educators with the means for an effective program of online learning for students.

A struggle for such policies can only be organized independently of the union bureaucracies, however, as an international political movement to expropriate the financial aristocracy and transfer state power, including control over health policy, to the working class.

Australian Labor Party prepares for war and social unrest

Mike Head

The most notable feature of this week’s two-day online Labor Party “Special Platform Conference” was the frequency of the references to crisis and war.

With the current Liberal-National Coalition government visibly unravelling, the event amounted to a rather anxious pitch to the corporate elite by the Labor leaders and their trade union partners presenting themselves as uniquely qualified to prosecute its agenda in the face of unprecedented geo-strategic and social tensions.

Anthony Albanese addresses ALP conference (Source: YouTube)

In his opening speech, party leader Anthony Albanese claimed the mantle of the Labor governments of prime ministers Curtin and Chifley from 1941 to 1949. “In Australia’s moment of greatest crisis at the height of the Second World War, John Curtin, led the nation out of military danger then Ben Chifley led into reconstruction,” Albanese declared. “Their motto—victory in war and victory in peace.”

Likewise, shadow foreign minister Penny Wong referred to a “less stable and more dangerous world” in which conflicts had been accelerated by COVID-19. “We face the most challenging circumstances since World War II,” she said. “Only Labor has the vision and discipline to address these issues.” She boasted that Labor had forged the US alliance during the last world war.

Party president Wayne Swan, who was the treasurer in the last Labor government from 2007 to 2013, declared that Prime Minister Scott Morrison’s government was “falling to pieces.” Therefore, the “nation looks to us,” as it always had in times of war and when economic “reform” was needed. Labor had “mobilised the country” when faced with “invasion in World War II.” And it had restructured the economy in the 1980s and 1990s. That was when the Hawke and Keating Labor governments worked via Accords with the unions to destroy workers’ jobs and conditions to satisfy the dictates of the financial markets.

Even more than previous Labor conferences, this was an extraordinarily scripted and orchestrated event. Every hand-picked speaker endorsed a policy platform that commits a Labor government to fiscal “prudence” in the wake of the devastating global pandemic and a stepped-up commitment to the US military alliance as the Biden administration intensifies Washington’s confrontation with China.

Adopted unanimously, the document vows that a Labor government would “be an effective and collaborative partner with the business community” and “promote Australia’s international competitiveness”—all with the help of greater “workplace collaboration” between business and unions. It pledges to strengthen “the US Alliance” because of “its vital importance to Australia’s national security requirements.”

Albanese’s opening address on Tuesday added an economic nationalist axis to the further pro-business shift that he spearheaded after being installed as Labor leader following the party’s May 2019 election debacle. At that election, held six months after the party’s last national conference, Labor’s primary vote fell to just 33.3 percent, the lowest in 85 years, with the biggest losses in working class areas.

The Labor leader extolled a plan he had unveiled in the media that morning for a $15 billion “National Reconstruction Fund” to essentially subsidise big business projects in a “new era of national reconstruction,” supposedly like that launched by the Chifley government after World War II.

Albanese declared that the pandemic had shown the economy’s supply chains and “sovereign capabilities” were vulnerable. “We shouldn’t have to rely on other countries when it comes to protecting and providing for our people,” he said. As the danger of a US-led war with China rises, the US and all its allies are seeking to end their reliance on China for strategic goods.

The $15 billion package is also a slush fund—described as “a combination of loans, equity, co-investment and guarantees”—to attempt to lift corporate investment, which remains at record lows despite all the government and media talk of “recovery.”

As well as aligning themselves behind plans for war, the Labor and union leaders are drumming up patriotism and protectionism to divert working class discontent and try to reverse the collapse of support and their memberships. Demands for government procurement and other policies to favour “Australian-made” products saturated the proceedings.

Australian Manufacturing Workers’ Union national secretary Steve Murphy said the promises of restoring domestic manufacturing production via Labor’s investment fund would “play well to our base.” But, revealingly, he warned that workers were “cautious” about such announcements, distrusting Labor’s claims that secure, well-paying jobs would result.

In another rare honest statement, the party’s Queensland assistant state secretary Zac Beers said “workers abandoned us in droves” in 2019 because they did not trust Labor and did not believe its promises.

Throughout the stage-managed event, a hand-picked parade of Labor officials and representatives of the supposed “mighty” trade union movement were each given two minutes to declare that only a Labor government could and would protect working people from the mass unemployment, under-employment and tearing up of working conditions that has intensified throughout the pandemic.

A hint of the reality came when shadow finance minister Katie Gallagher spoke of the need to “provide business with the confidence to invest.” That essentially means working with the unions to suppress workers’ struggles against cuts to wages and conditions, while slashing social spending. Gallagher attacked the Morrison government from the right, denouncing it for running eight budget deficits in a row, pushing up the public debt level.

The incessantly repeated new slogan was Labor is “on your side.” Deliberately vague, it junks the discredited 2019 election rhetoric of a “fair go.” Precisely because of decades of bitter experiences with the pro-business Labor Party and its affiliated unions, that “fair go” sloganeering failed to cut any ice with increasingly disaffected working class voters.

Albanese’s leadership remains in doubt. He admitted that he had come under criticism for collaborating too openly with the Coalition government as it exploited the pandemic to hand hundreds of billions of dollars to big business while deepening the assault on jobs and wages. In a bid to shore up his position, at least for now, he closed the conference yesterday by saying “we are in the home straight to an election” and therefore had to “pull together.”

Labor’s commitment to the Biden administration’s ramped-up offensive against China was displayed most starkly in the session on foreign policy. Significantly, the draft platform was amended to hail the US-led Quadrilateral Security Dialogue, or Quad, which brings Australia, Japan and India into a quasi-military alliance with Washington to encircle and prepare for war against China.

The first-ever Quad leaders’ summit convened by President Biden on March 12 took to a new level the drive by US governments to prevent China from economically or strategically challenging the global hegemony asserted by US imperialism following its victories in World War II.

Even more provocatively, the Labor conference unanimously passed no less than six resolutions denouncing China, accusing it of territorial aggression in the South China Sea, threatening Taiwan, denying basic rights in Hong Kong and Tibet, and committing human rights violations against Uighurs and other minorities in Xinjiang province.

These accusations hypocritically exploit the Beijing regime’s police-state repression—which is directed above all against the working class—to justify intervention by the US and its allies. Of course, there were no such condemnations of the military invasions, occupations, coups, mass killings of civilians and war crimes perpetrated by these powers, including Australia, for decades, including in Afghanistan and Iraq.

To underscore Labor’s commitment to preparations for war, Albanese used media interviews during the conference to support the Morrison government’s announcement of a $1 billion “sovereign guided weapons enterprise” to manufacture missiles and other guided weapons. “This a bipartisan issue,” Albanese told the Australian Broadcasting Corporation’s breakfast television show. “Australia does need to be more resilient when it comes to our defence.”

A US ambassador visits Taiwan for first time since 1979

Ben McGrath

The US ambassador to Palau, John Hennessey-Niland, visited Taiwan on Sunday, becoming the first ambassador to visit the island since Washington cut formal diplomatic ties with Taipei in 1979. Hennessey-Niland is traveling with Palau’s President Surangel Whipps, who leads one of only 15 countries that diplomatically recognize Taiwan rather than Beijing.

Whipps is ostensibly on a five-day trip to Taiwan to launch a new Taiwan-Palau “travel bubble,” which will allow people to take trips between the two, with reduced COVID-19 restrictions. However, Hennessey-Niland’s presence is a deliberate breach of long-standing diplomatic protocols, limiting contact between the US and Taiwan, and is aimed at further stoking tensions with Beijing. As part of establishing diplomatic ties with China in 1979, the US recognized the One China policy: that Beijing was the legitimate government of all China, including Taiwan.

US Ambassador John Hennessey-Niland (Source: Twitter)

The American Institute in Taiwan (AIT), which serves as Washington’s de facto embassy on the island, released a statement on the trip Tuesday, claiming, “The United States, Taiwan, and Palau share a strong commitment to democracy, to a free and open Indo-Pacific, and to advancing the peace and prosperity of the region.” While not addressing Beijing by name, Washington regularly alleges that China is a threat to the “free and open Indo-Pacific.”

While a small island nation in Micronesia, Palau is a major part of Washington’s war plans against China. In 2017, the US Defense Department called Palau “indispensable to our national security.” Currently, the US has exclusive rights under its 1982 Compact of Free Association with Palau to use the island nation, which is strategically located near the Philippines and Indonesia, as a military base. Last year, Palau requested that the US build bases, which would allow the US to permanently station its military there.

The visit is another in a string of provocations aimed at Beijing, as the Biden administration continues and deepens the dangerous, pro-war policies of his predecessor, Donald Trump. In the final day of the Trump administration, Secretary of State Mike Pompeo ended all restrictions on contact between US and Taiwanese officials, both military and civilian. The Biden administration is following suit, preparing guidelines that would encourage US officials to meet with their Taiwanese counterparts. This would essentially cause most restrictions on such meetings to “disappear,” in the words of an official to the Financial Times.

China’s Foreign Ministry spokesman Zhao Lijian denounced Hennessey-Niland’s visit, saying on Monday, “The one-China principle is the political foundation of China-US relations. China is firmly opposed to any form of official exchanges between the US and the island of Taiwan. This position is consistent and clear... We urge the US not to try to breach China's bottom line, to avoid serious damage to China—US relations and peace and stability across the Taiwan Straits.”

Beijing also responded by dispatching 10 warplanes on Monday, through Taiwan’s Air Defense Identification Zone (ADIZ) to the southwest of the island. These maneuvers are often presented in the establishment media as violations of Taiwanese airspace, but ADIZs are declared unilaterally and have no standing in international law. As such, Beijing’s flights have been through international airspace.

The hypocrisy is evident. Washington has already sent warships through the Taiwan Strait—thousands of kilometres from the American mainland—on three separate occasions since Biden took office, claiming the voyages were “in accordance with international law.” Beijing, however, is accused of being aggressive and menacing, when passing through airspace close to the Chinese mainland, and moreover of territory recognized by Washington as being part of China.

The US is playing a dangerous and reckless game. Under Trump and now Biden, the US is deliberately inflaming the most explosive flashpoint for war with China. While a slew of articles in the American press warn of the dangers of a Chinese invasion of Taiwan, it is the US that is deliberately undermining the “One China” policy, and establishing closer ties with Taiwan, which constitute a strategic threat to Beijing.

The New York Times wrote last August, citing unnamed officials in Washington: “Those officials, as well as Republican and Democratic lawmakers, aim to do as much as possible to show explicit US support for Taiwan. They want to send military signals to China and to make relations with Taiwan as close to nation-to-nation as possible, short of recognizing sovereignty.”

The Biden administration is continuing the policy. In addition to the provocations already mentioned, the US is now engaged in a further militarization of the region, including plans to dispatch missiles to Taiwan over the next six years. Doing so could lead to the outbreak of war; Beijing will not allow Taiwan to be turned into a platform for military aggression against the mainland, less than 200 kilometres away across the Taiwan Strait.

Secretary of State Antony Blinken went so far as to refer to Taiwan as a “country” on March 10, calling the island, “a country that can contribute to the world, not just its own people. COVID is a very good example of that.” Beijing has made clear that if Taipei ever declares independence in violation of the “One China” policy, it would use military force to reunite with Taiwan. Blinken’s remarks cannot be excused as a slip of the tongue.

The US ultimately bears responsibility for the destabilization of the region. After World War II, the Republic of China, the formal name of Taiwan today, regained control of the island, which had been a Japanese colony since 1895. After the 1949 Chinese revolution, the defeated Kuomintang fled to Taiwan where it was protected by the US Navy. It was then allowed to posture as the legitimate government of all of China, including sitting as a permanent member with veto powers on the UN Security Council.

During the latter half of the 20th century, the US launched devastating wars against countries in Asia, including North Korea and Vietnam, while threatening China with nuclear annihilation. Washington made a tactical decision to formally recognize Beijing in 1979, aimed at undercutting the Soviet Union, while at the same time continuing to supply Taipei with weaponry and unofficial political support.

Since the dissolution of the Soviet Union in 1991, Washington has carried out a series of regime change operations from the Balkans to Iraq, Libya and Ukraine, that have left entire societies in ruin. Within this context, as part of the Obama administration’s “pivot to Asia,” Washington began inflaming regional territorial disputes in the East and South China Sea to bring pressure on Beijing.

For all the talk of democracy and human rights, Washington’s fundamental aim is to offset its economic decline, deflect domestic tensions outwards, and prevent China from overtaking it as the leading economic power in the world. In doing so, US imperialism is recklessly engaged in the drive to a war that threatens the annihilation of the entire planet.

IMF chief warns of debt crisis for developing countries

Nick Beams

The International Monetary Fund has warned that lower-income countries face a debt sustainability crisis as interest rates on bonds start to rise.

IMF chief Kristalina Georgieva delivered a speech this week at a virtual meeting, ahead of the spring meetings of the IMF and the World Bank. She said tightening financial conditions resulting from stronger economic growth in the US “could cause a rapid rise in interest rates… and significant capital outflow from emerging and developing economies.”

Kristalina Georgieva of the International Monetary Fund (Source: imp.org)

Such a development “would pose major challenges especially to middle-income countries with large external financing needs and elevated debt levels.”

The IMF warning follows similar statements from the UN secretary-general António Guterres. In an interview with the Financial Times this week, he said the world faced severe problems of debt sustainability in the wake of the coronavirus crisis that had not been properly understood or addressed.

He said the response to COVID-19 and to the financial aspects of the crisis “has been fragmented and geopolitical divides are not helping. It has been too limited in scope and too late.”

Guterres said the fact that only six countries—Argentina, Belize, Ecuador, Lebanon, Suriname and Zambia—had so far defaulted on their debts created the “illusion” of stability and a “misperception of the seriousness of the situation.”

In failing to address debt sustainability, “the risk is that we compromise the recovery of the economies of the developing world with catastrophic consequences for people’s lives, with an increase in hunger and poverty and dramatic problems with health and education systems, in many cases leading to instability, social unrest and, at the limit, conflict. Everything is now interlinked.”

In her remarks, Georgieva said the IMF would upgrade its forecast for global growth from the level of 5.5 percent it had predicted in January as a result of the stimulus measures in the US and fiscal action by other governments. But she said while the overall outlook had improved “prospects are diverging dangerously not only within nations but also across countries and regions.”

Compared to pre-COVID projections the cumulative loss in per capita income for advanced economies will be 11 percent by next year. But for emerging and developing economies, excluding China, the loss will be much worse, coming in at 20 percent.

“This loss of income means millions of people will face destitution, homelessness, and hunger,” she said.

“There could also be much more pressure coming to vulnerable emerging market, low-income and fragile states. They already have much more limited fiscal power to fight the crisis. And many are highly exposed to hard-hit sectors, such as tourism.”

The IMF chief also warned of impact of the rolling back of government support measures on small and medium-sized enterprises (SMEs).

SMEs are the world’s biggest employer, she said, and “our research shows that the share of insolvent SMEs could rise sharply this year as support is scaled back—threatening one in ten jobs in this vital sector.”

The warnings over the debt sustainability for lower-income countries come as the yield on US Treasury bonds has risen sharply in the first three months of this year. Earlier this week the yield on US 10-year Treasury bonds, the benchmark for global interest rates, rose to 1.77 percent—the highest point since January 2020 before the pandemic struck.

A continued rise will mean that capital will be sucked out of developing economies.

The fall in US bond prices and the consequent rise in yields, interest rates, is being fueled by two interconnected processes—the fear that inflation will start to rise and the increased supply of bonds to finance US government debt will lead to further falls in their price.

As one financial analyst told the Financial Times, the “massive” scale of the stimulus in the US and globally—estimated by the IMF to be around $16 trillion—had caused “considerable nervousness over inflation and has been behind the recent sell-off in government bonds.”

The potential for rapid shifts in the Treasury bond market was seen in what had been as described as a “disastrous” auction of new seven-year bonds on February 25. Some 40 percent of the $68 billion issue had to be bought by the underwriters because there were no buyers. Some stability has returned in the past month but the threat of another freeze is ever-present.

Fed chair Jerome Powell has insisted the central bank does not fear a rise in long-term inflation and that any price hikes over the next year will not be structural.

But there is concern in financial markets that inflation could take off and the extent of the US stimulus measures will bring a rise in interest rates, notwithstanding the Fed’s commitment to keep its base rate near zero at least until 2024.

In a recent comment entitled “The return of the inflation spectre,” Financial Times columnist Martin Wolf warned that an inflation overshoot could trigger a deflationary response from central banks, leading to much higher rates. And its effects would go far beyond lower-income countries.

“That could lead to waves of defaults far more pervasive than in the early 1980s, when the big story was the debt crisis in developing countries. This time, the debt crisis could be almost everywhere, because there is so much more debt.”

It is a measure of the profound crisis within the capitalist system that the prospect of higher growth in the US—normally regarded as a positive for the world economy—has sparked fears it will lead to rising interest rates, resulting in economic devastation for lower-income countries. And not only there but it could hit the advanced countries as well because the profit-making machine centred in Wall Street and other major financial markets has become so addicted to the endless supply of cheap money.

The trial of Derek Chauvin and the epidemic of police murder in America

Trévon Austin

Wednesday concluded the third day in the trial of Derek Chauvin, the former Minneapolis, Minnesota police officer who kneeled on George Floyd’s neck for more than nine minutes last May.

The deliberations over the last three days have confirmed what millions of workers around the world already know: Floyd’s death was a brutal police murder in cold blood. Occurring in the midst of the pandemic, it was a particularly graphic display of the nature of the apparatus of repression and violence that goes by the name of “law enforcement.”

George Floyd (Credit: Offices of Ben Crump Law)

One after another, witnesses recalled their shock, horror, and outrage as they saw officers pin Floyd on the pavement as he begged for his life. Nearly every witness that has taken the stand so far—people of different races and backgrounds—has come to tears while being questioned or shown footage reminding them of what transpired on May 25, 2020.

Minneapolis firefighter Genevieve Hansen, who is white, testified that she begged officers to let her take Floyd’s pulse. Hansen recalled how officers refused to allow her to assist Floyd, even after she identified herself as a firefighter. Hansen teared up as she recounted the helplessness she felt as Chauvin continued to kneel on Floyd after she could tell he was not conscious.

Darnella Frazier, an African American teenager who recorded the viral bystander video of the incident, told jurors she has stayed up some nights “apologizing and apologizing to George Floyd for not doing more and not physically interacting and not saving his life.”

Alyssa Funari, another bystander who recorded events, cried as she explained that she wanted to intervene but was unable to because “there was a higher power there”—a reference to officers who pushed witnesses to the crime away and threatened them with mace.

The prosecution played harrowing bodycam footage Wednesday, in which Floyd could be seen pleading with officers, telling them that that he was scared and begging not to be shot. In the footage, officers continued to pin Floyd to the pavement even after one acknowledged Floyd had passed out.

Derek Chauvin

Floyd’s brutal murder at the hands of the Minneapolis Police Department evoked an outpouring of empathy and anger from workers across the globe. Protests began locally in Minneapolis the day after Floyd’s death and eventually spread to over 2,000 cities in over 60 countries. An estimated 15 to 26 million people protested at some point in the US, making the demonstrations the largest in US history.

The demonstrations were of a multi-ethnic, multi-racial and international character, and workers actively fought efforts to divide the struggle along racial lines.

While the protests were sparked by the killing of Floyd, deeper issues were driving them. In late May, the death toll from the coronavirus pandemic in the US reached 100,000. Millions were out of work and without income while Congress provided trillions to Wall Street, only offering scraps to workers. The ruling class, led by the Trump administration, had initiated its homicidal back-to-work campaign, a policy which has been continued by President Joe Biden, driving the death toll above 560,000 today.

The ruling class responded to the protests by sending police on a militarized campaign of repression. Both Democrats and Republicans called on police and National Guard forces to terrorize the population. More than 14,000 people were arrested during the protests, charged with petty offenses such as violating curfews or blocking roadways. Police routinely violated the democratic rights of journalists, arresting 128 in 2020, a record for a single year. At least 19 people died during the police crackdown.

On June 1, Trump—who encouraged police violence throughout his administration—threatened to invoke the Insurrection Act to deploy the military across the country and effectively declare martial law. This response was not simply or even primarily aimed at the popular protests against police violence. It reflected the fear in the ruling class of growing social anger over its homicidal response to the pandemic. The threat of dictatorship found its ultimate political expression in the attempted fascistic coup in Washington D.C. on January 6, 2021.

While supporting the police crackdown, Democrats worked on a parallel track. They sought to direct outrage over Floyd’s murder and the broader epidemic of police violence into a campaign based on stoking racial division. Workers were told that police killings were a racial matter that could be solved by making Kamala Harris the first female, African American and Asian American Vice President. The Black Lives Matter movement was heavily promoted and organizations associated with the movement were flooded with tens of millions of dollars by major corporations.

The Democrats, however, are no less culpable than the Republicans for the epidemic of police violence. Before George Floyd, there was Michael Brown in Ferguson, Missouri in 2014, when protests were met by a militarized response overseen by the Obama administration. No doubt there will be, during the Biden administration, further outrages, some caught on camera, the majority not. According to an analysis by the Washington Post, there has been no significant reduction in the rate at which police kill people under Biden.

Since mappingpoliceviolence.org began keeping data in 2013, police have killed over 1,000 people every year. On average, US police kill more than 3 people every day. Already in 2021, police have killed more than 200 people.

Police killed 1,127 people in 2020, even in the midst of the pandemic. Of those, 457 were white. Year after year, white people account for the largest share of individuals killed by police. While racism plays a role, and the most backward and fascistic sentiments are encouraged within the police, the disproportionate number of minorities murdered is primarily a product of police patrolling the most vulnerable and impoverished communities.

The prevalence of police violence in the United States is, at its root, a class question, not a racial issue. It is the noxious product of a society characterized by unprecedented levels of social inequality. The concentration of wealth in the hands of a plutocracy has only increased over the past year, with the massive bailout of Wall Street fueling the rise of the pandemic profiteers.

Any struggle against police violence cannot be waged on a racial basis. Last year’s protests demonstrated the unity and power of the working class. The only way forward is a socialist program, which rejects artificial barriers and unites workers along their common class interests. The impassioned responses of the witnesses in Chauvin’s trial were not determined by their race, but by their humanity and empathy for the thousands of workers killed by police every year.

Biden unveils infrastructure plan tied to corporate tax hike

Patrick Martin

President Joe Biden unveiled a proposal for rebuilding the crumbling infrastructure of the United States, but the plan is longer on rhetoric than on actions on the scale required to rebuild and modernize roads, bridges, water systems, airports, schools, housing and other physical facilities, as well as the social infrastructure—education, health care, scientific research.

In a speech at a carpenters’ union training center in Pittsburgh—a city that symbolizes the collapse of American industry, not its rejuvenation—Biden called his “American Jobs Plan” the largest public investment since World War II, and compared it to the building of the interstate highways in the 1950s and the space race of the 1960s.

Biden speaks during at The Queen theater, Thursday, Jan. 14, 2021, in Wilmington, Del. [Credit: AP Photo/Matt Slocum]

He offered no explanation of how American capitalism, after 40 years of stagnation and decay, most noticeable in its physical and social infrastructure, could suddenly summon the resources to revive systems that had been allowed to disintegrate, to the point where tens of thousands of bridges are in imminent danger of collapse.

Biden said nothing about the responsibility of the American financial aristocracy, the Wall Street vampires who have sucked up the resources of the country, amassing fortunes on a scale that puts into shade all previous ruling elites in world history, while the country decayed around them. Instead he made a pledge of loyalty, declaring, “I have nothing against millionaires and billionaires. I believe in American capitalism.”

While the top-line number of $2.25 trillion is constantly emphasized by the White House and its media supporters, since that might sound like a lot of money, spread out over eight or even ten years, it comes to less than $300 billion a year—about one-third of the Pentagon budget each year, and less than a quarter of the $1.3 trillion increase in the wealth of America’s billionaires in the course of the pandemic year.

The four main categories of spending include $650 billion for transportation infrastructure, such as roads, bridges, highways and ports, including subsidies for public transit, Amtrak and freight rail; $300 billion for housing infrastructure, mainly for retrofitting and upgrading two million homes, and eliminating lead pipes and lead service lines in water systems; $300 billion to “revive US manufacturing” (i.e., various subsidies to favored industries); and $400 billion toward home care for the elderly and the disabled.

The $650 billion over eight to ten years should be compared to the $2.6 trillion funding gap found by a report earlier this year from the American Society for Civil Engineers, which accounts for the disastrous condition of American roads, bridges, water systems, airports and other public facilities.

Lesser sums include $100 billion for high-speed broadband across the entire country, $100 billion to upgrade and build new schools, and $100 billion to expand and improve power lines and the electric grid.

Another $180 billion is for expansion of research and development, particularly directed at competition with China in areas like semiconductors, batteries and computer technology. Much of the transportation money has a similar purpose. There is a combined total of $174 billion in spending to boost the electric vehicle market, including building 500,000 electric charging stations across the country, to “win the EV market,” a campaign directed at Europe and Japan as well, but above all against China.

Biden’s Press Secretary Jen Psaki emphasized the anti-China basis of the plan, telling reporters Tuesday, “Fundamentally, we don’t believe that making a historic investment in American workers and rebuilding our infrastructure across the country to help us compete with China is controversial.”

The final outlines of the plan were drafted by two of the most right-wing figures in the White House: National Economic Council Director Brian Deese, a longtime Wall Street hand, and Domestic Policy Council Director Susan Rice, who was national security advisor in the Obama administration and a fervent advocate of imperialist aggression in the Middle East and confrontation with Russia and China.

White House officials were at pains to emphasize that unlike the $1.9 trillion economic stimulus bill passed last month, there was room for major changes and amendments to the American Jobs Plan as it goes through Congress. This suggests that while there is likely to be bipartisan support for much of the brick-and-mortar spending—which amounts to subsidies to construction companies and giant corporations—the money to be spent on programs like home health care for the elderly could well be sacrificed.

Even more significant is how Biden proposes to pay for the spending outlined in the plan. He has rejected calls by Senator Elizabeth Warren and other liberal Democrats for a wealth tax that would target those with more than $50 million. The White House also rejected a proposal by Senator Bernie Sanders to raise the corporate tax from 21 percent back to the 35 percent level that prevailed until the 2017 Trump tax cut.

Instead, Biden will propose raising the corporate tax rate from 21 percent to 28 percent, in effect leaving the corporations with half of the Trump tax cut (and, of course, far more than that once their tax advisers and lawyers figure out how to evade the new rules). If they were honest, the White House spin doctors should perhaps revise Biden’s campaign slogan of “Build Back Better” to something closer to the reality: “Build Back Halfway.”

White House officials claimed that there would be a second round of tax hikes on the wealthy to finance a second round of spending on “social” infrastructure, including education, health care and other services, which will be unveiled next month. This legislation, initially pegged at $1 trillion, would be paid for by an increase in the income tax rate on wealthy households, those making more than $400,000 a year.

Press reports of Democratic Party strategy suggest that Biden and Senate Majority Leader Charles Schumer regard it as unlikely they can win the ten Republican votes in the Senate required to overcome a filibuster. This means that the infrastructure plan would have to pass under the reconciliation process, requiring only 50 votes plus the tie-breaking vote of Vice President Kamala Harris.

There is only one reconciliation vote for each fiscal year, since the arcane procedure is ostensibly tied to the passage of the annual budget. Schumer has been reportedly considering either a second reconciliation bill to “amend” the bill passed last month for the 2021 fiscal year, or using the budget for fiscal year 2022, which begins October 1, as the basis for the infrastructure bill.

There will be considerable horse-trading and wrangling between the two capitalist parties. In the meantime, the Republicans have rubber-stamped Biden’s cabinet, allowing all his nominees to head federal departments to win approval. In return, the Democrats have effectively shelved any investigation into the January 6 coup attempt by Trump and his congressional Republican allies to seize the Capitol and block the certification of Biden’s victory.

Australian government announces missile building program as US steps up war drive against China

Oscar Grenfell

Prime Minister Scott Morrison yesterday announced that his government would begin a $1 billion program to build missiles in Australia, for the first time since the 1960s, in close collaboration with the US administration of President Joseph Biden.

The project was foreshadowed last June, when Morrison’s government unveiled a massive $270 billion spend on military hardware over this decade, taking total military expenditure to $575 billion in the next 10 years. At the time, emphasis was placed on the acquisition of missiles and other strike capabilities from abroad, including the purchase last year of 200 long-range, anti-ship missiles from the US.

US soldiers mount a refurbished nuclear warhead on to the top of a Minuteman III intercontinental ballistic missile. [Credit: AP Photo/Eric Draper]

Yesterday, however, the government declared that it would “accelerate” the creation of a “Sovereign Guided Weapons Enterprise.” This would encompass the establishment of a missile production facility and other military hardware development, spelt out in a “Defence National Manufacturing Priority roadmap,” which also calls for the construction of unmanned drones.

A government press release, detailing the plans, pointed to the dangers of supply chain disruptions, stemming from events such as the COVID-19 pandemic, and escalating trade war conflicts as motivating factors for the haste of the project, as well as what was vaguely described as a “changing global environment.”

Defence Minister Peter Dutton, who was only installed in the post this week, as part of a broader Cabinet reshuffle, was more explicit. “The manufacturing and supply of weapons in Australia will not only benefit and enhance our ADF operational capacity, but will ensure we have adequate supply of weapon stock holdings to sustain combat operations if global supply chains are disrupted,” he stated.

In other words, the project is part of preparations for a major war, and not in the distant future. The clear target is China.

In the first two months of his presidency, Biden has ratcheted up a conflict with Beijing, which was initiated by Obama and further accelerated under the Trump administration. Biden is inflaming regional flashpoints, especially Taiwan, waging a hypocritical campaign over Chinese human rights violations and engaging in “alliance building” aimed at furthering the encirclement of China.

Over recent weeks, this has included a push by the US for the stationing of offensive missiles, previously banned by the Intermediate Range Nuclear Forces (INF) Treaty, within striking distance of China, including in Japan and Taiwan. Biden officials have also hailed Taiwan’s initiation of its own missile building program, at the same time as they have forecast a possible war between China and the island state within the next five years.

Dutton’s comments made clear that the Australian missile build is part and parcel of this broader offensive.

The latest announcement, he said, flowed out of AUSMIN talks last July, between Australian government ministers and top US representatives, including Trump’s anti-China hawk Mike Pompeo, who was then secretary of state. And now, Dutton stated, “We will work closely with the United States on this important initiative to ensure that we understand how our enterprise can best support both Australia’s needs and the growing needs of our most important military partner.”

Morrison formally launched the program at US arms manufacturer Raytheon’s Joint Centre for Integration in Adelaide. He also announced a $111 million “sustainment” fund for the US company, which is preparing to produce its own National Advanced Surface-to-Air Missile System in Australia, as part of a separate project.

To signal the speed of the missile build, Morrison declared, “we are bringing 2045 forward to now.”

Those corporate journalists present did not ask a single question about the purpose of the project or the danger of war, but focused entirely on repeatedly demanding to know where the new facility would be located. This was in line with the government’s attempts to present the planned missile facility as a driver of “job creation,” even though ministers have stated that a maximum of 2,000 people, most with expertise in the weapons sector, will be given employment.

Morrison, however, volunteered the broader agenda, declaring, “we have augmented what our broader strategic outlook is, and that involved bringing forward the capability for longer-range strike and that’s what this capability is about.” This was part of a “coordinated and comprehensive plan” that “meshes together with our alliance partners as well, particularly the United States…”

The PM placed the missile project in the context of recent steps towards formalising the “Quad,” a de facto alliance of the most powerful militaries in the Pacific, the US, Japan, India and Australia, directed against China. In US and Australian think-tanks, the consolidation of the alliance is presented as a key step towards preparing for conflict.

Arms companies, including Raytheon and BAE will now bid for a government contract for the facility, which is slated to produce long and medium-range missiles, and could transition to the next generation of weapons in the sector. Australia has already partnered with the US to test and develop air-launched hypersonic cruise missiles, that fly eight times faster than the speed of sound.

The missile project and its implications have received scant attention in the official press. This is all the more striking, given the description of the plan by Greg Sheridan, the foreign editor of the Murdoch-owned Australian newspaper, who has extensive connections to the US and Australian military and intelligence establishments.

Sheridan this morning insisted that, “The Morrison government’s decision to establish a missile manufacturing industry is one of our nation’s most important strategic decisions in decades.” It was necessary to be “watchful of the distance between announcement and delivery,” but for the first time in fifteen years, the defence ministry was proceeding with “real urgency.”

The project, Sheridan stated, increases Australia’s “ability to hit any potential enemy and to keep it at a distance, and our ability to support the US militarily if necessary in this region.”

Sheridan called for the government to press ahead with its crisis-ridden project of building 12 Attack Class submarines, but made clear that he was forecasting conflict far-sooner than 2034, when they are slated to be operational. “Bureaucrats and certain types of military planners are always dreaming of technology two generations away, because they have no sense at all that they could face a crisis tomorrow,” Sheridan wrote.

In an article a week ago, which was clearly part of the discussion leading up to the announcement, Sheridan advocated a rapid build-up of military capabilities for imminent war. “[L]ast year the government announced we were going to buy from the 200 US long-range anti-ship missiles. That’s a good purchase. But it’s a tiny number. If a conflict starts at 9am on a Monday, 200 missiles should get us through to morning tea on Thursday. After that we’re stuffed.”

Representatives of the Australian Strategic Policy Institute, a hawkish think-tank funded by the Australian and American governments and arms manufacturers, also welcomed the announcement. One was asked on 3AW Radio whether there would be a war between China and Taiwan within five years, responding that this was probable, adding: “If the United States then intervenes to assist Taiwan, it would be highly likely that Australia would assist the United States in that scenario.”

The Labor Party opposition fully supports these plans for a catastrophic war, with its leader Anthony Albanese declaring yesterday: “Australia does need to be more resilient when it comes to our defence, and this announcement is part of that. This is a bipartisan issue.” At its just concluded national conference, Labor passed a series of resolutions, denouncing China and promoting the pretexts for US-led aggression against it.

It was the Labor government of Prime Minister Julia Gillard, who, in 2011, placed Australia on the frontline of the US war drive against China. Gillard hosted Obama, as he announced the “pivot to Asia,” which included a massive US military build-up in the Asia-Pacific, from the floor of the Australian parliament. She signed a series of agreements, including for the establishment of a new US military base in the northern city of Darwin.

Australia is to play a crucial role in a US conflict with China, centring on cutting off Chinese supply lines that pass through the sea lanes of South East Asia and the Pacific, and operating as a “southern anchor” for US offensive operations against the Chinese mainland. The missile program is part of those strategic plans.

These preparations, which have the support of the entire political and media establishment, are being conducted behind the backs of the population.

For the past six weeks, official Australian politics has centred on diversionary sexual misconduct scandals, involving the Morrison government. Corporate journalists have poured over the details and sharply condemned the response of the government to the various allegations. Not one of them has voiced a word of opposition, or even criticism, over the increasingly evident preparations for war.