15 Mar 2024

The Evil of a Permanent War Economy

Eve Ottenberg




Photograph by Nathaniel St. Clair

There is no daylight between presidential candidates Joe Biden and Donald Trump on the permanent war economy. Both tout the weapons industry as a source of jobs, jobs, jobs for Americans, never mentioning that the billions of government dollars flushed through the military-industrial complex could go for other things. Think universal health care, free higher education or maybe just the green economy – if money spent on what Politico called Bombenomics went to producing solar panels and wind turbines, we’d have jobs AND a planet not heating up at warp speed. Sadly, our two presidential contenders never met a weapon system they didn’t like. And as recent history repeats – if you spend all your cash building tanks, guns and bombs, they’re gonna get used.

Even worse, the U.S. MIC compels other countries to beef up their militaries. Take Russia. Before invading Ukraine, Moscow’s weapons industry puttered along, as did military conscription, but as soon as the Kremlin realized that it had no peace partners in the west or in Ukraine – a revelation that dawned on Moscow when then British prime minister Boris Johnson sabotaged peace talks between the two opponents in spring 2022 – things changed. Russia put itself on a war footing, so that now its industrial military base hums along, churning out tanks, hypersonic missiles (which the West lacks), rockets, guns and don’t forget nuclear bombs. Russia also placed tactical nukes in Belarus.

China, too, threatened by the U.S. over Beijing’s long-standing and very public intention peacefully to absorb Taiwan, has beefed up every aspect of its war machine. As military expert Will Schryver recently tweeted: “The U.S. is currently incapable of putting to sea more than four carriers at any given time – and no more than ~60 warships of all types. China currently has 3 carriers, almost 800 vessels and mountains of missiles.”

Meanwhile, there’s Iran – now using the Chinese satellite navigation system Beidou, which means, to quote the Sirius Report, “Iranian missiles are able to use a positioning system that the U.S. has no control over.” And Tehran could soon have nukes, thanks to Trump trashing the West’s nuclear pact with Iran and Biden inexplicably refusing to fix that bubblehead move. In other words, all these fiascos could have been avoided, seriatim, had Washington controlled its aggression and exerted its stupendous influence to promote peace. Even more critically, a worsening situation can still be avoided, if Beltway insiders pivot from sanctions, expanding foreign military bases to surround perceived enemies, fomenting color revolutions and generally behaving ruthlessly. Instead, the Empire might try the good neighbor approach, though after so many decades of violence, it might take the non-Western world a while to believe such a sea change.

And then there’s the blatant immorality of a war economy, one that depends for its health on bloodshed. Yet weapons production is one of the few manufacturing industries in the U.S. that hasn’t been entirely off-shored. This is a bad look. “What does your country make? Oh, guns, tanks and bombs, not much else.” That sends a message to the world, and it’s one, apparently, with which our rulers are not dissatisfied. After all, monomaniacal Washington’s chief carrot, (which is also its chief stick) over many decades, for recalcitrant foreign governments, has been, to rephrase renowned economist Michael Hudson: “Do what we want and we won’t bomb and obliterate you.” The fact that a principal U.S. industrial product is weaponry, helps concentrate the rest of the world’s mind on that threat.

Indeed, Biden “is supersizing the defense industry,” reports Responsible Statecraft February 23. This new National Defense Industrial Strategy would “catalyze generational change” of the U.S. defense industry. No surprise there, at a time when we recently learned that since 2014, during Biden’s stint as vice president with the Ukraine portfolio, the CIA beefed up its operations in Ukraine so that that nation essentially became the biggest CIA project in the agency’s history, bristling with agency bases and bunkers. That news appeared boastfully in the New York Times, right about the moment when it became clear that the west’s whole military project in Ukraine had flopped. (Right after the Times bragged about all these CIA bases on the Russia/Ukraine frontier, Russia used its artillery to liquidate one, thereby killing who knows how many Americans. Nothing like a fawning press so eager to flaunt intelligence “achievements” that it sends some of those achievers to their graves.)

And there’s no reason to suppose this new defense industry push won’t flop as well. The Biden gang “is proposing a generation of investment to expand an arms industry that, overall, fails to meet cost, schedule and performance standards,” Responsible Statecraft reports. In other words, President Eisenhower’s warnings about the military-industrial complex are being worse than ignored. Biden breathes new life into the MIC’s evils, and so, could truly be said to be Ike’s nemesis.

Arms makers are a powerful lobby in Washington, who “have solidified their economic influence to stave off the political potential for future national security cuts, regardless of their performance or the geopolitical environment.” They can produce lemons or systems so finicky they need constant attention – Exhibit A is the F-35 – and still sell them abroad for billions. That’s because contractors carefully situate their plants in multiple states, so they can play the jobs card with Congress. The end result is an economy that demands war and more war, to keep a huge and deathly vigorous industry purring along. Meanwhile, Responsible Statecraft asks, “What is the military really getting from more and more national security spending? Less for more. Fewer weapons than it asked for, usually late and over budget, and much of the time dysfunctional.”

That’s actually not so bad. Weapons that don’t work could mean lives saved, but they also mean other things don’t get built. Instead of a massive EV base, an expanding textile industry or a big boost to solar panel manufacturing or shoe production or assembling any of the thousands of items stamped “made in China,” we get Patriot missiles and Abrams tanks, both, by the way, not all they’re cracked up to be, judging on reports from the Ukraine War.

Biden’s all in on the twisted notion that showering dollars on armaments benefits the economy, gushing about “equipment that defends America and is made in America: Patriot missiles for the air defense batteries made in Arizona; artillery shells manufactured in 12 states across the country – in Pennsylvania, Ohio Texas…” According to Truthout February 26, Arizona and Pennsylvania “are swing states crucial to his re-election bid, while the other two are red states with Republican senators he’s been trying to win over to vote for another round of military aid to Ukraine.”

More ghoulishly, “lobbyists for the administration even handed out a map, purporting to show how much money such assistance to Ukraine would distribute to each of the 50 states.” What a profitably blood-soaked investment our Ukraine proxy war is! Hundreds of thousands of Ukrainian men get to die fighting for the U.S., which doesn’t have to risk any soldiers, while back home armaments makers fatten on the carnage, and the politicians promoting this gory fiasco have the nerve to try to get re-elected! For the U.S., the Ukraine War has truly been a win/win business enterprise. Which has something to do with Washington never facing reality and admitting defeat. When the going gets rough, Washington gets going, like it did from Afghanistan, Iraq, Vietnam and so forth. The trick is never fighting a peer competitor directly, but to bomb indiscriminately around the world, while keeping the cult of death flush with money. Eisenhower must be spinning in his grave.

Poland on a war course: government and opposition close ranks

Martin Nowak


Recent statements by European officials have shown that the plans of the NATO states to intervene directly in the war against Russia are well advanced. After French President Emmanuel Macron brought up the possibility of sending NATO soldiers to Ukraine, a veritable competition broke out to see who could issue the most bellicose declaration.

Donald Tusk’s new Polish government was also involved. To mark the 25th anniversary of Poland’s accession to NATO, the Sejm (parliament) held a panel discussion in which the Foreign and Defence Ministers took part. Foreign Minister Radosław Sikorski confirmed that NATO soldiers have already been deployed in Ukraine for some time. He reiterated Macron’s initiative: “NATO troops in Ukraine are not unthinkable.”

In an interview with Super Express at the beginning of February, Defence Minister Władysław Kosiniak-Kamysz had already stated that it was necessary to prepare for war in view of the recent Ukrainian defeats. When asked, he emphasised that this was “not just something that was just being said.” His ministry had already taken concrete preparatory steps.

At the meeting of the European People’s Party (EPP) in Bucharest, Prime Minister Tusk declared last week: “The times of blissful calm are over. The post-war era is over. We are living in new times, in a pre-war era. … Today we have to say clearly that we are faced with a simple choice: Either we take up the fight … or we will fall.”

The former EU council president added that it was therefore necessary to believe in Europe’s “economic, financial, demographic and moral potential.”

While the politicians were talking about war, it was being practised at the same time. With “Dragon 24,” the most important part of the large-scale NATO manoeuvres “Steadfast Defender” took place in Poland. 20,000 soldiers from nine NATO states—including Germany, Poland, France, the USA and the UK—are taking part in the manoeuvres around 70 kilometres south of Gdansk and 170 kilometres from the Russian enclave of Kaliningrad.

Among other things, the German-British Pioneer Bridge Battalion 130 practised crossing the Vistula, which is 320 metres wide at this point, using the M3 floating bridge. As NATO military officials explained, recent experiences from the war in Ukraine are also being incorporated into the exercises. There, the front line repeatedly runs along wide rivers that cannot be crossed without technical equipment.

Poland’s President Andrzej Duda also visited the manoeuvres and subsequently convened a meeting of the National Security Council to “prepare a new national security strategy” before travelling to Washington for talks. The meeting was attended by the presidents of the Sejm and the Senate, the head of government, the foreign, defence, interior and intelligence ministers and representatives of all parliamentary groups.

Duda explained that the meeting was intended to “send a signal to the world” that “we are united on the security of our country.” Tusk also emphasised that despite all other disagreements, they would act together on security issues. Back in 2022, when Tusk was still leader of the opposition, all parties had voted unanimously in favour of the “Law on the Defence of the Fatherland,” a huge militarisation and rearmament programme for Poland.

However, since Tusk came to power, Polish domestic politics has been characterised by bitter power struggles and crises. President Duda plays a leading role in this. Nominally, he is supposed to stand outside the parties, but in reality he is the president of the ultra-right PiS party, which was voted out of office after eight years. Using his vetoes against laws and the government budget and declaring an amnesty for convicted ex-ministers, he is driving Poland to the brink of a constitutional crisis.

At the same time, social conflicts are intensifying, with farmers and lorry drivers currently taking centre stage. Farmers are repeatedly blocking the border crossings to Ukraine to prevent imported grain from depressing prices and ruining them economically. The extent of the Polish farmers’ anger and desperation is expressed in the fact that they are dumping Ukrainian grain out of lorries or freight wagons. For people who know how much labour, effort and above all time goes into growing grain, this is not a thoughtless, trivial gesture.

Although the Tusk government is still hoping for a compromise with the EU on import conditions from Ukraine, it has also announced that the police will crack down on the protests. The ruling circles reacted particularly hysterically to the action of a farmer in Gorzyczki, Silesia, who, carrying a Soviet flag, appealed to Russian President Putin: “Create order in Ukraine and Brussels, and with our rulers.”

In Poland, where a reactionary mixture of anti-communism and Russophobia is the state ideology, this is worse than blasphemy.

On Tuesday, the leaders of the Polish state arrived in Washington to mark the 25th anniversary of Poland’s accession to NATO. In addition to new arms purchases, including 96 Apache combat helicopters, and the concretisation of the Polish-US nuclear agreement for the new Lubiatowo-Kopalino nuclear power plant, plans for the deployment of NATO troops were certainly also discussed.

At a meeting Duda and Tusk held with President Joe Biden, Secretary of State Antony Blinken and Secretary of Defence Lloyd Austin at the White House, Duda also called for all NATO members to commit to spending 3 percent of their economic output (GDP) on armaments in the future instead of the targeted 2 percent.

Poland itself has doubled its military spending from 2 to 4 percent of GDP within two years and has ordered thousands of tanks and self-propelled howitzers from South Korea, among other things.

Those who had hoped that the rearmament madness would end or slow down with Tusk’s new government are mistaken. Poland is rearming at breakneck speed. At a meeting with his Swedish counterpart in Gdansk at the beginning of March, Defence Minister Kosiniak-Kamysz announced the purchase of 6,000 Carl Gustaf M4 anti-tank weapons from the Swedish Saab Group for the equivalent of €1.1 billion. According to Deputy Minister Paweł Bejda, Poland intends to sign more than 150 new contracts for “the purchase of a wide range of military equipment” this year.

The exorbitant arms purchases will inevitably exacerbate the political crisis in Poland. A year ago, the Financial Times asked: “Who will pay the bill?”

Indeed, who will pay? The billions and billions that Poland is spending on war and armaments are being squeezed out of the Polish working class, which is already suffering from inflation and price increases. The farmers’ protests are just the tip of the iceberg.

The situation of teachers and hospital staff, who protested en masse during the PiS era, has not improved, but rather worsened. The Tusk government’s promises to the contrary are worth nothing.

The government has also announced that it will not extend the previous government’s measures to cushion the social impact of inflation, such as the cancellation of VAT (sales tax) on food and the energy price brake. In view of the deepening crisis in the global economy, Poland cannot hope for rising revenues from strong economic growth either. The billions released by the EU Commission from the reconstruction fund will at best give the Tusk government a brief respite.

The collaboration between the Tusk government and PiS on war and rearmament shows that the Polish working class is facing the most serious social attacks since the introduction of capitalism, regardless of the government constellation. The disputes between the government and opposition camps revolve primarily around the question of which strategy can be used to realise these attacks.

The PiS is pushing for the establishment of an authoritarian regime, while the government camp is pushing for economic liberalisation and social cuts. However, this contrast is relative. Both insist that there can be no hesitation or dithering in the war against Russia. Or as Tusk happily explained in Washington: “The West as a whole is mobilising.”

14 Mar 2024

US financial regulators concerned about another crisis

Nick Beams


On the surface at least the global financial system appears relatively stable.

Stock markets have reached record highs, official inflation numbers are coming down, interest rates may soon start to fall, problems associated with commercial real estate debt have yet to materialise in any significant way, the price of bitcoin is hitting record highs, and potential sources of a crisis have been contained by the speedy action of financial authorities.

But when one probes the actions of official regulators a rather different picture emerges.

They are clearly concerned, if not fearful, that the much vaunted “resilience” of the banking and financial system could be undermined and are working to impose measures to prevent such an occurrence.

US Securities and Exchange Commission Chairman Gary Gensler testifies during a House Financial Services Committee hearing in April 2023 [AP Photo/Jacquelyn Martin]

Under conditions where the $26.5 trillion US Treasury market, the basis of the US and global financial system, has recently had “near death” experiences, the most significant of which was in March 2020, the Securities and Exchange Commission (SEC), under the chairmanship of Gary Gensler, is seeking to put in place regulations that control, at least to some extent, the activities of market participants.

In the wake of the failure of three middle-sized but nonetheless significant American banks a year ago as a result of interest rate rises and the continuing problems of the New York Community Bank, the Federal Reserve, along with other authorities, is trying to establish regulations requiring banks to hold more capital reserves to offset risks posed by loans and other obligations.

These measures are being strenuously opposed by all sections of finance capital as being unnecessary and even dangerous restrictions on their ability to make profit.

We do not know yet what will be the outcome of this conflict, but two things can be said at the outset.

First, because of lobbying and high-powered legal challenges funded by the financial oligarchy, the proposals will be watered down. Fed chair Jerome Powell has already said that measures aimed at making banks hold more capital could be reworked.

Second, whatever regulations are put in place will not eliminate the risk of a crisis and may even increase it. This has been the experience with the Dodd-Frank Act introduced in response to the 2008 crisis which is being blamed for creating liquidity problems in the Treasury market because of some of the restrictions it has introduced.

The thrust of the new rules drawn up by Gensler and the SEC is that more trades in the Treasury market will have to go through a clearing house. Clearing houses stand between a buyer and a seller. They take collateral from both parties, cash from the buyer and securities from the seller. The aim of this measure is to overcome the situation where if a trade between two parties falls through, the losses will not be as large.

The new rule for securities is set to come in from December 2025 when purchases or sales of Treasuries carried by broker-dealers or interdealer brokers must go through a clearing house.

The mechanism will be extended in June 2026 to the so-called repo or repurchase market where cash is raised on a short-term basis, sometimes overnight, by financial institutions using their Treasuries as collateral.

The measure has been introduced because of recent instability in the repo market. The most notable event was in September 2019, when interest rates, which are generally a fraction of a percentage point, went to as high as 10 percent leading to an intervention by the Fed to stabilise the market.

The need for a clearing house mechanism in the Treasury market was outlined in a White Paper prepared by the Treasury Market Practices Group, comprising market professionals and sponsored by the New York Federal Reserve.

It said the structure of the Treasury market had undergone significant changes in the past two decades, particularly as the increased use of advanced technology and automated systems had speeded up the pace of transactions. Market participants “lacked a common understanding of these structural changes” and more rapid trade execution may present risks to a successful clearing and settlement.

Then in something of an understatement it said given its systemic importance, “any significant disruption in the Treasury market would likely impact financial stability.”

In an interview with the Financial Times (FT), Gensler made clear he regarded the changes as necessary to maintain the supremacy of the dollar as the global currency. This is vital for US imperialism both in its capacity to run up debt and its ability to impose sanctions on other countries that cross its path. Dollar supremacy has been somewhat shaken in the recent period because of the crises within the US financial system.

“The US Treasury market is… a really important feature in promoting the dollar’s continued leadership around the globe,” he told the FT, adding that “having that reliable, safe and readily accessible and tradeable asset is critical” as it had been for the British and the Dutch when they were major powers in the financial system.

The objections from the representatives of finance capital have come thick and fast and there is a slew of legal challenges in train. As is to be expected, most of them are based on the assertion the regulations will affect profitability and trading as well as liquidity.

But amid all the self-serving claims, there is one that has some validity.

Echoing objections raised by some financial firms, the FT noted: “While introducing a central counterparty to guarantee trading brings a lot of benefits, including efficiency and reliability, it also introduces a huge single point of potential failure.”

In other words, because the financial system is in private hands, subject to the anarchy of the market, changes to deal with one problem do not eliminate crises but merely transfer the risk from one area to another.

The battle against moves to have banks increase their capital in order to offset risks is also subject to ferocious opposition. In an article on the first anniversary of the March banking crisis, the New York Times (NYT) reported that banks say the new rules are punishing them.

“They have poured in comment letters to regulators arguing that they helped stabilise the system last year, and that the cost of the proposed rules may ultimately stymie their lending or drive that business to less regulated nonbank lenders.”

Once again, there is an element of truth amid the self-serving objections, namely that tighter regulations in one area will promote a shift to the riskier so-called shadow banking system.

At the time of the three bank failures a year ago—Silicon Valley Bank, followed by Signature and First Republic—there were strenuous efforts to deny its significance. Claims were made that it only affected regional banks that were “outliers,” amid assurances from Fed chair Powell and treasury secretary Janet Yellen that the banking system was “sound and resilient.”

But as the NYT article raised, the prospect at the time was “the threat of a billowing crisis that could threaten the banking industry” in the worst crisis since 2008 which required that the banks and regulators “put together a huge bailout fund.”

The crisis that erupted last March was contained but the conditions that produced it have not gone away.

“Many banks,” the NYT reported, “have been setting aside billions of dollars to cover anticipated losses to owners of commercial buildings.”

The value of those buildings has plunged because of rising interest rates and the increase of working from home as a result of COVID.

These problems have hit the New York Community Bank, which took over the failed Signature Bank. Following a share market plunge it has been rescued by a $1 billion package organised by an investment firm owned by Steven Mnuchin, the treasury secretary in the Trump administration.

It will not be the last bank to run into serious problems.

In a private conference of clients last month, a recording of which was heard by the NYT, Jamie Dimon, the CEO of JPMorgan, said the Silicon Valley Bank collapse could be repeated.

“If rates go up and there is a major recession you’re going to have exactly the same problem with a different set of banks,” he said.

“I don’t think it’s going to be systemic except for that when there is a run on the bank people get scared. People panic. We’ve seen that happen. We haven’t solved that problem.”

US House passes bipartisan bill to ban TikTok or force its sale

Kevin Reed


On Wednesday, the US House of Representatives passed, by a significant bipartisan majority, a bill that will shut down or force the sale of the video-sharing app TikTok by its Chinese owners. The right-wing, authoritarian and anti-Chinese legislation, which was moved unanimously by the House Energy and Commerce Committee less than a week ago, was approved by a vote of 352 to 65.

The TikTok Inc. logo is seen on their building in Culver City, Calif., Monday, March 11, 2024 [AP Photo/Damian Dovarganes]

In the lower chamber of the US Congress, where nearly every bill stalls in gridlock, Democrats came together with Republicans in a supermajority to fast-track the passage of the bill, which asserts without substantiation that TikTok is a threat to US national security because it is owned by Beijing-based ByteDance, and thereby enables the Chinese government to spy on the American public.

After its passage, Republican Representative Mike Gallagher from Wisconsin, who wrote the bill with Democratic Representative Raja Krishnamoorthi from Illinois, said, “TikTok cannot continue to operate in the United States under its current ownership structure.”

The bill, called the “Protecting Americans from Foreign Adversary Controlled Applications Act,” will now move on to the US Senate where there is also considerable support for it. However, according to a report in the Wall Street Journal, passage by the Senate is uncertain, “because of questions about possible changes to the bill’s language, uncertainty about leaders’ positions and internal Senate dynamics.”

When asked how the Senate would vote on the TikTok ban, Majority Leader Chuck Schumer, Democrat from New York, “declined to say whether he would bring it up for a vote and said he would consult with Democratic committee chairs,” according to the Journal report.

President Joe Biden already said on Friday that he would sign the bill if Congress passed it. On Wednesday, during a press briefing, White House Press Secretary Karine Jean-Pierre said, “We hope the Senate takes action and takes this up very quickly.”

TikTok is the most rapidly adopted app in the history of computer technology. Launched in 2016 by ByteDance, it achieved 100 million worldwide users within a year. This number grew to nearly 2 billion users by 2023. By comparison, it took Facebook nearly twice as long—approximately 13 years—to achieve the same number of global users as TikTok. The TikTok app has been downloaded more than 4 billion times.

In the US, monthly active users are reported to have reached 170 million in 2023. More than forty-five percent of these users are between the ages of 18 and 34, which is approximately equivalent to the entire demographic of 77 million Americans. Users over the age of 18 are estimated to be on TikTok an average of 55.8 minutes per day, a span of time greater than any other social media app.

In a video posted on social media platforms on Wednesday evening, TikTok CEO Shou Zi Chew said, “Over the last few years we have invested to keep your data safe, and our platform free from outside manipulation. We have committed that we will continue to do so.”

Chew and other representatives of TikTok—the ByteDance subsidiary was incorporated in the Cayman Islands and has offices in Los Angeles and Singapore—have repeatedly pointed out that the platform does not share data with the Chinese government. In his video, Chew made it clear that if the legislation is signed into law, it “will lead to a ban of TikTok in the United States. Even the bill’s sponsors admit that that’s their goal.”

Chew also pointed out that TikTok is used by 7 million small businesses, and shutting it down will eliminate approximately 300,000 jobs in the US. Some estimates say that TikTok generated $24.2 billion in US GDP and drove $14.7 billion in small-business revenue in 2023.

The language in the House bill states that TikTok must divest from ByteDance within 180 days of its passage or face fines of up to $500 per user, or a total amount of $85 billion. Additionally, while the bill specifically mentions TikTok and ByteDance, the law can be used to shut down, in a similar manner, any other social media app with more than 1,000,000 users which is deemed a threat to national security for being a vaguely defined, “foreign adversary controlled application.”

It is a measure of the extreme crisis of the American political system that such a bill can win such widespread support of both political parties while it is universally opposed by the broad public. The bill to ban TikTok brings together in a unified way the anticommunism and rapid drive of the American ruling class to war with China, with attacks on democratic rights and the desperate effort to impose censorship on social media platforms that are influencing the views of wide layers of the population, especially young people.

The hysterical and unproven denunciations of the Beijing government for using TikTok to conduct electronic surveillance of the American public are aimed both at whipping up support for war with China and covering up the fact, for which there is ample evidence, that the US government itself has been spying on US citizens for decades, in complete violation of Fourth Amendment rights.

The timing of the passage of the legislation is no doubt connected to the fact that Democrats, Republicans and the corporate media are losing the battle over the official narratives about the US-NATO war against Russia in Ukraine and US support for Israel’s criminal operation in Gaza.

While opponents of the TikTok ban have pointed to the bill’s infringement on First Amendment rights—millions of young people are learning the truth of what is happening in the wars sponsored and armed by the US government through videos on TikTok—the Democrats and Republicans supporting it are clearly seeking to shut down this avenue to news and information.

A report in the New York Times on Wednesday said that, while there was no unified support for the ban just few months ago, “concern among lawmakers has grown even more in recent months, with many of them saying that TikTok’s content recommendations could be used for misinformation, a concern that has escalated in the United States since the Israel-Hamas war began.”

Democrat Krishnamoorthi told the Times, “It was a lot of things in the interim, including Oct. 7, including the fact that the Osama bin Laden ‘Letter to America’ went viral on TikTok and the platform continued to show dramatic differences in content relative to other social media platforms.”

Aware that young people are opposed to the ban, Donald Trump—who previously attempted and failed to ban the platform with executive orders in the run-up to the 2020 elections and while he was President—said on CNBC that TikTok is a national security threat but, “There are a lot of young kids on TikTok who will go crazy without it.”

According to a report in the Washington Post, Trump’s reversal is “partially the product of a lobbying campaign connected to a GOP megadonor with connections that reach into Trump’s inner circle.” The Post report goes on to say that Trump supporter and “billionaire Jeff Yass owns 15 percent of ByteDance, which would amount to roughly $40 billion of the company’s $268 billion valuation.” Trump claimed on CNBC that he and the GOP donor “never mentioned TikTok” in their conversation.

However, the Post report says, “Trump and his aides have spoken about TikTok to people with direct financial ties to Yass. Yass is the biggest donor to the conservative organization Club for Growth, which is currently paying former Trump senior counselor Kellyanne Conway to defend TikTok on Capitol Hill, and which recently reconciled with Trump after a feud last year. Conway has also spoken to Trump about the importance of defending the social media app, according to two other people familiar with the matter, who also spoke on the condition of anonymity to reflect private deliberations.”

Hundreds of jobs to be axed in New Zealand media restructure

John Braddock


In the past two weeks, New Zealand’s two major mainstream television stations, Three and TVNZ have announced drastic reductions to their news and current affairs programming that will see the elimination of basic services and cuts of between 300 and 400 jobs.

TVNZ building [Photo: 14 July 2007, by Ingolfson via Wikipedia]

Three’s owner Warner Bros. Discovery (WBD) announced on February 28 that it plans to shut down the channel’s Newshub operation on June 30, ending all news broadcasts and online news. Three will become a vehicle for pre-recorded variety programs, mostly sourced from offshore.

WBD, a giant multinational corporation created through the merger of Discovery Inc. and WarnerMedia in 2022, owns CNN, HBO and numerous other TV networks in the US, as well as film production studios. It has engaged in a series of brutal cost-cutting measures and the destruction of jobs, while also facing mass strikes last year by highly exploited actors and writers.

Some 300 journalists and production staff will be affected by the end of Three’s news programming, which began with the introduction of commercial television in 1989. Doubt also hangs over the future of local entertainment shows like “The Block” and “Married at First Sight.” WBD blamed an economic downturn and decline in advertising for the decision.

The announcement of Newshub’s shutdown foreshadowed that state-owned TVNZ and Māori Television would remain the sole national broadcasters of television news programs. But on March 7, TVNZ announced that it would cut 68 jobs, 9 percent of its staff. Journalists account for over half the sackings.

Four of TVNZ’s flagship shows are affected, including long-standing investigative programs “Sunday” and “Fair Go,” along with midday and late-night news bulletins. “Sunday” staff said they were “devastated” their roles are being disestablished and “deeply concerned” at the degradation of the fourth estate.

TVNZ’s youth news platform “Re: News,” launched in 2017, is also impacted: its team will be reduced from 10 to 6, meaning a sharp decline in services.

TVNZ chief executive Jodi O’Donnell told staff that “tough economic conditions and structural challenges within the media sector” had led to reduced revenue and “difficult choices need to be made” to keep the broadcaster “sustainable.” She bluntly declared: “We are a commercial business. That’s the remit we need to work with.”

While TVNZ is publicly owned, it operates on a mix of minority government funding and advertising revenue. Currently, it earns about $200 million a year, but receives just $44 million from the state, mainly in the form of support for specific programs.

TVNZ’s interim financial results released on March 1 showed the company’s total revenue had fallen 13.5 percent from last year to $155.9 million. Its net loss for the six months ending December was $16.8 million, compared with a profit of $4.8 million the year before. Advertising revenue fell 14 percent to $147 million.

O’Donnel said the decision was partly based on which shows would work in a “digital world.” The media industry had to “work together” to offset the growing dominance of global giants, such as YouTube, Disney and Netflix, she said. Google reportedly captures about 55 percent of digital advertising revenue in New Zealand, while Facebook takes about 6 percent.

The assault on jobs and news programming was met with undisguised glee by the right-wing National Party-NZ First-ACT coalition government and a gaggle of far-right commentators who dishonestly claim the mainstream media is infused with “left-wing” bias.

ACT leader and cabinet minister David Seymour told Stuff that affected journalists should reflect on their “behaviour,” saying they were displaying “enormous self-pity.”

Seymour said some journalists had directed “anger at politicians for not giving them enough sympathy” and that a “delightful lack of self-awareness” was a big part of the problem facing the media. Seymour sneeringly criticised TVNZ senior political reporter Benedict Collins for “grinning” during a recent report on prime minister Christopher Luxon’s accommodation allowance.

Seymour further declared: “Companies such as TVNZ have to adapt. They’re going to have leaner structures than they used to, because they no longer have this miracle technology of television, which gives them the near monopoly on the news.”

In fact, the “monopoly on news” is decided by the commercial interests and vast global conglomerates that dominate the media landscape. Business owners have always set the editorial directions of their media outlets. Now, to maximise profits, the public’s ability to access news, current affairs and investigative reporting on free-to-air platforms will be drastically reduced.

On Wednesday members of the E tū union, which covers journalists, voted unanimously to reject TVNZ’s restructuring plans. However, E tū negotiator Michael Wood had already made it clear the union will mount no fight to defend jobs. Last month, a union spokesperson merely told the Post that they were “dismayed” by the closure of Newshub.

In a statement, union negotiator Michael Wood, a cabinet minister in the former Labour Party government, appealed to TVNZ “to work with staff,” i.e. consult with the union bureaucracy, rather than “dictate and predetermine the outcome.” He told Radio NZ that the union accepted that TVNZ was in financial difficulty, which had to be addressed, but disagreed with axing programs that were still profitable.

In short, hundreds of staff will be thrown on the scrap heap with E tū accepting that job losses are inevitable. The union merely asks to be involved in the “process” so it can better enforce the redundancies.

The cuts are part of a broader restructure of the entire media landscape. The New Zealand Herald’s Shayne Currie noted last August: “Just about every media business in New Zealand is undergoing transformation and reducing costs, partly because of the economic climate, but also to meet changing audience demands and the rise of the likes of [artificial intelligence].”

The issues are global. Newspaper publisher Stuff’s owner Sinead Boucher told a parliamentary committee last week that the advent of generative artificial intelligence looked “increasingly like an extinction-level event” for news publications. Journalism “is in a fight for its life” and “clinging on by its fingertips… against some of history’s biggest companies,” she said.

Legacy media is meanwhile losing ground to online sources. Radio NZ recently reported that from 2000 to 2020 the number of enterprises engaged in newspaper publishing declined by 32 percent. Census data showed journalist occupations decreased by about half between 2006 and 2018, from 4,284 to 2,061. Last year New Zealanders spent more time using digital than traditional media, according to NZ On Air.

The popularity of alternative and independent media sites is a result of both the expansion of the internet and widespread hostility to the role of the media companies as news “gatekeepers” that uncritically promote the claims of governments, the intelligence agencies and big businesses.

Annual surveys by Auckland University of Technology’s Centre for Journalism, Media and Democracy show that four years ago more than half (53 percent) of respondents said they trusted most of the news most of the time. In 2023, that figure had dropped to 42 percent.

Far from being “left wing,” corporate and state-funded media outlets alike have operated as craven mouthpieces for the ruling class. In their coverage of the US-NATO war against Russia in Ukraine, and Israel’s genocidal onslaught against Gaza, every major media outlet in New Zealand has lined up with US imperialism and its allies, publishing war propaganda and censoring critical journalists.

But with millions of people involved in global protests against war, austerity and threats to democracy, there is a growing worldwide audience for objective, truthful news and critical commentary, as well as serious films and television.

The jobs bloodbath will further reduce what little independent-minded, investigative reporting remains; it will result in the even greater concentration of corporate and state control over the media. This is of a piece with the escalation of online censorship by major tech companies and governments, as the ruling classes internationally turn towards authoritarian measures aimed at suppressing growing social and political opposition.

13 Mar 2024

Haitian Prime Minister Henry Agrees to Resign as CARICOM Announces Formation of Presidential Council

Jake Johnston


In a prerecorded message released on social networks just after midnight, Ariel Henry, who has held de facto power in Haiti since shortly after the 2021 assassination of Jovenel Moïse, agreed to resign. Sort of.

Henry has been holed up in Puerto Rico for a week, unable to return to Haiti as coordinated attacks from armed groups shut down the airport. Once the US pulled its support last week, he was left in limbo and had not issued any public statements until early this morning. It is unclear to what extent he was under pressure from the US to remain out of the country and to stay quiet.

Henry’s announcement came shortly after the conclusion of a series of political negotiations among dozens of Haitian stakeholders, CARICOM heads of state, the US Secretary of State, the Canadian prime minister, and other foreign diplomats held in Kingston, Jamaica. A proposal, agreed to by those foreign powers and accepted by a number of Haitian political parties and civil society organizations who participated via Zoom, calls for the formation of a seven-member presidential transitional council that will name a new prime minister to replace Henry.

Henry made it clear that he intended to resign once the presidential council had officially formed. Those with a seat on the council have 24 hours to name their representative. It is likely that Henry will stay until the new council has picked an interim prime minister to replace him, delaying his ultimate resignation further, depending on how long it takes the new council to reach consensus.

The seven representatives on the council will reportedly come from the private sector, the January 30 Collective (a grouping of political parties), Fanmi Lavalas (the party of former president Jean-Bertrand Aristide), the Montana Accord, the December 21 Accord (allies of Henry), les Engagés pour le Développement (the party of former PM Claude Joseph), and Petit Dessalines (the party of former senator Moïse Jean Charles). There will also be two observer members, with one representing civil society and the other the religious sector.

Notably, Moïse Jean Charles appeared in the capital two weeks ago, as the coordinated attacks against government institutions began, to announce a political accord with former police officer and paramilitary leader Guy Philippe. He has previously criticized the internationally backed process to select a new government, and it is unclear how the party’s inclusion in the new council will affect the situation on the ground or if it will offer Philippe a path to influence the new structure. Réveil National pour la Souveraineté Nationale, the political coalition backing Guy Philippe, released a statement this morning rejecting the CARICOM-backed presidential council.

After a period of intense attacks beginning in late February targeting the airport, police stations, and other government institutions, the situation in Port-au-Prince has calmed over the last two days as the political negotiations played out in Kingston. But it is unclear if the new government will do anything to appease the disparate armed groups that have come together in recent weeks.

Though there has been no explicit alliance, multiple sources close to both factions said that Guy Philippe was working directly with the armed groups in the capital in his effort to seize power in Henry’s absence. Who ultimately is in control of that alliance, however, remains to be seen. Much remains in flux.

What is clear is that the announcement in Kingston late last night is unlikely to lead to a solution to the current crisis by itself. After criticizing Henry for relying on the support of the US and other foreign powers, an agreement pushed by those same foreign powers is likely to face legitimacy concerns from the moment it forms. Though negotiations have been taking place for the better part of a week, none of the participants or discussions have been made public, leaving the vast majority of Haitians in the dark. Notably, CARICOM set conditions for participation, including accepting deployment of a Kenyan-led intervention force.

An initial proposal of a five-member council was rejected by some CARICOM members, who instead pushed for the inclusion of additional political actors in an attempt to break the armed anti-government mobilization in the capital.

If the inclusion of Moïse Jean Charles and allies in the presidential council is not enough to convince the capital’s armed groups to lay down their arms — and there is little indication it will — violence is likely to continue, forcing the new council to rely on external security assistance to function.

It was US and foreign support for Henry that pushed the situation to its dire state. But rather than letting a truly Haitian-led process play out, those same foreign powers have opted for a stability pact that, it would seem, is likely to lock in an unsustainable status quo at least in the short term.