Biden’s $1 trillion budget for world war

Patrick Martin

President Joe Biden speaks about his 2024 budget proposal at the Finishing Trades Institute, Thursday, March 9, 2023, in Philadelphia. (AP Photo/Evan Vucci)

The White House unveiled its budget request for the 2024 fiscal year Thursday, with the largest ever proposed spending on the military. It is a $1 trillion budget for world war. The Biden administration wants the resources to fight Russia in Ukraine, intensify its buildup towards war with China in the Far East and sustain US military aggression in the Middle East. 

Besides $842 billion for the Pentagon, which will undoubtedly be pushed even higher in Congress, there is $24 billion for the Department of Energy, which maintains the US nuclear arsenal, and $20 billion for military-related programs in the State Department, CIA and other agencies, bringing the total official military spending to $886 billion.

To this must be added the real cost of the war in Ukraine, which is listed as only $6 billion for the 2024 fiscal year, which begins October 1. In the previous fiscal year, the Biden administration requested $6.9 billion but ended up spending $114 billion. Given that there is no sign of the war ending—on the contrary, it is escalating rapidly—the cost of US support for the otherwise bankrupt regime in Kiev is likely to surpass the current level. This would swell total military outlays well above the $1 trillion mark.

Since Biden took office, the budget for the Pentagon alone has jumped from $718 billion in fiscal 2022, the first full year of his administration, to $816 billion last year. The $842 billion requested for this year could rise past the $900 billion mark once Congress and lobbyists for the weapons manufacturers have their say. Congressional Republicans have already denounced the budget for providing too little funding for the military.

The name “Department of Defense” is itself a gross distortion since there is not an inch of American soil that needs to be defended against an external enemy. It is rather the world which is under threat from the Pentagon. The US government maintains a global military presence without precedent in history, with more than 700 US bases worldwide, compared to one each outside their own borders for its main targets, Russia and China.

The department should be renamed the Department of Maintaining America’s Global Empire, or perhaps more simply, the Department of World Destruction. Some $38 billion of the Pentagon budget will go to nuclear weapons modernization, bringing the total spending this year on the US nuclear arsenal, to carry out the worldwide annihilation of civilization and perhaps all life on the planet, to more than $60 billion.

Much of the “non-military” budget also contributes to the US capacity to wage war around the world. One White House statement declares that the budget “invests in key technologies and sectors of the U.S. industrial base such as microelectronics, submarine construction, munitions production, and biomanufacturing.” It also includes “the recapitalization and optimization of the four public Naval Shipyards to meet future submarine and carrier maintenance requirements.”

Much of last year’s $250 billion CHIPS Act was funding routed through the Department of Commerce to underwrite the transfer to the United States of production of key semiconductor chips that are vital for high-tech weapons.

The Energy Department budget will support “the strong technical and engineering foundation” for the anti-China AUKUS agreement between the United States, Australia and the United Kingdom. Biden will host British Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese at an AUKUS summit in San Diego on Monday.

There are billions more in the budget for police repression, including $25 billion for Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE), and $14.5 billion for other anti-immigrant activities of the Department of Homeland Security, including immigration courts and the vast network of detention facilities. Tens of billions more go to the FBI and other Justice Department agencies, and in grants that go directly to state and local police departments.

Military violence and police repression constitute the bulk of the $1.7 trillion in discretionary spending, the amount that Congress must authorize and appropriate each year, as opposed to automatic outlays from the Treasury for interest payments and entitlement programs like Social Security, Medicare and Medicaid.

The budget request issued Thursday by the Biden administration is a political perspective, not just a spending plan. It is shared by both capitalist parties, Republican and Democrat, whatever their tactical differences about where and how much to spend. American imperialism seeks to maintain its global domination, and it is now focused on defeating what it regards as its main adversaries, Russia and above all China.

The proxy war against Russia in Ukraine is only the antechamber to an even greater conflict with China, which now takes the form of a rapid military buildup towards what one top general suggested would be open warfare by 2025. The corporate media is doing its part to suppress popular opposition to these wars, seeking to shift public opinion with a propaganda blitz over Russia’s reactionary invasion of Ukraine, and whipping up hysteria over alleged Chinese “spy balloons” and the social media app TikTok, depicted as a nefarious scheme by Beijing to collect intelligence on ordinary Americans.

It was noteworthy that in Biden’s first campaign-style appearance to “sell” his budget to the public, he made no mention of military spending, instead greatly exaggerating the level of spending on health care, education and other social welfare programs, which will inevitably be slashed rather than increased in the course of budget negotiations with the Republicans. 

This was accompanied by populist demagogy over proposals to raise taxes on corporations and the super-rich, which he knows will go nowhere in Congress. The White House could not get a few hundred billion in tax increases on the wealthy through a Democratic-controlled Congress in 2021-2022. To suggest that a Republican-controlled House of Representatives will pass $5 trillion in such levies on the financial aristocracy is a blatant lie.

Biden proceeds like a crude carnival barker, holding up the shiny objects of tax increases for the wealthy and increases in social spending, which are popular among working people, to distract from the real essence of his program, which is to continue and escalate the war with Russia in Ukraine and to prepare the impending war with China.

This is the central axis of the policies of the Democratic Party, a party of Wall Street and the military-intelligence apparatus, which has long ago abandoned any genuine connection to policies of social concessions to working people. Biden’s only dispute with the Republicans is over whether to target Russia or China first. But this conflict is secondary. Both parties uphold the worldwide interests of the American oligarchy.

Demise of crypto firm FTX brings down a bank

Nick Beams

The demise of Sam Bankman-Fried’s crypto firm FTX and his associated company, Alameda Research, has claimed its first banking system victim with the announcement by the San Diego-based Silvergate Capital on Wednesday it was ceasing operations and going into liquidation.

Slivergate CEO Alan Lane, second from right, is applauded as he rings the New York Stock Exchange opening bell before his bank's IPO begins trading, Thursday, Nov. 7, 2019. [AP Photo/Richard Drew]

The collapse of the bank is significant because it was a major conduit for the flow of funds into the crypto market from the regular financial system. According to the Federal Deposit Insurance Corporation, it is the first bank failure since 2020 when four banks went under.

And it may not be the last. According to Hilary Allen, a law professor at American University who has testified before Congress on FTX, the Silvergate collapse could put “even more pressure on banks to demonstrate that their dealings with crypto are safe and sound.”

The crypto world has assiduously promoted that claim, that it is independent of and an alternative to the banking and financial system. The rapid rise of Silvergate and now its precipitous decline is a further exposure of this fiction.

Announcing the decision to cease activity and try to repay its depositors, the company statement said: “In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of bank operations and a voluntary liquidation of the bank is the best path going forward.”

The most significant “recent” industry development leading to its demise was the collapse at the end of last year of Bankman-Fried’s crypto empire which, as he himself even made clear, was essentially a Ponzi scheme dependent on the continued inflow of money.

Silvergate was an essential component of this mechanism. In a statement issued before his operation collapsed, when he was touted as the poster boy for crypto, Bankman-Fried wrote in a comment, prominently featured on Silvergate’s website: “Life as a crypto firm can be divided up into before Silvergate and after Silvergate. It’s hard to overstate how much it revolutionised banking for blockchain companies.”

In the wake of the liquidation announcement, there was a round of tut tutting.

Democrat Senator Sherrod Brown, the chair of the Senate Banking Committee said: “Today, we are seeing what can happen when a bank is over-reliant on a risky, volatile sector like cryptocurrencies. When banks get involved with crypto, it spreads risks across the financial system and it will be taxpayers and consumers who pay the price.”

Democrat Senator Elizabeth Warren, always eager to pose as a defender of consumers, tweeted that Silvergate’s activities had been “risky, if not illegal” and claimed the failure was “disappointing but predictable.”

If that was the case, then the question immediately arises: why was nothing done?

Silvergate was not some fly-by-night operation. Its move into banking for crypto, which started in 2013 but then accelerated after 2016, was approved by the US Federal Reserve.

According to Silvergate president Ben Reynolds, in comments cited by the Financial Times (FT) back in December Alan Lane, the chief executive and mastermind of the crypto strategy, “started seeing that companies like Coinbase were getting kicked out of banks” and saw an opportunity.

“Alan went to the Federal Reserve and said we want to provide basic banking services to Bitcoin companies and they said OK.”

Besides being regulated by the Fed, Silvergate was listed on the New York stock exchange.

The story of the rise and rise of Silvergate is an expression of processes throughout the US financial system, developing over many years, but intensified by the pumping in of trillions of dollars of ultra cheap money into the financial system by the Fed after the financial crisis of 2008, and then further accelerated with onset of COVID-19 in 2020.

Silvergate began as a small lender financing small real estate deals in southern California and holding less than $1 billion in assets. After its major turn to crypto in 2016 it surged. By 2019 it had become the largest crypto currency bank in the US with 1600 major operators in the crypto world using it to shift billions of dollars a month.

As clouds began to gather over Silvergate, following the demise of FTX at the end of 2022 and the charging of Bankman-Fried with criminal offences, the FT reported last December: “Deposits surged from roughly $2 billion in 2020 to more than $10 billion in 2021. By this year (2022), total assets had leapt to $16 billion. Barely 10 months after listing on the New York stock exchange at the end of 2019, at $12 a share, Silvergate’s share price had climbed to more than $200.”

The article characterised its rise, in the words of a former employee, as “a tiny real estate lender that went all-in on crypto.”

But this is much too narrow a focus. Silvergate’s rise is not the story of one little firm that got too big, but was an outcome of the $4 trillion poured into financial markets after the market freeze of March 2020, which sent Wall Street to record highs as well as the major crypto currency, Bitcoin.

After the FTX collapse, money started leaving the bank. In January it was reported that customers had withdrawn more than $8 billion, forcing Silvergate to sell securities, incurring a loss of $718 million, far exceeding the total profit it has made in the previous 10 years.

With the collapse of Silvergate attention is naturally turning to the position of other banks, not only those involved directly in the crypto market but others that cashed in on the Fed’s cheap money regime and whose position has been weakened as a result of continuing interest rate hikes.

The same day as the Silvergate demise was announced, the Silicon Valley Bank launched a more than $2 billion share sale to try to shore up its position which has been hit by losses on Treasury bonds and mortgage-backed securities, whose prices fall as interest rates rise.

The bank has lost around $1.8 billion on the sale of some $21 billion worth of securities. It has also been hit by the cash shortages of start-up companies it has financed in the high-tech sector. Of the three major Wall Street indexes, the tech-heavy NASDAQ has suffered the biggest decline.

Yesterday, shares of SVB, the parent of Silicon Valley Bank, fell more than 60 percent as part of a broader market decline in which the four biggest banks saw $47 billion wiped off their market value.

One of the issues which arises from the Silvergate liquidation is that assurances from endangered companies that their position is “sound” are generally worthless.

As FTX tanked at the end of last year, Silvergate CEO Lane issued a public letter saying short sellers were spreading “speculation” and “misinformation” and the bank had conducted “significant due diligence on FTX and its related entities.” Less than three months later the bank was liquidated.

The rise and fall of Silvergate is not a history of a company that got too big, but rather of how the policies of the Fed in supplying trillions of dollars of essentially free money created a financial minefield, sections of which are now starting to blow up.

Danish parliament votes to abolish public holiday in order to finance military spending increase

Jordan Shilton

Denmark’s coalition government of the Social Democrats and two right-wing parties rammed a proposal through parliament last week to abolish a public holiday so as to secure additional funding for the country’s armed forces. The campaign to scrap the public holiday has gone hand-in-hand with a massive propaganda campaign to portray Denmark as under immediate threat from a Russian attack and therefore forced to arm itself to the teeth.

Mette Frederiksen [Photo by Sandra Skillingsås / CC BY-ND 4.0]

Prime Minister and Social Democrat leader Mette Frederiksen repeatedly declared in the lead-up to the vote that the decision to abolish great prayer day (store bededag), which has been a public holiday in Denmark since the 17th century, was necessary due to “war in Europe.” Speaking after the parliamentary vote, she declared that the decision was appropriate given the “security policy situation,” and would allow the government to spend more on defence.

The proposal was introduced last December in the coalition agreement for the current Social Democrat/Liberal/Moderate government. Negotiations on the agreement lasted for well over a month following the November 1 general election and resulted in the first coalition government between parties from the traditional “left” and “right” blocs in over four decades. While the Social Democrats have long led the “left” or red bloc, the Liberals are Denmark’s largest right-wing party. The Moderates are a new creation of former Liberal Prime Minister Lars Loekke Rasmussen, a close ally of Anders Fogh Rasmussen, who supported the war in Iraq and went on to become NATO secretary-general with backing from the United States.

The government claims it can save 3.2 billion kroner (about €400 million) by adding a day to the working year. Some 700 million kroner of this total will be raised by annulling an automatic increase in state benefits in 2026, rather than increasing them in line with the 0.45 percent pay rise workers will receive to compensate for having to work an extra day. This freeze will hit pensioners and students, among others. The money is intended to help the government reach the NATO target of spending 2 percent of GDP by 2030, three years ahead of the timetable agreed by the Social Democrat minority government and several opposition parties immediately after Russia’s invasion of Ukraine.

The move remains deeply unpopular and was never raised during last year’s election campaign. On 5 February of this year, a demonstration of 50,000 people in Copenhagen, the largest demonstration in the capital in over a decade, organised by the main trade union federation FH, protested the abolition of the public holiday. The sentiment dominating the demonstration was that workloads in the public sector were already so great following decades of austerity that the loss of a holiday was intolerable.

During the intervening month, a systematic effort to whip up militarism and portray Denmark as a frontline state under immediate threat of attack has been under way. On 15 February, the Danish government announced it would participate in the European Sky Shield Initiative, a German-led plan for continent-wide air defence systems. While initial focus will be on short- and medium-range surface-to-air missiles, reports noted that ballistic capabilities could be added in the future, i.e., the capability to fight wars with nuclear weapons.

Over the weekend, public broadcaster DR carried a prominent report on a military exercise by the Home Guard, a division of the armed forces consisting primarily of volunteers, on the island of Bornholm, in preparation for a Russian invasion. Bornholm lies in the Baltic Sea and is Denmark’s most easterly point. The as yet unexplained destruction of the Nord Stream pipeline, which veteran journalist Seymour Hersh exposed as a US-led operation, took place a few kilometers off the Bornholm coast.

The Royal Danish Air Force is currently involved in joint exercises with the US. The manoeuvres, scheduled to run from 6 to 16 March, involve Lockheed Martin’s F-35 fighter jet, which is due to replace Denmark’s fleet of F-16s in stages over the next three years. Lars Loekke Rasmussen’s Liberal government agreed to the purchase of 27 F-35s in 2016 at an estimated cost of €2.8 billion, making it the largest single defence purchase in Denmark’s history.

Denmark currently spends around 1.4 percent of its GDP on defence. To hit the 2030 target, defence spending will need to grow by close to 50 percent, when economic growth is taken into account. To fund this major hike, the government is planning a comprehensive attack on public spending and moves to increase labour productivity.

Two days after last Tuesday’s parliamentary vote to abolish the public holiday, the government tabled a plan to reform master’s degree programmes at Denmark’s universities. The reform will see half of all master’s degrees cut from two years to one, with most of those impacted expected to be in the social sciences and humanities. A heavier focus will be placed on vocational degrees and other forms of training. One of the goals of the reform is to increase overall labour market participation by 6,000 workers.

There is no principled opposition to the undermining of workers’ social and democratic rights to pay for the militarisation of society. Several parties voted against the proposal to scrap store bededag in parliament and backed the protests, including on the “left” the Socialist People’s Party and the Red-Green Alliance, and, on the right, the Conservatives and Liberal Alliance, the far-right Danish People’s Party and Denmark Democrats, and the New Right. But they have all endorsed in one way or another increased military spending and back the US-led war on Russia.

The Socialist People’s Party (SF) supported the initial defence agreement from March 2022 that committed Denmark to reaching the 2 percent target for defence spending by 2033. Frederiksen’s minority Social Democrat government was only in a position to lead the talks on that deal because SF and the Red-Green Alliance (RGA), known as the Unity List in Danish, secured a parliamentary majority for the Social Democrats between 2019 and 2022. The RGA is Denmark’s principle pseudo-left party, including among its members the Pabloite Socialist Workers Party. At its latest congress in May 2022, the RGA abandoned its call for a withdrawal from NATO.

As for the right-wing and far-right parties, their main criticism was that the abolition of store bededag was an attack on the church and on “Danish tradition,” and that savings should be found elsewhere to finance the military spending increase.

Recent events in Denmark are part of a more general trend across Europe. In neighbouring Sweden, the right-wing government, which relies on support from the fascistic Sweden Democrats to remain in power, is implementing a 64 percent hike in defence spending by 2028, which will be funded through attacks on public services and social spending. In France, mass protests have developed against President Emmanuel Macron’s drive to undermine workers’ pension rights so as to help fund a massive €400 billion investment in the military. In Germany, the Social Democratic-led government introduced the Bundeswehr (armed forces) special fund of €100 billion and is now preparing the way for even higher defence spending increases. Meanwhile, it slashed the health care budget by two-thirds in a single year and is in the process of imposing a below-inflation pay agreement on public-sector workers.

Ongoing warning strikes in Germany’s public sector

Gustav Kemper & Max Linhof

Public sector workers in several federal states in Germany have been continuing to take part in warning strikes since Monday. Like last week, strikes in Berlin, Saxony, Baden-Württemberg, Hesse and Mecklenburg-Western Pomerania affected refuse collection, hospitals, nurseries, public transit. On Wednesday, around 70,000 employees nationwide took part in the warning strikes in day care centers and social facilities.

A section of Tuesday’s demonstration in Berlin [Photo: WSWS]

While there is enormous anger and willingness to fight among workers, who are not prepared to accept further cuts to real wages, the service sector union Verdi is doing everything to prevent a broad mobilization. It is organizing the warning strikes strictly separately and with about as much impact as a pinprick. In the background, the union bureaucrats have long been working on a deal with the employers that will mean severe cuts to wages.

This became clear in Berlin, for example, where on Monday and Tuesday workers at the municipal cleansing service (BSR), the water utility company (BWB), many hospitals, the municipal nurseries and the job centres went on strike. On both days, Verdi had moved the two central strike rallies to outside BSR headquarters, which is so remote and hard to get to the public would not notice or be able to participate.

As a result, only 400 workers (mainly from BSR and BWB) came to the rally on Monday and just 250 on Tuesday. Even though there was a large presence of Verdi shop stewards and officials, conversations with ordinary workers revealed the enormous anger about the cuts in real wages, their willingness to fight and dissatisfaction with Verdi’s limited actions.

“The offer from the federal and local governments is laughable,” said one 40-year-old BSR worker, for example. “Five percent over three years, and apprentices are supposed to get just half.” Adding that this did not even begin to compensate for inflation, they said, “More are participating in the strike now, many service segments are coming together now.”

Nurse Marianne [Photo: WSWS]

In nursing, low wages are already leading to permanent understaffing on the wards, making work unbearable for the remaining staff. “At the moment, we have a minimum staffing of one registered nurse for every five patients, and often it is even more,” said Marianne, for example, who works as a nurse in the neurological early rehabilitation unit of the Jewish Hospital. There should be one nurse for three patients, she says, “then they could really be cared for in a patient-oriented way, the way they actually need it.”

“We are here to put more pressure on the upcoming negotiations, but I don’t have much hope that anything will happen,” says another health care worker. “Without a big strike, nothing will be achieved. Although there aren’t many of us here, it’s good that we now have strikers from many service segments, nurses from hospitals, refuse workers, Berlin water utility workers, educators, people from administration.”

WSWS supporters distributed the article “ Governments make provocative offer to German public sector workers ” and discussed the perspective of a Europe-wide strike and a socialist program against cuts in real wages and the pro-war policies of all governments.

The strikes in Germany are part of an explosive movement of the working class across Europe. In France, millions are striking against pension cuts; in Greece, hundreds of thousands have been striking and protesting amid a surge of anger over the deaths of 57 people in the February 28 train crash. In Britain, hundreds of thousands have been striking against wage cuts and attacks on the right to strike.

“It’s actually right that people should unite internationally,” Matti, a 25-year-old worker at the water company, said in response. “I’m not in the union,” he continued, “but I’m still striking today with my colleagues. I don’t want a representative who sits on the employer’s lap during negotiations and then presents us with a fait accompli. I noticed that during the last strike. The energy that is generated is dissipated in small actions. I’m of the opinion that if you’re going to go on strike, you have to use all your strength.”

A section of Monday’s rally [Photo: WSWS]

His colleague, Klaus, 35, also saw a clear connection between the cuts in real wages and the German government’s pro-war policy: “It is right when you say that the city administration is trying to save on wage costs in the public sector to compensate for the increased costs of the war in Ukraine. That’s been the case throughout history—workers are being asked to pay for the war. It’s the same in every country.”

Turkish bourgeois opposition names Kılıçdaroğlu presidential candidate amid earthquake disaster

Barış Demir & Ulaş Ateşçi

As Turkey goes to the elections amid the earthquake disaster, the bourgeois opposition coalition named “Nation Alliance” (Table of Six) has chosen Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu as President Recep Tayyip Erdoğan’s opponent in the presidential elections.

Kemal Kılıçdaroğlu [Photo by Cumhuriyet Halk Partisi / CC BY 3.0]

After the cabinet meeting on Monday, Erdoğan announced they would take “an election decision on Friday, March 10, based on the authority granted by the Constitution” to hold presidential and parliamentary elections. The proposed date is May 14. Although Erdoğan had already announced his candidacy, he is in fact constitutionally barred from seeking a third term in office.

While the bourgeois and pseudo-left parties are starting to focus on the election agenda, millions are still grappling with the disastrous consequences of the earthquake, and the devastation caused by the government’s failure to enforce safety regulations despite scientists’ warnings.

After the devastating February 6 earthquakes in Turkey and Syria centered in Kahramanmaras, the total death toll in the two countries has reached 55,000. The real toll is thought to be over 150,000. This historic disaster, which directly affected tens of millions of people, came on top of a deepening cost of living crisis and growing class struggles in Turkey and internationally.

In Turkey, where real annual inflation has long been above 100 percent, and nearly 90 percent of the population lives below the poverty line, class tensions have intensified in the wake of the recent earthquake disaster. All factions of the ruling class agree that a social explosion must be prevented or suppressed at all costs.

Kılıçdaroğlu’s candidacy comes in this context, after a political crisis brought his “Nation Alliance” to the brink of disintegration. At a meeting last week, members of the six-party alliance, with the exception of the far-right Good Party, agreed that the leader of the CHP, the largest party in the alliance, should be its presidential candidate.

Good Party leader Meral Akşener left the table demanding the Nation Alliance run Ekrem İmamoğlu or Mansur Yavaş, the candidates who won the 2019 local elections in Istanbul and Ankara, defeating candidates of Erdoğan’s Justice and Development Party (AKP). CHP Istanbul Mayor İmamoğlu and Ankara Mayor Yavaş rejected Akşener’s call, however, supporting Kılıçdaroğlu’s candidacy. In 2019, both İmamoğlu and Yavaş had been backed by the main pseudo-left parties.

After closed-door negotiations, an “interim solution” was agreed upon: İmamoğlu and Yavaş became vice presidents, and the six parties met again on Monday, with the Good Party present. On Monday evening, in front of the headquarters of the Islamist Felicity Party in Ankara, the party leaders announced Kılıçdaroğlu’s candidacy and the 12-point “Roadmap for the Transition to a Strengthened Parliamentary System.”

Leaked reports imply that the candidacy crisis may have been caused by factions of the ruling elite, such as the construction oligarchs, who were massively enriched under Erdoğan’s government, seeking assurances from Akşener as part of a possible new government.

Ultimately, the promotion of the Nation Alliance reflects the desire of the US and European imperialist powers and powerful sections of the Turkish bourgeoisie to replace Erdoğan with a more loyal and controllable government amid NATO’s war against Russia and growing class struggles. The Good Party broke away from Erdoğan’s ally, the fascistic Nationalist Movement Party (MHP), after the NATO-backed coup against Erdoğan on July 15, 2016. This was the basis of its alliance with the CHP.

There is a long history of significant conflicts between the Erdoğan government and its US-led NATO allies. Tensions stemming from critical geopolitical disagreements, notably Ankara’s improving ties with Moscow amid US preparations for war against Russia last decade, erupted during the failed coup attempt in 2016.

These tensions have only increased since then. The Erdoğan government represents a faction of the Turkish bourgeoisie, which is deeply tied to imperialism, but it has not fully supported NATO’s war escalation against Russia. It is embroiled in an ongoing dispute to oppose the admission into NATO of Sweden and Finland, who have given limited indications of support for Kurdish nationalists even as Ankara prepares another major military offensive against US-backed Kurdish nationalist militias (YPG) in Syria.

Significantly, in an interview with the New York Times before the 2020 elections, US President Joseph Biden openly declared his support for the bourgeois opposition alliance against Erdoğan. It is no coincidence that Kılıçdaroğlu, now the official candidate of the “Nation Alliance,” has traveled to major NATO countries such as the US, the UK and Germany in recent months, meeting with top members of the political and financial elite.

The “road map” announced by the Nation Alliance does not pretend to present any solution to the fundamental democratic and social problems facing millions of working people. It focuses on how to share the positions of the bourgeois ruling apparatus, such as the vice presidency and the distribution of ministries. Moreover, this alliance, though it claims to “defend democracy,” does not even object to Erdoğan’s unconstitutional candidacy.

The Nation Alliance speaks, first and foremost, for a faction of the ruling class oriented towards NATO and the European Union. Moreover, it is an alliance including openly right-wing parties, just like the rival AKP-MHP “People’s Alliance” led by Erdoğan.

In addition to the CHP, the Nation Alliance includes the far-right Good Party, which broke away from the MHP; the Islamist Felicity Party, from which the AKP emerged; and the Future Party of former prime minister Ahmet Davutoğlu and the DEVA party of former economy and foreign minister Ali Babacan, which broke away from the AKP. The sixth member of the alliance is the Democrat Party, also a right-wing party.

The record of the parties in this alliance sharply demonstrates that it is no alternative to Erdoğan’s People’s Alliance, but a rival that is at least as hostile to the working class and basic democratic rights.

The Turkish pseudo-left tendencies play a destructive role, by presenting this right-wing, pro-imperialist alliance as a progressive alternative to Erdoğan’s reactionary government.

The Kurdish-nationalist Peoples’ Democratic Party (HDP), whose 6 million voters could well swing in the election results, has welcomed Kılıçdaroğlu’s candidacy and invited him for a private meeting.

Erkan Baş, the leader of the Workers’ Party of Turkey (TİP), a party of the HDP-led Labour and Freedom Alliance, with four deputies in parliament, posted on his social media account, “I congratulate the Presidential candidate of the Nation’s Alliance, CHP President Kemal Kılıçdaroğlu and wish him success.” The Left Party, part of a pseudo-left alliance called the Socialist Power Union, reacted the same way.

The Socialist Equality Group, the Turkish section of the International Committee of the Fourth International, rejects the hypocritical and reactionary fraud in which the pseudo-left parties enthusiastically participate. This bourgeois alliance, which includes the CHP, the traditional party of the Turkish bourgeoisie, as well as openly right-wing extremists and Islamists, is as hostile to the basic democratic and social aspirations of the working class and youth as the Erdoğan government.

The electoral policy of the pseudo-left, based solely on Erdoğan’s defeat, serves to drive the masses behind another right-wing faction of the bourgeoisie and distract them from the revolutionary struggle, in conditions where the rising cost of living and unbearable living conditions in the wake of the COVID-19 pandemic and NATO’s war against Russia are pushing the working class into growing struggles all over the world.

Labor government plans biggest-ever restructuring of Australia Post

Jim Franklin

On March 2, federal Finance Minister Katy Gallagher and Communications Minister Michelle Rowland announced the start of a “community consultation process” on a major proposed reorganisation of Australia Post (AP).

CWU National President Shane Murphy with Michelle Rowland, the current federal communications minister, at an Australia Post Distribution Centre in May 2022. [Photo: CWU Central]

What is being discussed by AP management and the top echelon of the Labor government is the most dramatic restructuring of the state-owned postal service in its 214-year history. It would result in the destruction of thousands of jobs and drastically reduce services to the community.

Among the measures under consideration is a reduction in letter delivery frequency from five days a week to once or twice. This would require legislative change to remove the current requirement for AP to serve 98 percent of Australian addresses every business day. Also up for discussion is a substantial increase in the cost of postage.

Following the announcement, the Communications Workers Union (CWU) told members in an email it would make a submission to the government, demanding that any changes to AP must “enhance our community services” and “provide quality, secure jobs.”

No postal worker should be fooled by these weasel words. The fact is, the CWU bureaucracy has been involved in these discussions for months, behind the backs of workers, and is already playing the leading role in implementing the initial stages of the restructure.

Last month, the union’s top bureaucrats, together with AP management, visited depots to tell workers about a trial of a proposed new delivery model, which will take place at the Hornsby facility in New South Wales from April to June. While the meetings were called by management, the union bosses did all the talking, delivering the news in order to shut down opposition from workers to the changes.

The CWU confirmed these plans in a March 1 email, timed to reach workers’ inboxes ahead of the widely reported government announcement. The new model being trialed will recast and expand “beats” (delivery routes) served by Electric Delivery Vehicles (EDVs), motorbikes and pushbikes.

At the Kingsgrove workplace meeting, CWU secretary Shane Murphy told workers that beats would be expanded by as much as 50 percent, although this figure was not included in the email.

CWU National President Shane Murphy addresses Australia Post workers at Kingsgrove, NSW on January 24, 2022 [Photo: CWU Central]

Ordinary letters and junk mail will be delivered to half the beat on alternate days, while parcels, large letters and priority mail will continue to be delivered each day along the entire route.

The approach is not new. Under the Alternative Delivery Model (ADM), a failed restructuring attempt introduced in mid-2020 under the phony pretext of COVID-19 safety, workers were given two beats, which they delivered on alternate days, virtually doubling their workload overnight. The ADM could not have been implemented without the full support of the CWU, which, behind the backs of its members, signed a no-strike deal with AP management, preventing workers from legally taking action against the hated model.

Knowing that everyday delivery is a red line for postal workers, and determined to stifle opposition to the proposed model, Murphy insisted in the March 1 email that it is based on the “principle” of “one postie, completing one round, delivering five days per week.”

The reality is that the new model amounts to “ADM 2.0.” What functional difference is there between delivering half of a larger beat on alternate days and delivering one or the other of two smaller beats on alternate days?

The March 1 email explains that the Hornsby trial will be “monitored closely by a CWU Official from each State Branch of the Union.” Their primary concern will be to determine “whether efficiency can be achieved” and “any changes required to supporting infrastructure.”

In other words, an army of CWU bureaucrats from around the country will descend upon the Hornsby facility to ensure the trial proceeds smoothly, without interference from workers, and help management assess whether the new model will deliver the productivity increases demanded by management.

The email claims the union “has secured important job security commitments—ensuring that no job losses will occur.” Such “commitments” mean nothing. In the very next paragraph, Murphy admits that the new model will likely cause beats to be “impacted by potential efficiency gains,” i.e., some will be eliminated.

Murphy writes that, in this case, “members will be voluntarily redeployed to a permanent role based on parcel delivery duties.” In other words, should your beat be broken up and redistributed, you will be shunted to “parcel delivery duties,” possibly in a different facility. If you disagree, you will be shown the door.

The CWU and AP management know from the experience of the ADM that the introduction of more onerous working conditions, along with forced retraining and relocation, will prompt many postal workers to leave “voluntarily.”

The planned restructuring goes much further than the ADM and will have a devastating impact on Australia Post workers. Labor, in close collaboration with the Communications Workers Union (CWU), is seeking to do what previous Liberal-National governments could not: Permanently remove the regulations standing in the way of long-running efforts to degrade letter mail and transform AP into a highly profitable parcel delivery service.

AP management and the government claim this is necessary because of the decline in the letters business. According to figures in AP’s half-yearly financial report the number of letters delivered has declined 66 percent since its peak in 2008. Despite the result in the letters business, AP still posted a before-tax profit of $23.6 million, off the back of parcel revenue of $3.8 billion. Senior AP executives collected bonuses totaling $28 million in 2022.

Ultimately, the restructuring operations are directed at preparing AP for full or partial privatisation. While the Labor government denies this, AP CEO Paul Graham made clear in a recent interview with the the Australian Financial Review that “all options are on the table.”

The CWU leadership is fully prepared to enforce this, just as it did at Telstra, the formerly government-owned telecommunications service, resulting in the destruction of thousands of jobs.

AP workers must take a sharp warning. The Labor government’s “consultation process” and the proposed new delivery model are just the beginning of the next assault on jobs and conditions.

This is an international process and Australian postal workers confront the same attacks as their counterparts overseas. The surge in parcel profits experienced during lockdowns early in the pandemic has now plateaued with the removal of public health measures by governments worldwide. Mail carriers around the world are undertaking restructuring operations and are implementing harsh attacks on wages and conditions.

This has resulted in the outbreak of major struggles involving tens of thousands of postal workers in the UK, Germany and elsewhere. The response of the union bureaucracies has been to do everything possible to stifle and suppress workers’ opposition in order to ram through the cuts demanded by management.

Deepening debt and currency crises hit poorer countries

Nick Beams

A wave of economic devastation is sweeping across a growing number of poorer countries and so-called emerging markets as the result of spiraling inflation, interest rate hikes by the US Federal Reserve and other major central banks, and the surge in the value of the US dollar over the past year.

The most widely known case is Sri Lanka where a mass uprising last year drove out the Rajapakse government and where a new upsurge is now developing against the Wickremesinghe government. It is seeking to impose an International Monetary Fund austerity program to pay off the country’s debts to international finance capital by impoverishing the working class and toiling masses.

Sri Lankan port workers protesting against the newly increased PAYE income tax outside the entrance to Colombo port in Sri Lanka, Wednesday, March 1, 2023. [AP Photo/Eranga Jayawardena]

But the situation in Sri Lanka, where basic social services are increasingly no longer being provided, is being replicated in many other countries.

Such is the shortage of dollars, Bloomberg recently reported that international flights have been suspended in Nigeria, and car factories are being closed in Pakistan.

In Bangladesh power companies may have to halt production unless they receive dollars to buy fuel. Unless there is power, the irrigation of paddy field rice, the country’s staple food, cannot continue during the dry season.

As the Bloomberg report commented: “In some of the world’s most vulnerable developing nations, the situations on the ground are dire. Shortages of dollars and crimping access from everything from raw materials to medicine. Meanwhile governments are struggling with their debts as they chase rescue packages from the International Monetary Fund [IMF].”

As in Sri Lanka, that “struggle” consists in devising mechanisms to meet the rapacious demands of finance capital by imposing ever greater hardships on the working class, including those holding what have been considered to be middle class jobs, along with the urban and rural poor.

Financial analysts are predicting that the situation is only going to worsen.

John Marret, senior economist as the Economist Intelligence Unit in Hong Kong commented to Bloomberg: “These countries are mired in economic collapse, and some like Pakistan are teetering on the edge of another default. Major parts of their economies are struggling. The currencies are worth far less too.”

That situation is only going to worsen with the clear indication by the US Fed and other major central banks that rate increases will continue.

In Pakistan some factories have stopped production because they have run out of hard currency, principally US dollars, to pay for imports of raw materials.

Pakistan must meet around $7 billion in debt repayments in June and the prospect of a default is looming ever larger. Foreign reserves are plunging and the country, like so many others around the world, is being hit by the highest inflation in decades.

When it cut the country’s credit rating last week, Moody’s said that “in the current extremely fragile balance of payments situation, disbursements may not be secured in time to avoid a default.”

As a result of dollar shortages, the health situation, which was hit because of the refusal of major capitalist governments to pursue a policy of global elimination of COVID-19, is worsening everywhere with shortages of medical supplies.

More than 20 countries are seeking aid from the IMF and countries such as Pakistan have seen the value of their currencies plunge.

One of the biggest falls has been in the value of Ghana’s currency, the cedi, which dropped by 55 percent between January and October last year. This dramatically increased the price of all imported goods in terms of the domestic currency on top of the price hikes carried out because of the profit gouging by the giant global food and energy corporations.

The vice-like grip in which so many poorer countries are held is revealed in the overall debt levels, which escalated as a result of the pandemic.

In 2019, before the pandemic struck, the Institute for International Finance (IIF) calculated that the total debt burden for some 30 large low- and middle-income countries was $75 trillion. It leapt to $98 trillion by December last year with most of the increase coming in 2020 and 2021.

At the same time, there has been a major increase in government debt leading to restrictions in vital areas of social spending. According to the IIF, total government debt for the 30 selected countries reached almost 65 percent of gross domestic product at the end of 2022. That is an increase of 10 percentage points from pre-pandemic levels and the highest ever total.

Interest rates were very low in 2020–2021 as central banks pumped in trillions of dollars into the financial system, following the onset of COVID. But last year, in response to the rapid rise in inflation and the fear of the movement it would spark in the working class, they began interest rate hikes at the fastest rate in four decades.

One of the consequences was to increase the value of the US dollar, leading to a surge of inflation because so many international commodities are priced in dollars. The movements in currency markets means that even when the dollar price of some commodities began to fall in dollar terms, the inflationary surge continued in many countries because of the fall in the value of their currencies against the dollar.

A recent study by the Bank for International Settlements (BIS), published as part of its Quarterly Review this month, revealed an important shift in the operation of the global financial system, which is having a major international impact, particularly on poorer countries.

It found that in the past there tended to be offsetting movements in the price of commodities. That is, when prices went up, the value of the dollar tended to fall, and so importers were to some extent shielded from the effects of commodity price increases.

But this relationship has changed. Up until 2021 commodity prices and the value of the dollar tended to move inversely. Now they are moving together.

“Thus, the whole effects of commodity price and dollar gyrations on stagflation risks used to offset each other, they compounded each other in 2012–2022,” the BIS study said.

In the first weeks of this year there was speculation that interest rates may start to ease and the pressure on poorer countries and so-called emerging markets could lessen. But in the recent period, with the continuation of what the central banks refer to as “tight labour markets” in the major economies, there is not going to be a turnaround.

The pace of the interest rates hikes may lessen in some cases, but they are going to continue, intensifying the already intolerable conditions for the working class and oppressed masses in poorer countries who comprise major portions of the world’s population.

The necessity for a unified struggle of the working class against the entire profit system, embracing those in so-called advanced and less developed economies alike, is being hammered home in developing daily reality.

Australian “youth barometer” survey highlights growing poverty, precariousness

Sofia Devetzi

A report issued by Monash University has shed light on the increasing pressures faced by young people in Australia, including widespread financial precarity, underemployment, poor mental health and anxiety about the future. Bank accounts are so tight that over half of the youth surveyed went without eating for a whole day at some point during the past twelve months.

The 2022 Australian Youth Barometer—conducted by the Monash Centre for Youth Policy and Education Practice—examined the experiences of young people on a range of topics including the economy, working conditions, education, health and wellbeing, and civic participation. Researchers surveyed more than 500 people aged between 18 and 24, and interviewed another thirty.

2022 Australian Youth Barometer [Photo: Monash University]

The survey reveals that financial struggles are a common problem across all but the wealthiest demographic groups, with 90 percent of young Australians experiencing financial difficulties at some point in the past year. Many reported that they worked multiple jobs and still struggled to make ends meet; their situations were particularly precarious during extended periods such as work placements or exams, when they were unable to work.

Future economic prospects are regarded as bleak. More than half of the surveyed young people think they will be financially worse off than their parents, and only half believe that it is likely that they will achieve financial security in their future. Many cited barriers such as rising costs of living, housing unaffordability and a lack of stable and sufficient employment. Home ownership is regarded as increasingly beyond reach, and only 58 per cent of young people thought it is likely that they will live in a comfortable home.

The report found that working conditions have deteriorated for young people. Of those surveyed, 45 percent experienced unemployment at some point in the past year, while 61 percent experienced underemployment (that is, working fewer hours than they would like). In rural areas, these figures rose to 69 percent and 76 percent respectively. More than half of young Australians also reported earning income from gig work in the past year; Indigenous youth were particularly likely to have done so (78 percent).

As noted by the researchers, working in the gig economy often leaves already-vulnerable young people completely unprotected by even the inadequate employment laws that exist.

The substantial economic strain on young Australians means that many have gone without food at some points in the past year. The survey asked young people if there was a time in the past 12 months when they had run out of food and were unable to purchase more; a quarter responded in the affirmative. Such food insecurity affected even those with full-time jobs and from higher socio-economic backgrounds; many said they had not been able to afford food between pay cycles.

As one interviewee, aged 24, told researchers: “There have been quite a few times when I have been down to my last two or three dollars to last me a week and, most of the time, [that] means that I live off a loaf of bread and some two-minute noodles. Yes, I would say there have been times when I have not been able to eat the food I wanted, if any food at all.”

Another interviewee, aged 22, said, “I’ll have a week of being able to eat whatever I want to eat and then, you know, next week, I have no money, so I basically just have to live off bread.”

Young workers queuing outside an inner-western Sydney Centrelink office in early 2020. [Photo: WSWS]

The survey also revealed that at least once in the past year, due to lack of money, 68 percent of young Australians ate less than they thought they should, 67 percent were not able to eat healthy and nutritious food, 66 percent were hungry but did not eat, and 51 percent had to go without eating for a whole day.

The findings on mental health and wellbeing follow directly from the above indices. Almost one quarter (24 percent) of young people rated their mental health as poor or very poor, and the vast majority (85 percent) reported feelings of worry, anxiety or pessimism. Researchers found that 40 per cent of young people are worried about their ability to live a happy and healthy life in the future.

When asked which issues needed immediate action in Australia, the surveyed young people identified housing (61 percent), employment (47 percent) and climate change (46 percent).

Only a very small number said that they felt properly represented in political discussions; many pointed out a lack of input in decision-making processes and the fact that their concerns were not taken seriously in the political sphere. In a telling indictment of the current system, almost one-third of young Australians (29 percent) thought it was unlikely that climate change would be effectively combated in the future.

In fact, none of the above issues confronting young people—be they climate change, financial and job security, housing affordability, or cost of living—can be properly addressed under capitalism. The profit system creates and exacerbates these issues by its very nature. Big business and finance capital rely on the impoverishment of young people and other sections of the working class as a means of ensuring the continued supply of readily exploitable cheap labour.

Parts of the “Youth Barometer” findings suggested emerging anti-capitalist sentiments among young people. The report’s authors noted “an unshakable feeling of a world in transition” when summarising their discussions with research participants. One interviewee stated that current structures and systems have been “designed to maintain and continue the status quo.”

To meet the crises confronting them, working class youth in Australia and around the world need to fight to build a movement against capitalism and for a rationally planned world socialist society.

This is a political struggle pitting young people against all of the defenders of capitalism, chief among them Labor and the trade unions. For decades they have presided over an assault on jobs, wages and working conditions that is now being intensified by the federal Labor government, as it seeks to make the working class pay for the crisis of capitalism. Meanwhile, Prime Minister Albanese’s administration is deepening Australia’s alignment with a US war drive against China that threatens an unprecedented global catastrophe.