Boeing Board of Directors onboards defense industry veteran as new CEO

Bryan Dyne

On August 8, Robert K. “Kelly” Ortberg was brought in as Boeing’s new president and CEO. Ortberg takes over the giant aircraft maker and military contractor amid dozens of near-disasters over the past eight months involving the company’s commercial planes and Starliner spacecraft and several investigations into the lack of quality control underlying these incidents.

Ortberg is the third head of the corporation in five years, replacing David Calhoun, who took over the corporation in January 2020 in the wake of the two 737 MAX 8 crashes that killed 346 men, women and children. Calhoun, who had been on Boeing’s board and is one of the many who bear responsibility for the the development and production of the deadly MAX 8, was elevated in an attempt to rehabilitate Boeing’s image after the crashes and, more importantly for the company’s stockholders, restore the airplane manufacturer’s profitability.

The selection of Ortberg by Boeing’s Board of Directors is another attempt to do the same, this time with someone not so mired in the criminality of the corporation’s upper management. Ortberg has also been brought in to strengthen Boeing’s ties to the US military-industrial complex.

The logo for Boeing appears on a screen above a trading post on the floor of the New York Stock Exchange, July 13, 2021. [AP Photo/Richard Drew]

Before Boeing, Ortberg was president and CEO of Rockwell Collins from 2013 to 2021. Rockwell Collins has its origins in shortwave radio manufacturing dating back to 1933. During World War II, its predecessor, Collins Radio Company, provided key radio and navigational equipment for the US military.

That work expanded in the post-war era, particularly during the race between the US and the Soviet Union in the 1960s to land a manned mission on the Moon. The company also moved into other fields, including flight control instruments and satellite voice transmissions.

Collins Radio Company was purchased by Rockwell International in 1973, merging into Rockwell Collins. Since then, the company has focused solely on avionics for commercial planes and the defense industry.

Under Ortberg’s leadership, Rockwell Collins was purchased by RTX Corporation (formerly Raytheon Technologies) in 2018. It has since played a key role in the wars conducted by American imperialism, including the US-NATO war against Russia in Ukraine and the US-backed Israeli genocide in Gaza.

Ortberg is tasked with reversing Boeing’s financial crisis. According to Business Today, Boeing has not had a profitable year since 2019 and has lost an estimated $33.3 billion over that time. The company lost $1.4 billion in the second quarter of 2024 alone and has lost a third of its value on the Dow Jones Industrial Average since January.

Boeing’s financial woes are in part due to numerous exposures of lax internal safety and quality control, first revealed by the MAX 8 crashes and highlighted again in January when a door panel blowout occurred on a MAX 9 jetliner shortly after takeoff. While no one died in that incident, it showed that Boeing management’s claims to have revitalized a “safety culture” within the company after the MAX 8 crashes were nothing but hot air.

Further blows came as numerous whistleblowers emerged in the wake of the January door blowout who directly contradicted Boeing’s claims that safety and quality were top priorities. They made clear that management’s actual priority was restoring the company’s profitability at any cost.

Among the most significant of the whistleblowers was John “Mitch” Barnett, who had opened a civil suit against Boeing, claiming that he was forced out of the company in 2017 after he raised multiple concerns about the safety of the 787 Dreamliner.

He had given two days of testimony in Charleston, South Carolina when he was found dead in his hotel parking lot the day he was slated to give his third day of testimony. While the county coroner declared that the death was a “self-inflicted gunshot wound,” news coverage afterward revealed that Barnett had told a family friend, “If anything happens to me, it’s not suicide.”

Two months later came the death of another whistleblower, Joshua Dean, also under circumstances that were never fully explained.

And in testimony before the Senate Homeland Security and Governmental Affairs Subcommittee, former Boeing quality engineer Sam Salehpour said that when he tried to raise safety issues internally, “I was told to ‘shut up,’ I was sidelined, I received physical threats.” He continued, “My boss said, ‘I would have killed someone who said what you said in a meeting.’”

More recently, a flight attendant who was on the MAX 9 during the blowout incident testified before the National Transportation Safety Board and asked, “How can we know this is not going to happen again and this is safe, because that should not have happened?”

Ortberg has also been brought in to suppress the growing militancy of Boeing workers. In July, 33,000 machinists who are in the International Association of Machinists and Aerospace Workers (IAM) voted 99.9 percent to strike when their contract expires on September 12.

A strike would further undermine Boeing’s profitability, delaying even more the delivery of thousands of airplane orders on which Boeing is already years behind.

The IAM leadership, including District 751 President Jon Holden, is already preparing to betray the aspirations of the workers and collaborate with the company. In a “Statement on Boeing’s New CEO,” Holden wrote that Ortberg’s appointment “is a step in the right direction,” and that he “needs the support of the Machinists Union more than ever.”

The statement went on to say, “We want to be an integral part of Boeing’s vision for the future.” In other words, the IAM bureaucrats are ready and willing to suppress strike activity by the rank and file as long as they get their cut.

But Boeing machinists are in an immensely powerful position to win their demands, including for a sharp rise in pay and the restoration of hundreds of safety and quality positions that have been eliminated over the past several years.

A strike would also be a significant blow against the Biden administration and the US war machine, especially given Ortberg’s defense background. Along with RTX, Boeing is a major contractor for the Department of Defense and is integral to American imperialism’s war plans against Russia and China, along with the ongoing US-backed Israeli genocide in Gaza. A strike at Boeing would significantly hinder these murderous campaigns.

Strengthening recessionary trends in global economy

Nick Beams

In the wake of last week’s turmoil on global stock markets, which saw the Tokyo market experience its biggest one-day fall since the October 1987 stock market crash before rebounding, attention is increasingly being directed to the strengthening recessionary trends in the world economy.

They are apparent in the top four economies: the US, China, Japan and Germany.

Pedestrians walk past the New York Stock Exchange building on March 25, 2024, in New York [AP Photo/Frank Franklin II]

A widely followed and generally reliable report on investor sentiment said confidence had collapsed in both Germany and in the eurozone.

As the Financial Times reported, the ZEW Indicator of Economic Sentiment for the Eurozone fell 25.8 points to 17.9 in its biggest decline since the start of the pandemic. In Germany, the index fell by 22.6 points, a decline three times larger than suggested by a poll of economists, and the lowest level since the start of the year.

The comments on the numbers reported by the FT were all downbeat. ZEW president Achim Wambach said: “The economic outlook for Germany is breaking down.” He said there was “high uncertainty” caused by what he claimed was an “ambiguous” monetary policy on the part of the European Central Bank, poor business data in the US and concerns over the prospect of military conflict in the Middle East.

The senior economist at Oxford Economics, Alexander Valentin, said the weakening growth outlook and worsening investor confidence provided arguments for the ECB to cut rates at its next meeting in September and again by the end of the year.

Other comments were in a similar vein. The senior economist at Deutsche Bank, Robin Winkler, said the optimism over a recovery in the German economy that had been present in the spring had now “completely evaporated.” Germany’s GDP in the second quarter contracted by 0.1 percent.

A note to clients from T Rowe Price said there was a “risk that GDP growth in Germany shrinks this year” and that it could become trapped in a “self-fulfilling loop where weaker expectations lead to weaker growth.”

In China, GDP growth for the second quarter was 4.7 percent, a significant fall from growth of 5.3 percent in the first. The slowdown in the economy has set off an unusual battle between the country’s banks and the People’s Bank of China (PBoC), the central bank.

Faced with worsening economic prospects, banks have been investing money in the bond market, sending down yields to as low as 2.1 percent on 10-year bonds. (The yield on bonds falls as demand for them increases and the price goes up.)

For several months, the PBoC has been discouraging these moves and last week took the step of naming and shaming a group of four rural banks, saying they were “manipulating” bond prices in the secondary market.

The concern of the authorities, not without some justification, is that a situation could arise as took place in the US in March 2023. Silicon Valley Bank and other regional banks were confronted with major losses on their holdings of Treasury debt when interest rates rose, and they went under.

While there are concerns over financial stability, political considerations are also playing their part. The PBoC campaign is aimed at trying to head off other conclusions being drawn—that the turn to bonds and the fall in yields is an indication of concern about the direction of the economy and the need for a change of course in official policy.

As a comment in the FT this week put it, “China’s bond market is now flashing urgent deflationary warning signs” and “policymakers would do well to take heed.”

There has been some acknowledgement by President Xi Jinping of the need to increase effective demand and boost consumption spending, following a meeting of the Political Bureau of the Communist Party of China earlier this month. And the PBoC has recently referred to “insufficient effective [domestic] measures.” But there is no sign of significant action.

The thrust of the government’s economic policy remains focused on the longer-term objective of investment in “high quality productive forces.” But this policy, which is aimed at increasing exports of high-tech goods, does nothing to address the domestic situation. It is characterised by the problems resulting from the debt problems in the property market and falling consumer confidence, leading to calls for action by central authorities.

In a sign of the downturn in the Chinese economy, especially in construction, the steelmaker Baowu has warned of a “long and harsh winter” ahead for the industry, under conditions where the benchmark price for iron ore has already fallen 30 percent so far this year.

After something of an upturn in 2023, the Japanese economy appears to be sliding back into a cycle of low growth. In the first quarter, it contracted at an annualised rate of 2.9 percent on the back of falling consumption spending , which recorded a decline for four consecutive quarters, the longest streak since 2009, and a decline in exports.

The forecast for the second quarter is for a rebound with expectations that it will be 2.1 percent on an annualised basis, according to a Reuters poll. But there are doubts about how long this might continue. The outlook is clouded because of the decision by the Bank of Japan (BoJ) to lift interest rates, thereby increasing the value of the yen, which could hit exports. The prospect for exports is also clouded by the signs of a slowdown, and possibly a recession, in the US economy.

The market turmoil of last week underscores the fragility of the financial system based on a mountain of debt, above all in the US.

The sell-off was sparked by a lower-than-expected US jobs report number and the interest rate decision of the BoJ. The resultant rise in the value of the yen led to the unwinding of so-called carry trades, in which cheap Japanese money was used to finance investments in US financial markets.

As the Wall Street Journal noted, the turmoil was a “deleveraging” episode in which investors using borrowed money had to sell assets in one area of the market to cover losses in another. It reported that according to Goldman Sachs, “July was one of the largest deleveraging episodes for hedge-fund clients” in the past 10 years.

In recent days, Fed officials have been taking to the airwaves to offer reassurances that the economy is not moving into a recession. But facts on the ground are telling a different story. Consumer confidence is down, and lower-paid workers are living off their credit cards in the face of steep price rises in basic necessities, well in excess of official inflation numbers. Total credit card debt has hit a record of $1.14 trillion.

And a jobs massacre has begun with thousands of layoffs in high-tech in past months and sackings in the auto industry. Since the start of the year, more than 8,000 jobs have been axed by the “Big Three” auto manufacturers in the US. Now it has been announced that 2,450 workers will be laid off at Stellantis’ Warren Truck plant, threatening the complete shutdown of the factory.

Paramount has announced the closure of its TV studios and the firing of 15 percent of its workforce.

Meanwhile Wall Street, ever anxious to get its hands on cheaper money to sustain the debt mountain, has been calling for the Federal Reserve to start cutting its rate at its next meeting in September by at least 25 basis points (0.25 percent) and possibly by 50, followed by more cuts before the end of the year.

With signs of financial instability increasing and growing indications of recession, all eyes will be on the remarks of Fed chair Jerome Powell to the annual conclave of central bankers at Jackson Hole, Wyoming, later this month.

Macron agrees to Pacific leaders’ fact-finding mission to New Caledonia

John Braddock

After several weeks of delay, French President Emmanuel Macron has given the go-ahead for a high-level Pacific fact-finding mission to New Caledonia. It was requested by leaders of the Pacific Islands Forum (PIF), ostensibly to gather information about the ongoing social and political turmoil in the French colony.

Smoke rises during protests in Noumea, New Caledonia, Wednesday May 15, 2024. [AP Photo/Nicolas Job]

The confirmation came as Forum foreign ministers met last week in Suva, Fiji, ahead of the 53rd PIF Leaders Summit on Tonga at the end of August. The PIF secretariat wrote to Macron last month, requesting a visit by a Forum Ministerial Committee to Nouméa to gather information “from all sides” involved in the crisis.

The 18-member PIF is the Pacific’s major regional leadership body. The delegation to Nouméa will comprise PIF chair and Cook Islands Prime Minister Mark Brown, Fiji Prime Minister Sitiveni Rabuka and Solomon Islands Prime Minister Jeremiah Menele.

New Zealand Foreign Minister Winston Peters indicated prior to the announcement from Paris that New Zealand wished to “play a role,” adding that he expects “over time there will be more than one delegation” sent to New Caledonia.

France’s ambassador to the Pacific, Véronique Roger-Lacan, told RNZ Pacific on Friday that Paris “is welcoming” the fact-finding mission which will report back to the PIF summit. She had previously emphasised that while France “is always open for dialogue,” New Caledonia was French territory and “it is the State which decides on who enters the French territory and when and how.”

Violent unrest broke out nearly three months ago, driven largely by alienated Kanak youth, after the French parliament passed a constitutional amendment to boost voter eligibility in New Caledonia’s local elections which pro-independence groups declared would further marginalise the indigenous Kanaks.

Amid an ongoing 10 p.m.‒5 a.m. nationwide curfew, 3,700 French security forces are still working on removing roadblocks, mainly in the capital Nouméa and outskirts. The death toll stands at ten: eight civilians and two gendarmes. More than 800 buildings and businesses are estimated to have been looted and burnt down by rioters. Several pro-independence leaders charged with instigating civil unrest remain in jail in mainland France.

France’s High Commissioner Louis Le Franc last week provocatively issued medals to soldiers of the elite GIGN paramilitary force which has been involved in armed clashes with protestors, including the killing of a prominent Kanak rebel on 10 July. The GIGN is notorious for its role in the 1988 massacre of 21 Kanaks who were holding a group of hostages on the island of Ouvéa during civil war conditions.

Roger-Lacan dismissed widespread criticism over France’s crackdown, slamming Pacific media for not being “very balanced with their reports.” “We repeat the fact that these riots were conducted by a handful of people who contest democratic, transparent and fair processes, and that the French state has restored security, and is rebuilding and organising the reconstruction [of New Caledonia],” she insisted.

PIF Chair Brown said the task of the high-level “monitoring and dialogue” mission is “to try to reduce the incidence of violence” and to appeal for talks between the different sides.

The various Pacific governments, as well as Australia and New Zealand, are not concerned about the brutal conditions imposed on New Caledonia’s oppressed masses. They are undoubtedly nervous, however, that if France cannot bring the situation under control, the unrest in New Caledonia could be a spark for similar protests and riots across the impoverished region, where living standards are being ground down by inflation.

New Caledonia and French Polynesia were admitted as members of the PIF in 2016, after lobbying by Paris since 2003 to expand its regional influence. Membership was previously restricted to the nominally independent nations. The move was endorsed by the regional imperialist powers Australia and New Zealand amid escalating geo-strategic rivalries fueled by the US-led preparations for war with China.

Macron’s strategy in New Caledonia has been to enforce “Republican order” with the intense police-military crackdown, while demanding the official pro-independence leadership play its part in suppressing the rebellion. Lifting a 12-day state of emergency on May 28, Macron demanded the leaders of the four-party FLNKS (Front de Libération Nationale Kanak et Socialiste) use their influence to get blockades around the main island dismantled.

Despite the massive security operation and pressure wielded by Macron, the rebellion has still not been brought under control. The FLNKS admitted that it failed to persuade protesters to remove roadblocks because the rebels were not convinced Macron would drop the electoral reform.

The FLNKS is supporting calls for outside intervention to help control the uprising. As a component of the Melanesian Spearhead Group (MSG), which includes Papua New Guinea, Fiji, Vanuatu and Solomon Islands, it was party to a statement calling for a joint United Nations-MSG mission to assess the political situation and “propose solutions.”

Supported by PIF Chair Brown, the MSG called on France to undertake another referendum on independence due to their “dissatisfaction” with the third referendum in 2021, which they deemed a “forceful and unilateral decision by the French State.” That poll saw a 96 percent vote to remain with France after it was boycotted by the independence movement.

While Macron manoeuvres to form a right-wing government in France in defiance of the results of last month’s snap election, talks between New Caledonia’s pro- and anti-independence parties are set to resume in September. Four New Caledonian MPs, two from each side, met with Macron in Paris late last month calling for “political dialogue” to resume urgently.

RNZ Pacific reported that the group emerged from the meeting with “an apparent show of unity.” Newly elected pro-independence representative Emmanuel Tjibaou of Union Calédonienne, a constituent of the FLNKS, declared “we have to break the institutional impasse, the deadlock that has occurred over the crisis that affects everyone, whether we are pro- or anti-independence.” Loyalist Georges Naturelle (Rally-UMP, affiliated with Les Républicains in France) declared the meeting had “presented a model for the resumption of dialogue in Nouméa.” The “priority of priorities,” he declared, “is to return to order.”

The factions of the colony’s ruling elite are preparing to come together to reach a settlement, in collaboration with the French state, to impose their class solution to the crisis. The official Kanak movement has been exposed by the uprising that erupted from below and outside their control. The riots have much deeper roots than unresolved frustrations over independence, coming at a time of escalating economic turmoil and social discontent. Unemployment among youth is 26 percent, mainly affecting young Kanaks.

The crisis is set to intensify. The major nickel plant Koniambo (KNS) recently announced the impending sacking of 1,200 workers after failing to find a buyer. Operations were idled following an announcement in February that its financier, Anglo-Swiss Glencore, wanted out. Some 600 contractors relying on the plant have already lost their jobs.

KNS is jointly owned by Glencore (49 percent) and New Caledonia’s Northern Province (51 percent). In a decade of operation it has never made a profit, accumulating a huge €13.5 billion of debt. The plant was established in a 1997 deal brokered by France which, along with the 1998 Nouméa Accord, created a narrow, pro-capitalist political and business elite within the Kanak community.

Now, as global nickel prices tumble, New Caledonia’s crucial nickel mining and smelting industry is in turmoil, faced with increasing competition from emerging producers such as Indonesia and China which are manufacturing much cheaper nickel. Two other plants, Prony Resources and Société le Nickel, are facing similar crises, threatening the jobs of a quarter of the territory’s workforce.

Miners, processing workers, truck drivers, airport workers and others have repeatedly engaged in militant struggles to defend jobs and conditions. This has brought them into conflict with the entire ruling elite, including the privileged layer represented by the FLNKS. In April clashes erupted between security forces and protesters over the future of the plant. These could well erupt again.

Over 1.3 million Americans are now being infected with COVID-19 each day

Bill Shaw

On Monday, the Pandemic Mitigation Collaborative (PMC) released its updated model, estimating that over 1.3 million Americans are now being infected with COVID-19 each day as the summer surge deepens. At present, 1 in 38 Americans are infected with COVID-19, as documented extensively in a new report from PMC.

The Collaborative, which is run by Michael Hoerger, Ph.D. at Tulane University in New Orleans, just released version 2.0 of its PMC COVID-19 forecasting model. It is one of the most sophisticated models available, designed to inform the public about the current state of the pandemic, while encouraging people to take appropriate precautions to protect themselves.

Current levels of transmission exceed those seen during 91 percent of the pandemic to date and are the highest ever seen in mid-August during the entire pandemic. This deepening summer wave is the 9th wave of the pandemic in the US and is taking place amid a complete cover-up by the Biden administration, the Centers for Disease Control and Prevention (CDC) and the corporate media, all of whom have conspired to impose the homicidal “forever COVID” policy of unending mass infection, death and debilitation with Long COVID.

Graph of year-over-year transmission shows we have likely never had such high COVID transmission in mid-August. [Photo by Dr. Mike Hoerger (@michael_hoerger on Twitter/X)]

The PMC report includes a map of transmission levels by US state, a modified version of a map published by the CDC based on data from the National Wastewater Surveillance System (NWSS). While the CDC map uses pastel colors to try to portray the deluge of infections as harmless, the PMC report follows best practices in Geographic Information Systems (GIS) design, according to which they note “consensus is to use colors like red to indicate something is ‘hotter’ or greater cause for concern.”

CDC COVID-19 Heat Map, with higher transmission shown with deeper red [Photo by Dr. Mike Hoerger]

The deepening summer surge coincides with the emergence of the new viral variant KP.3.1.1, which has rapidly become dominant since first emerging in early June as a descendent of the KP.3 variant.

The confluence of the summer surge and a new viral variant, to which the population has less immunity, is highly dangerous. Combined with the timing of mid-August when children are beginning to return to schools and colleges, it raises the potential for a perfect storm to send viral transmissions even higher in the Fall. Commenting on this, the report notes:

This is the highest level of transmission at the time of schools starting, so expect K-12 schools and universities to be hotbeds for COVID outbreaks unless they are using multilayered mitigation like indoor air quality that meets ASHRAE standard 241 (if they have never heard of this or cannot explain how they are meeting the standard, they likely are not meeting the standard), surveillance testing, free on-demand testing, and universal masking.

In fact, the reopening of schools with zero mitigations in place makes it challenging for PMC model to predict the peak of the current summer surge. The report notes, “we are likely near the peak of the wave, unless the unprecedented context of back-to-school with no emphasis on mitigation pushes transmission higher in ways the model cannot predict statistically.”

Significantly, the PMC model estimates that Americans have now had COVID-19 on average 3.3 times. According to one study, people who self-report having had 3 infections have a 40 percent chance of developing Long COVID. The PMC model estimates 468,000 to 1,870,000 new cases of Long COVID per week at current transmission levels, an astounding level of new disability being created on a weekly basis.

This estimate comes on the heels of the latest groundbreaking study led by Dr. Al-Aly, which estimated that by the end of last year over 400 million people were suffering from Long COVID globally.

A key strength of the new version of the PMC model is that it incorporates three sources of data. The first is the NWSS data from the CDC. The second is BioBot wastewater data that used to be funded by the CDC, which has increasingly been less publicly available. The third source of data is the “true case” data from the Institute for Health Metrics and Evaluation (IHME), which correlated wastewater levels with daily new cases and was regularly updated through April 1, 2023.

Because the three sources of data overlapped for parts of the pandemic, it was possible for the Collaborative to build a statistical model that continues to estimate current case and transmission levels from the wastewater surveillance data. The two wastewater data sources are both used in the model, which enables the model to provide much more reliable estimates.

Overall, the Collaborative has provided a highly valuable service in creating a robust model and informing the public about surging COVID-19 levels in the United States. The fact that the CDC itself is not providing this type of modeling and analysis, as any true public health agency would, is an indictment of the capitalist system which instead has sought to keep the public in the dark.

Indeed, neither the Twitter account of the CDC nor its director, Mandy Cohen, has issued any warnings about the summer COVID surge. Nor have they urged the public to take precautions to avoid infection and reinfection, such as masks, air purification and avoiding crowds.

Several aspects of the PMC model emphasize the extent to which the ruling class has eviscerated public health protections. First, the shutting down of surveillance data has required the Collaborative to be creative in stitching together three different sources of data, which have been active at different times in the pandemic. In particular, the shutting down of the “true case” data is a complete violation of public health science and practice. Basic case reporting and surveillance is fundamental to the response to a deadly and debilitating virus.

Second, the deliberate use of “welcoming” and “cool” colors in COVID-19 maps by the CDC serve to downplay the danger to the public of current transmission levels. The Collaborative’s red-shifted map paints a much more accurate picture of just how high transmission—and therefore the danger—is.

Third, the PMC model has only begun to be able to provide regional estimates of transmission levels within the United States. The Collaborative hopes to increase the robustness of its regional estimates in future versions of its PMC model, but the difficulty in doing so is again due to the systematic shutting down of case reporting and detection at the local, state and national levels by public health agencies.

The ongoing coverup of the pandemic and its true dangers is a social crime committed by the capitalist ruling class. They continue to subordinate the public’s health to private profit, no matter the immediate and long-term consequences to the public’s health. Their “let it rip” and “forever COVID” policies continue to generate mass death and disability.

Australian political turmoil intensifies as central bank predicts ongoing inflation

Mike Head

The latest media opinion polls released this week indicate continuing plunging support for the Albanese Labor government, primarily driven, according to the polls, by the soaring costs of housing and other living expenses for working-class households.

Prime Minister Anthony Albanese. [Photo: Twitter/@AlboMP]

The poll results confirm the increasing likelihood that the next federal election, which must be held before May, will produce a very unstable minority government, with either Labor or the Liberal-National Coalition trying to rule with the support of the Greens and/or various so-called independents.

Labor’s support has not recovered despite an anxious cabinet reshuffle by Prime Minister Anthony Albanese on July 28, spearheaded by moves to further target refugees, international students, migrants and construction workers, making them scapegoats for the worsening cost-of-living and housing crisis.

The Resolve poll in the Nine television and print media outlets said Labor’s vote was on 29 percent. This was far below the 32.5 percent Labor got at the May 2022 election, and eight points behind the Coalition, whose voting base imploded at that election due to the popular hostility toward it.

The Murdoch media’s Newspoll said Labor’s primary vote support had dropped to 32 percent—seven points behind the Coalition headed by the widely detested far-right Peter Dutton.

Albanese had a Newspoll net approval rating of minus eight, almost as low as Dutton on minus 10. That reflects, at least partially, the growing political disaffection with both the virtually indistinguishable parties of big business that have ruled since World War II.

Newspoll reported that this was Labor’s lowest primary vote since the 31 percent recorded in the wake of the government’s failed Voice constitutional referendum last October to entrench an advisory indigenous body in the heart of the parliamentary and executive government apparatus.

That defeat, inflicted because most working-class people distrusted the government’s empty promises of improving the social conditions of ordinary indigenous people, was a major blow to the government’s effort to put a supposedly progressive gloss on its program of war and austerity.

Such polls provide only a limited and distorted view of the underlying political crisis. For a start, they do not ask voters about the bipartisan support of Labor and the Coalition for the US-backed Israeli genocide in Gaza, nor about their twin unconditional commitment to the US-NATO war against Russia and AUKUS plans for war against China.

Nevertheless, the results indicate that after two and a half years in office, the Labor government’s program of militarism, massive military spending, complicity in genocide and cuts to working-class living conditions has opened the door for the possible return of an openly right-wing Coalition government.

The polls were conducted just after the Reserve Bank of Australia (RBA) last Tuesday made it undeniable that the underlying economic and social conditions facing millions of working-class people will worsen over the coming period.

In the first instance, the central bank dashed any hopes that the Labor government had that the bank would cut interest rates this year. This is despite the deepening financial and social stress generated by high home mortgage repayments, sky-rocketing rents and prices for other essentials, like food, petrol and insurance.

The RBA board effectively scuttled the government’s claims that it was tackling the cost-of-living crisis with token temporary gestures, such as one-year energy bill rebates. The board’s statement predicted that inflation, currently running at 3.9 percent as measured by the RBA’s “trimmed” Consumer Price Index, would not come into the bank’s 2-3 percent target range before the end of 2025.

In fact, the RBA did not rule out again raising official interest rates, which it has hiked 13 times, to 4.25 percent since May 2022. The board declared that reducing inflation was still its “highest priority.” It stated: “The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.”

Under the false banner of fighting inflation, the RBA—backed by the Labor government—followed other central banks internationally in increasing rates in a deliberate operation to induce a slump and increase unemployment, now officially above 4 percent, in order to suppress workers’ wage demands.

In remarks that went unreported in the corporate media, the RBA board also referred to “a high level of uncertainty about the overseas outlook.” It said the outlook for the Chinese economy—Australia’s biggest export market—had “softened” and this had been “reflected in commodity prices.”

Moreover, “globally, financial markets have been volatile of late,” the Australian dollar had depreciated and “geopolitical uncertainties remain elevated, which may have implications for supply chains.”

These comments are a significant understatement. US-led economic warfare measures are hitting China, and this is already slashing prices worldwide for iron ore and other minerals on which Australian capitalism has long depended.

At the same time, the “geopolitical uncertainties”—code words for the plunge into disastrous conflicts in the Middle East, Russia and the Indo-Pacific—will continue to disrupt “supply chains,” driving up energy and food prices.

Writing in the Guardian last week, economist Greg Jericho drew attention to some of the devastating impact on households. Mortgage repayments now consume a crippling 70 percent of average disposable household income, up from 46 percent in May 2022 when Labor took office.

New housing approvals have plunged from over 10,000 per million people in the 1990s to around 6,000, the lowest level in decades. That is because buying a new home is out of reach for anyone on an average wage.

Another factor in the housing crisis is that successive governments, Labor and Coalition alike, have gutted public housing. In the 1960s, the public sector accounted for nearly 20 percent of new builds. Today, it sits at less than 2 percent.

These figures alone expose the fraud of all the Albanese government’s vows, most recently mouthed by newly-installed Housing and Homelessness Minister Clare O’Neil, to tackle the housing crisis.

Labor’s housing program basically consists of further subsidising and deregulating the private housing market, which is dominated by the same property market speculators, billionaire developers and construction giants that have profited from this social reversal.

While cutting spending on public housing, along with public health, education and other essential social programs, the Labor government has allocated hundreds of billions of dollars for AUKUS nuclear-powered long-range submarines and other US-supplied weaponry, as well as agreeing to growing US military access to facilities across the country.

This is placing the Australian population even more on the frontline of a potentially nuclear war against China, while imposing the financial burden on workers and youth amid spiraling living costs and rising job losses.

A historic political crisis is developing. The disintegrating support for the Labor Party is on top of the implosion in its previous working-class base over the past four decades since the trade union-backed Hawke and Keating Labor governments of 1983 to 1996.

Major elements in the corporate and media establishment backed the return of a Labor government in 2022 in the hope that, with the help of the union bureaucrats, it could impose the required agenda of militarism and social sacrifice after the seething hostility toward the previous Coalition government.

Now the Albanese government is increasingly unravelling, accompanied by attacks on anti-genocide and anti-war dissent and the threat of a return of an even more detested Coalition government.

Further mine closures point to deepening job cuts across Australia

Vicki Mylonas

Mining conglomerate BHP announced last month it would shut down its Western Australian nickel operations for at least three years, putting around 3,000 workers out of a job. The closure is likely to have a flow-on effect on mining and other industries in the region, meaning even more jobs will be destroyed.

Ravensthorpe nickel project [Photo: First Quantum Minerals]

Soon after BHP’s announcement, Glencore warned its Murrin Murrin cobalt mine, also in Western Australia, may cease operations, putting around 1,500 jobs in danger. Another major mining and energy giant, Fortescue, slashed 700 jobs last month in a cost-cutting exercise prompted by warnings the company’s share market value could be halved.

These announcements follow the destruction of thousands of jobs in the critical minerals sector, as falling prices on world markets threaten to cut into the rapacious profits demanded by mining corporations and their shareholders.

This is part of a broader trend of job cuts confronting the working class in numerous sectors, including telecommunications, banking, manufacturing, IT, aviation, education and hospitality.

According to the Australian Bureau of Statistics (ABS), the official unemployment rate, seasonally adjusted, rose from 4 percent in May to 4.1 percent in June. This represents an additional 9,700 people who were unable to find work. The figures show a total of 608,200 people unemployed, 95,800 more than in June 2023, when the unemployment rate was at 3.5 percent.

In addition, the ABS data show that 6.5 percent of the workforce is underemployed and seeking more hours of work, meaning the total under-utilisation rate is 10.5 percent.

These official figures are a substantial underestimate of the actual situation. Market research firm Roy Morgan estimates the real rate of unemployment in June at 8.3 percent, with a total of around 2.7 million people (17.3 percent of the labour force) either unemployed or under-utilised.

Among those having the most difficulty finding work are demographics that are already economically vulnerable. According to the ABS, the youth unemployment rate, at 9.6 percent, is more than double the overall figure and the data also show a striking discrepancy in unemployment figures between socioeconomic regions.

The unemployment rate in Sydney’s wealthy eastern suburbs was 2.5 percent in June, less than half that of working-class areas such as Parramatta (5.1 percent) or the city’s south west (5.4 percent). In Melbourne’s west, the June unemployment rate was 6.2 percent, compared with 3.3 percent in the inner south. Inner-city Brisbane had a jobless rate of 3.2 percent, while Logan recorded 5.4 percent.

Compounding the social crisis in these working-class areas, many of those where unemployment is highest are also experiencing the worst rental pain.

Numerous economists and researchers are warning that finding work will become increasingly difficult over the coming months and years.

Moody’s economist Harry Murphy Cruise anticipates the official unemployment rate will increase to 4.5 per cent by the middle of 2025.

According to data from ANZ-Indeed, the number of job advertisements fell for a fifth straight month in June, down 2.2 percent from May and 17.6 percent from June 2023. The most affected jobs in June were cleaners, tradespeople and food service workers.

Another job advertisement platform, Seek, found that the number of applications per advertised job increased by 3 percent from May to June.

The hardest hit industries on Seek were hospitality and tourism, where there had been a 28.4 percent drop in job ads over the past year, and information technology, which saw a 30 percent decline.

In mid-July, CreditorWatch forecast that 1 in 11 hospitality businesses will fail in the next year, putting more people out of work. The credit reporting bureau attributed this to the sector’s “heavy reliance on discretionary spending, which has dried up as customers tighten their belts to cover increases in mortgage payments, rents, power bills and other essentials.”

CJ’s Group, master licensee for US fast-food chain Carl’s Jr, entered voluntary administration late last month, immediately shuttering 20 outlets and standing down hundreds of workers.

Good Group Australia, which operated a string of steak restaurants and Asian-fusion venues, entered voluntary administration and closed its doors in May, destroying at least 200 jobs.

Almost 1,000 workers, mostly in Melbourne, are set to lose their jobs at Crown Resorts as the company undergoes a major restructuring operation. This follows the slashing of 100 jobs at Crown Resorts in Sydney last year.

Artificial Intelligence (AI), has the potential to develop the productivity of labour in ways that enhance living standards for all. However, under capitalism, this, like all technological advancements, will be used to slash jobs and drive up corporate and shareholder profits. A report by analytics platform Faethm estimates that some 2.7 million Australian jobs are at risk from automation by 2035.

“Everyone is focusing on cost efficiency, reductions in staffing levels, the greater use of technology and AI [artificial intelligence] … you are seeing in almost all those white-collar areas, a pressure on reducing numbers,” Lendlease chairman and Westpac director Michael Ullmer declared in February.

Australia’s major banks cut more than 2,000 staff in 2023. This year, Westpac announced a further 132 jobs would be outsourced to India and the Philippines, Commonwealth Bank announced 83 job cuts and ANZ is expected to sack up to 170 staff in its business banking team. The cost slashing has continued, despite the fact that the “big four” banks (also including NAB) reported a combined profit after tax of $15 billion in the first half of this year.

Telecommunications provider Telstra is in the process of slashing 2,800 jobs, 9 percent of its workforce, by the end of the year. This follows 500 job cuts last year.

The impact of technological advances on jobs is by no means limited to white-collar” positions. Major supermarket chain Coles last week opened a new, highly automated distribution centre in Western Sydney which will replace two existing warehouses, cutting around 350 jobs by the end of the year.

Labor Prime Minister Anthony Albanese spoke at the official opening of the new Coles facility, falsely promoting it as a boon for jobs in the region. This underscores the pro-business austerity agenda of Labor governments at every level, state, territory and federal.

Service NSW, the state’s customer service agency, is undergoing a major restructure at the hands of the Labor government. Around 235 full-time positions have already been identified for the first wave of cuts but the full impact will not be known until later in the year. According to 7News, Service NSW chief executive Greg Wells told staff last month that some divisions would be cut by up to 60 percent.

Up to 200 non-teaching positions are “under review” at state-owned vocational education and training provider TAFE NSW.

Thousands more public sector jobs have been slashed by Labor governments around the country, including some 4,000 layoffs announced late last year in Victoria, eliminating 10 percent of the state’s public service.

Other Labor government policies are indirectly leading to the mass destruction of jobs. In a move aimed at making overseas students and immigrants scapegoats for Australia’s deepening cost-of-living, housing and social crisis, Albanese’s government plans to drastically reduce international student numbers. University of Sydney modelling has estimated that this may result in 21,922 direct and indirect job losses in 2025.

The federal Labor government has fully supported repeated interest rate rises by the Reserve Bank of Australia. This policy is not directed at reducing inflation, as is claimed, but at driving the economy into recession and increasing unemployment in order to shut down demands for higher wages.

Together with the global descent into war and barbarism, the deepening social crisis at home is producing growing anger and opposition among workers. The lead role in suppressing any struggle against the assault on jobs, wages and living conditions is being played by the corporatised trade unions which serve as an industrial police force of governments and big business. 

Market gyrations a symptom of a deep-seated crisis

Nick Beams

The gyrations on Wall Street and the Tokyo stock market last week, recalling those of 2008 and even the collapse of October 1987, have seen media pundits, commentators and financial analysts scratching their heads as they try to provide an explanation.

A woman walks by monitors showing Japan's Nikkei 225 index at a securities firm in Tokyo. [AP Photo/Hiro Komae]

When markets open this week, they will be slightly down on what they were after several days of turmoil, but no one is confident that any lasting stability has been restored.

Various explanations are being offered. One of the most prominent points to the lower-than-expected new US jobs numbers in July, 114,000 as compared to estimates of 175,000, and the fear that this indicates a coming recession in the economy.

Others maintain this cannot be the explanation because the number of new jobs created was still a relatively healthy number and was not the lowest so far this year. According to this view, the key factor was the surprise decision by the Bank of Japan to lift its base interest rate into positive territory to halt the downward slide of the yen on currency markets.

They maintain this led to a contraction in the so-called carry trade in which investors borrow cheap yen and then invest them in higher yielding assets in the US to make a profit. The rise in the yen’s value because of the BoJ’s actions led to a sell-off of stocks, mainly in the high-tech area.

Another explanation is that the sell-off was the result of the bubble in artificial intelligence (AI) starting to collapse as the high-blown expectations of the returns came up against the reality of lower and slower real gains.

Those who point to this factor note, for example, that the rise in the shares of Nvidia, the leading chipmaker for AI, had been responsible singled-handedly for almost one-third of the total rise in the market in the first six months of 2024. In that time two-thirds of the rise in the S&P 500 was linked to the handful of tech stocks known as the Magnificent Seven – Alphabet (the owner of Google), Meta (the owner of Facebook), Microsoft, Apple, Amazon, Nvidia and Tesla.

Whatever the different explanations of the immediate trigger or combination of factors there is no doubt about the extent of the turmoil which has seen confidence severely shaken.

The Financial Times reported that as the sell-off was developing last Monday, “officials and traders at the New York Stock Exchange were discussing whether circuit breakers would force a market wide trading halt for the first time since the outbreak of the coronavirus pandemic.”

It noted that by the end of the day almost 90 percent of all stocks in a worldwide index “had fallen in an indiscriminate global selloff.”

On Wall Street the Vix volatility index, known as the “fear gauge,” went as high as 65.73 from a level of below 20. It was the third highest level since records started to be collected in 1992, exceeded only by levels reached in the crisis of 2008 and at the start of the pandemic in 2020.

In Tokyo, stocks had started to fall on the preceding Friday on the back of the BoJ’s interest rate decision and the upward movement in the value of the yen because of its effect on the ability of major Japanese companies to compete and profit from their sales in world markets.

Following the release of the US jobs data, the selloff on Friday turned into a rout when trading began on Monday morning, setting the stage for a plunge on Wall Street.

An article in the FT cited a fund manager who recalled that at the time of the nuclear plant explosion at Fukushima in 2011 there was talk of evacuating Tokyo, but all it took to wipe billions off the Japanese markets was a “soft US jobs report and a modest hike in the Bank of Japan’s overnight rate to send the Nikkei average down 12 percent in a day” and that the whole market was “trading like a penny stock.”

In the space of a week, the article noted “the broad Topix Index lurched drunkenly from being one of the best performing benchmarks of 2024 to one of the worst, and then back to narrowly positive territory.”

The single day fall in the Japanese market was the most significant such event since the Wall Street and global market crash of October 1987. According to calculations by analysts at Goldman Sachs reported in the New York Times, the three-day loss of 20 percent in Japanese stocks through to last Monday was the largest since 1950.

The impact of the carry trade on Wall Street has attracted considerable attention. Because of the anarchy and chaos of the so-called free market, no one can put an accurate figure on its extent, with estimates ranging from billions of dollars to trillions.

For example, Bloomberg reported that the amount of money involved is disputed and that “estimates range from tens of billions of dollars into the trillions.”

The New York Times reported that “a tremendous amount of money has been borrowed in yen by investors outside Japan, with economists at the European Bank ING estimating that these cross-border loans have increased by more than $721 billion since 2021.”

Long-time FT financial columnist John Plender reported that the dynamics of the unwinding of the yen carry trade were difficult to determine because of the data, but the financial firm TS Lombard had estimated “investors may need to find $1.1 trillion to pay off yen carry trade borrowing.”

The rise of the yen carry trade has been in operation since the 1990s, but there appears to have been an acceleration in the recent period. In late 2021 the US Federal Reserve ended its quantitative easing – the buying of government bonds keeping interest rates at historic low levels – and then began lifting interest rates sharply in 2022. This led to an explosion in the carry trade to continue financial arrangements and profit-making based on cheap money.

The basic problem with all the analysis in the financial press is that while it provides some important and significant data, it is at best superficial because it does not seek to probe the underlying forces at work in the capitalist system. It deals only with the transmission mechanisms by which the fundamental historic crisis of the capitalist system is expressed in the financial markets.

This leads to the kind of bromides that were offered in an article published in the Wall Street Journal which declared: “A crash driven by complex undercurrents is the most benign kind of crash because it doesn’t reflect a deeper problem. ‘Black Monday’ in 1987 ended up being a blip, and even the 1998 Russian crisis that took down Long-Term Capital Management didn’t keep equities down for that long.”

This is a complete misreading of history and the forces at work which produce continual financial storms. The crash of 1987 marked a major turning point in that the stock market was only “saved” by the commitment of the Fed to supply liquidity.

This decision was not a one off. It inaugurated a new agenda advanced by the then Fed chair Alan Greenspan, continued by his successors, that its task was not to prevent the development of financial bubbles based on speculation, but to supply free money when they burst to facilitate a new round of speculation.

The collapse of Long-Term Capital Management and the $3 billion intervention by the New York Fed to prevent a financial market disaster was a preview of the crisis of 2008 which had major consequences for the working class, including wage cuts, unemployment and the repossession of homes.

The injection of ultra-cheap money into the financial system has created a huge inverse pyramid of fictitious capital which embodies no real value, divorced from the real economy,  and in and of itself, in the final analysis, is but a claim on the surplus value extracted from the working class. The bail-out operations by the Fed to sustain it cannot go in indefinitely.

Finance capital will be driven to respond, and is already responding, to this crisis by demanding a full-scale assault on the social position of the working class, not only though the cutting of wages and the destruction of vital social spending, but with the imposition of authoritarian and even fascist forms of rule to enforce it.