7 Nov 2024

Booming US economy is a mirage

Nick Beams


For the most part, commentary on the state of the US economy directs attention to its immediate appearance of strength with forecasts for its future direction, focused no further than on what effects movements in the Fed’s interest rate, up or down, might have.

It is pointed out that the US growth rate is higher than its counterparts in Europe and Japan; the Chinese economy is slowing and the prospect of its GDP becoming larger than the US is receding; consumer spending remains “resilient;” the stock market continues to hit record highs as a tech boom takes hold; the official unemployment level is at an historic low; and the US has achieved a “soft landing” after experiencing the highest level of inflation in four decades.

A trader works on the floor of the New York Stock Exchange [AP Photo/Craig Ruttle]

But every so often there is an exception, and someone looks “under the hood” to reveal deeper processes. The result is that a rather different picture emerges.

Such is an article which appeared in the Financial Times on Tuesday by Ruchir Sharma, the chair of Rockefeller International, under the title “The US boom is a mirage.”

As millions went to the polls, he pointed to the contrast between the official narrative and broad sentiment based on lived experience.

While the economy looked unusually strong with growth averaging nearly 3 percent for nine straight quarters, and money was flowing in from overseas to push the stock market to record highs, “voters remain pessimistic about their economic and financial prospects.”

Data contained in the rest of the article showed the reason why. The old saying, going back to the Kennedy administration, that “a rising tide lifts all boats” no longer applies, if indeed it ever really did.

Sharma explained that “US growth was a mirage for most Americans,” driven by rising wealth and increased discretionary spending by the richest and “distorted by growing profits for the biggest corporations,” with growth “heavily dependent on borrowing and spending by the government.”

As for claims of the “unsinkable” US consumer, a growing number of Americans were being priced out of homes and falling behind on credit card debt.

“The bottom 40 percent by income now account for 20 percent of all spending while the richest 20 percent account for 40 percent. That is the widest gap on record and it is likely to widen even further.”

Inflation has come down on official figures, but the past price hikes remain and so most “Americans now spend so much on essentials such as food, they have little left for extra like travel or eating out.”

Other figures on inequality could be cited, such as the fact that a tiny elite owns more wealth than the bottom half of the population and the wealth of US billionaires is now $5.5 trillion, having increased by more than 90 percent since the beginning of the pandemic.

Sharma characterised the US economy as a gilded economy with a “shiny but thin veneer.”

“In the corporate sphere, the 10 largest companies account for 36 percent of stock market cap (market capitalisation)—a peak since the data began in 1980. The most valuable US stock trades for 750 times more than any stock in the bottom quartile—up from just 200 times 10 years ago and the widest gap since the early 1930s.”

As for smaller companies, they are haunted by anxiety, uncertainty about the economy and their “confidence is at lows rarely seen outside recessions.”

One of the main indices of the developing crisis of US capitalism—Sharma does not call it a crisis but the figures he cites lead to that characterisation—is the rise of the government deficit and debt. The budget deficit has doubled to 6 percent of GDP in the past decade and is set to go even higher,

The total debt, now at nearly $36 trillion, has risen by $17 trillion in the last decade, “matching in 10 years the increase in the previous 240 years—almost back to US independence.”

This has major financial implications. Following the end of the near-zero interest rate regime two years ago, financial investors, commonly known as “bond vigilantes,” “woke from a long slumber and began punishing nations for fiscal profligacy, starting with frontier markets such as Sri Lanka and Ghana, shifting to emerging markets like Brazil and Turkey and most recently developed markets, first the UK and now France.”

The US has so far not been affected because of the role of the dollar as the world currency, but “no country has been immune forever.”

He concluded by noting that “empires have often failed when they could no longer cover their own debt and the way the US is headed, its next president may learn this lesson the hard way.”

As Sharma correctly pointed out, the worsening financial situation will, sooner rather than later, have major political implications. Whatever government emerges from the election, it will have the task of deepening to an unprecedented degree the attacks which have been carried out against the working class.

If Trump captures the presidency, either through the ballot or by organising a coup for which he has been preparing, it will bring a major political shock for those sections of the working class which have voted for him.

Trump and the leading forces in his MAGA entourage are seeking to build a fascist movement, directed against the forcible suppression of the working class. That is why they have won support from not insignificant sections of the capitalist oligarchy, not only Elon Musk but others such as the billionaire head of the Blackstone hedge fund Steven Schwartzman, while others have made clear they will accommodate themselves to a Trump presidency.

The tens of millions voting for Trump have done so not because they are supporters of fascism and authoritarian forms of rule—far from it. One of the chief factors is the long-developed hostility to the Democrats, heightened by the severe cuts in living standards in the four years of the Biden-Harris administration.

Trump’s campaign consisted of two components: a vicious campaign against immigrants and asylum seekers to scapegoat them for economic and social ills of the country, combined with assertions—recalling nothing so much as the snake oil salesman of the past—that he will somehow magically fix the economy.

Insofar as any concrete economic measures are advanced, they are based on the claim that sweeping tariff hikes plus major tax cuts will lead to an economic boom, ensuring higher wages, jobs growth, protection of Social Security, improvements in education and other benefits. It seems that the only thing left out was a cure for cancer.

Speaking to the Economic Club of New York during the course of his campaign, Trump cited the administration of president McKinley in the 1890s when tariffs were the chief source of government revenue, and claimed they could be again. The ludicrous character of such an agenda can be seen in the vast changes in the US and global economy in the 130 years since then.

Objective economic reality has a way of bursting through even the rhetoric of the most persuasive huckster, and the objective reality of the US economy is that it is no longer the rising imperialist power it was in McKinley’s day but one marked by a deep internal rot and decay, to which Sharma’s article points.

Republicans capture US Senate, near control of House of Representatives

Patrick Martin


Along with fascist ex-president Donald Trump’s victory in the presidential contest over Democratic Vice President Kamala Harris, the Republican Party won control of the US Senate in Tuesday’s voting and appeared to be clinging to control of the House of Representatives, where many close contests remain to be decided.

Senate Minority Leader Mitch McConnell R-Ky. speaks during a news conference about the election at the Capitol in Washington, Wednesday, Nov. 6, 2024. [AP Photo/Jose Luis Magana]

Control of the Senate will be critical to the installation of the new Trump administration, since Senate confirmation is required for every cabinet and top sub-cabinet official, as well as the appointment of federal judges and top military officers. At this point, the new Senate has a 52-45 Republican majority, which could go as high as 55-45 if the Republicans win all three of the seats that remain undecided. They presently lead in one of the three.

The position in the House of Representatives is currently less definitive. Republicans held only an eight-seat majority, 220-212, with three seats vacant, on Election Day. As of this writing, Republicans had won 216 seats and the Democrats 209, with 10 seats undecided.

There were 34 of the 100 seats in the Senate at stake, with 24 held by the Democrats and only 10 by the Republicans. Eighteen Democrats have won reelection or replaced retiring Democrats, while the Republicans retained all 10 of their seats. Republicans captured the open seat in West Virginia vacated by retiring Democrat Joe Manchin and defeated two Democratic incumbents, Sherrod Brown in Ohio and Jon Tester in Montana, for a net gain so far of three seats.

In the three seats where no winner has yet been declared, Democratic Representative Ruben Gallego led Republican election denier Kari Lake in Arizona by 52,581votes, but with only 69 percent of the votes counted. Republican hedge fund multi-millionaire David McCormick held a lead of 29,845 votes over incumbent Democrat Robert Casey in Pennsylvania with less than 5 percent of the vote still outstanding.

In Nevada Democratic Senator Jacky Rosen led her Republican challenger Sam Brown by 12,699 votes with 10 percent still to be counted.

The three new Republican senators-elect are all extreme reactionaries aligned with Trump, and in some cases personally chosen by him. The new senator from West Virginia will be Governor Jim Justice, a billionaire coal baron who is the richest man in the impoverished state. Bernie Moreno, the victor in Ohio, is a wealthy car dealer hand-picked for the race by Trump.

In Montana, the Republican winner, Tim Sheehy, is another multi-millionaire, a former Navy SEAL who made disparaging remarks about women and Native Americans in the course of the campaign. Only briefly a resident of Montana, Sheehy was imposed on the state Republican Party by the Trump campaign.

While the Democrats effectively conceded the West Virginia race when Manchin announced his retirement, their defeats in Ohio and Montana came despite vast outlays of campaign cash.

The Ohio contest was the most expensive in American history, with more than $500 million spent by the two capitalist parties and their supporting Super PACs. The Montana race was even more expensive on a per capita basis, with more than $250 million spent in a race where fewer than 600,000 people cast ballots—more than $400 per vote.

Nine-figure sums were expended in other close Senate contests: $240 million in Pennsylvania and $180 million in Michigan, as well as in Wisconsin, Arizona, Texas and Florida. In nearly every race, the Democratic Party raised and spent more money than the Republicans.

In contests for the House of Representatives—where the Democrats again enjoyed a sizable financial advantage—results were more mixed than for the Senate and added up to little or no change. In the Northeast and Midwest, the Democrats defeated three Republican incumbents in New York state, but lost two of their own seats in Pennsylvania and one in Michigan.

Five seats switched parties in the South, all because of changes in district boundaries, with the Republicans gaining three seats in North Carolina through a gerrymander, while Democrats gained seats in Louisiana and Alabama by court orders overturning racially biased district lines. Not a single seat changed hands throughout this vast region by a decision of the voters, so consistently are the boundaries drawn to protect incumbents.

In the West, Democrats captured a Republican seat outside Portland, Oregon, but Democratic incumbent Mary Peltola in Alaska lost her race for reelection.

This patchwork of results left the Republicans with a seven-seat majority, pending the outcome of extremely close contests in Maryland, Iowa, and Arizona, and for seven seats in California, where nearly all voting is by mail and the count has historically dragged on for more than a week. Democrats would have to sweep all the remaining undecided races to gain control of the House.

One feature of the congressional races confirms the steady rightward movement of the Democratic Party, which has more and more become an instrument of the military-intelligence apparatus, even as the Republican Party has become a fascist organization subordinated to the would-be dictator Trump.

The contingent of Democratic members of Congress with military-intelligence backgrounds—in most cases moving directly from the national-security state to the legislature—continues to grow in size and influence.

Two of the CIA Democrats, as the WSWS has labeled them, moved up from the House to the Senate, with former National Security Council official Andy Kim easily winning the open Senate seat in New Jersey, and former CIA, National Security Council and Pentagon official Elissa Slotkin narrowly winning in her race for the open Senate seat in Michigan. Former military officer and Democratic congressman Jeff Jackson won his race for attorney general of North Carolina.

All nine of the CIA Democrats seeking to retain their seats in the House won—Jared Golden in Maine, Jake Auchincloss in Massachusetts, Pat Riley in New York, Mikie Sherrill in New Jersey, Chrissy Houlahan and Chris DeLuzio in Pennsylvania, Dan Davis in North Carolina, Jared Crow in Colorado, and Sara Jacobs in California.

And two more such figures are headed to Washington. Retired Army lieutenant colonel Eugene Vindman won a narrow victory in Virginia’s Seventh Congressional District, which extends from northern Virginia to Richmond. Vindman and his brother Alexander were on the National Security Council in the Trump administration and played key roles in triggering the first impeachment of Trump in 2019 on charges of delaying military aid to Ukraine. Vindman will replace Democrat Abigail Spanberger, a former CIA agent who stepped down in order to run for governor of Virginia next year.

In New Hampshire’s Second Congressional District, retiring Democrat Annie Kuster will be succeeded by Maggie Goodlander, the wife of Biden’s national security adviser Jake Sullivan. She is herself a veteran of the military-intelligence apparatus, including working on the staff of the Senate Armed Services Committee for senators John McCain and Joe Lieberman, and a decade in the Navy Reserve as an intelligence officer.

Another 21 Democratic candidates from military-intelligence backgrounds lost their races, some because they were running in heavily Republican districts, others in competitive races where they were swamped by the overall collapse in support for the Democratic Party.

6 Nov 2024

UPS pushing forward with automation and facility closures, threatening thousands more jobs

Alex Findijs



UPS Velocity warehouse in Louisville, Kentucky. [Photo: UPS Media]

During a Third Quarter earnings call last week, UPS management announced “progress” in the company’s plans to reduce capacity, automate operations and slash jobs. Management said it has reduced capacity by 1 million packages so far this year, the product of the closure of 45 operations, including nine full buildings.

Part of the “Network for the Future” cost-cutting plan, the closures resulted in a reported 8 percent improvement in the number of parcels processed per work hour, equivalent to “an efficiency gain of 11 million hours.”

This reduction in capacity is aimed at re-sizing UPS’s operations to shrink the company’s surplus capacity of an average of 12 million parcels a day, double the surplus from years before the pandemic. The surplus capacity is due to both the expansion of operations to meet increased demand during the height of the pandemic and a steady decline in demand over the past few years. Daily volume in quarter three 2021 was 23.4 million but declined to 20.3 million the same time last year.

Reductions in capacity really means a reduction in jobs. By levering automation to increase efficiency, management is seeking to cut labor costs and boost profitability at the expense of the working class.

Towards this end UPS announced earlier this year that it would close around 200 facilities in the US while tripling the number of automated facilities to 400 by 2028. In preparation for this the company is laying off more than 10,000 people in middle and lower management, and it already employs tens of thousands fewer workers than it did a few year ago. But this is only the start of a larger jobs bloodbath.

Closures will be joined with consolidation. UPS is boasting plans to consolidate four facilities in Massachusetts, Connecticut and Rhode Island and has highlighted its operations in Chalk Hill, Texas, and its New York Capital Village Center hub for closure.

Earlier this year UPS reported its “volume-per-resource” ratio—calculated as the average daily volume divided by the number of US employees—as 51. The company plans to increase that ratio to 59 by 2026, a 15.7 percent increase. With UPS looking to reduce capacity to match lower demand, that ratio can only come through mass layoffs.

These changes are already yielding increased profits for company shareholders. UPS reported a 5.6 percent increase in revenue in quarter three with a 22.8 percent increase in “non-GAAP adjusted operating profit,” a measure of income that excludes non-recurring costs. The quarterly report also reported a 4.1 percent decrease in “cost per piece,” demonstrating the effect automation is having on the reduction of the company’s operational costs.

This year CEO Carol Tomé reported that “We now process 63 percent of the volume in our hubs in some sort of an automated way. That’s up five percentage points from a year ago.”

These changes are not isolated to UPS. Rival FedEx is also implementing automation schemes at 50 locations as part of its “Network 2.0” plan, aiming to save $2 billion in costs by 2027 through these changes. Meanwhile, the United States Postal Service (USPS) is seeking to consolidate its operations into large hubs, eliminating many smaller offices, particularly in rural areas as part of the “Delivering for America” plan, which threatens the jobs of tens of thousands of postal workers.

In the US the auto industry is slashing thousands of jobs after the phony “stand up strike” of the UAW bureaucracy sold out 150,000 autoworkers. This year Stellantis cut over 2,000 jobs at its Warren Truck facility, while Ford has cut 1,400 jobs at its electric truck plant in Dearborn, Michigan. Internationally, Volkswagen has announced that it will be closing at least three plants in Germany, eliminating tens of thousands of jobs, while Stellantis is looking to cut 25,000 jobs across Italy. Volkswagen has also demanded a 20 percent pay cut from its 120,000 workers in Germany to save 2 billion euros a year.

Boeing has also announced plans to lay off 17,000 workers across its global operations, and thousands of writers and actors in Hollywood face being replaced by AI after their strikes were betrayed last year.

The changes underway at UPS further expose the bankrupt claims of the Teamsters bureaucracy that the 2023 UPS contract was a “historic” victory for workers. Instead it was a historic betrayal, which is being used to carry out some of the deepest cuts in the company’s history.

The Teamsters bureaucracy has maintained a guilty silence over the last year as job losses continue to mount, outside of occasional references to a “contract enforcement campaign,” which is cover for the fact that the deal contained no protections against layoffs. Last year, the Teamsters bureaucracy also abandoned 22,000 Yellow freight workers who lost their jobs when the company went bankrupt.

The collaboration between management and the union bureaucrats is so close that Tomé boasted of the deal last year: “[W]e can put together plans to mitigate that cost [of pay increases], plans to drive productivity inside of our business through automation, which, oh, by the way, we retained the ability to do so.”

The union bureaucrats are doing nothing to mobilize opposition to layoffs because they accept the company’s so-called “right” to profit and are working with management to impose them. Bureaucrats like Sean O’Brien, who is one of 160 Teamsters officials who make more than $200,000 a year, have aligned their interests with management to preserve their inflated salaries and their positions as labor contractors for corporations. This finds further expression in O’Brien’s courting of Donald Trump and fascist Republican Senator Josh Hawley as a servant to capitalist reaction.

Netanyahu fires Defence Minister Yoav Gallant, signaling escalation of war

Jean Shaoul


On Tuesday, Israel’s Prime Minister Benjamin Netanyahu fired Defence Minister Yoav Gallant, citing significant disagreements between them over how Israel’s wars in Gaza and Lebanon should be managed.

Netanyahu said, “In the midst of a war, more than ever, full trust is required between the prime minister and the defence minister. Unfortunately, although in the first months of the campaign there was such trust and there was very fruitful work, over the past few months this trust has cracked between me and the defence minister.”

U.S. Secretary of State Antony Blinken inspects progress of the Gaza genocide during a visit to the Kerem Shalom border crossing between Iseral and Gaza. Behind him walks Israeli Defense Minister Yoav Gallant, who called the Palestinians "human animals." (Evelyn Hockstein/Pool Photo via AP) [AP Photo]

Itamar Ben-Gvir, the fascistic National Security Minister and leader of the Jewish Power Party, applauded the move, saying that Netanyahu had “made the right decision” and that it was “impossible to achieve a total victory” as long as Gallant was Defence Minister. His comments express the government’s intention to pursue an even more aggressive stance in Israel’s wars on the Palestinians in Gaza and the West Bank and against Iran and its allies in Lebanon, Syria and Yemen.

Gallant is to be replaced by Foreign Minister Israel Katz, a member of Netanyahu’s Likud Party who is publicly opposed to a Palestinian state in any form. Gideon Sa’ar, a former Likud member who split with Netanyahu to form his own party New Hope and joined his coalition last September, will become foreign minister.

Responding to calls from opposition leaders, anti-Netanyahu protest groups and hostages’ families, thousands of Israelis took to the streets in protest. In Tel Aviv, they marched on the Ayalon Highway where the police blocked them. In Jerusalem, around 1,000 demonstrators gathered near Netanyahu’s residence. Other protests took place in Haifa and Be’er Sheva.

That Netanyahu and Gallant were barely on speaking terms was well known. Netanyahu had tried to sack him in March 2023 over Gallant’s opposition to his plans to neuter the judiciary and establish an authoritarian regime and had only backed down in the face of mass opposition to his move.

Gallant is a vicious war hawk, whose disagreements with Netanyahu are over how best to assert Zionism’s interests militarily. In the immediate aftermath of October 7 he infamously ordered a “complete siege of Gaza, no electricity, no food, no fuel, everything is closed,” saying, “We are fighting human animals.” He had earlier warned Lebanon saying in August 2023 that Israel would not hesitate to attack Hezbollah and “return Lebanon to the Stone Age” if Israel was attacked. Days after the start of Israel’s all-out war on Gaza, he threatened, “What we can do in Gaza, we can also do in Beirut.”

In a speech, on his sacking, Gallant declared, “The decision to dismiss me comes after a series of impressive achievements, unprecedented in the history of the State of Israel. Achievements of the IDF, the Shin Bet, the Mossad and the entire security system. We struck in Gaza and Lebanon, in Judea and Samaria. We eliminated terrorist leaders across the Middle East and, for the first time ever, carried out a precise and lethal strike in Iran, among other operations. I am proud of the security establishment’s achievements. I trust the commanders and the soldiers. Israel’s security has been and remains the mission of my life, and I am committed to it. Since October 7, I have focused on one and only one issue: victory in the war.”

He said he had been fired over disagreements on three issues: the need to end an exemption from conscription for almost all ultraorthodox Jews, the importance of a deal to free hostages still held by Hamas in Gaza, and the need for an immediate, all-encompassing commission of inquiry into the failings that allowed the Palestinian militant group’s October 7, 2023 incursion, including into those of the Israel Defense Forces, the security services and the government, including Netanyahu.

The row over ending the ultra-orthodox Jews’ (known as Haredim) exemption from compulsory military service if they are studying in religious seminaries (yeshivas) was placed centre stage by Gallant. It has roiled Netanyahu’s coalition, amid increasing concern over the IDF’s lack of manpower to prosecute war simultaneously on the Palestinians in Gaza and the West Bank, Hezbollah in Lebanon and against Iran and its allies in Syria and Yemen.

Gallant insisted that “everyone of conscription age must serve in the IDF and defend the State of Israel. This issue is no longer just a social matter; it is the most critical matter for our existence—the security of the State of Israel and the people living in Zion. In this campaign, we have lost hundreds of soldiers, we have suffered thousands of wounded and disabled, and the war is still continuing. The coming years will present us with complex challenges; wars are not over, and the sound of battle has not ceased… Under these circumstances, there is no choice—everyone must serve in the IDF and participate in the mission to defend the State of Israel.”

At least 772 soldiers and security personnel have lost their lives in the genocidal assault on Gaza and at least 12,000 more have been injured—while tens of thousands of reservists have been forced to do months of reserve duty, provoking anger among secular Israelis already alienated by the increasing dominance of the religious authorities over daily life.

Last June, the High Court ordered an end to the Haredi exemption by November this year, with Attorney General Gali Baharav-Miara later ruling that draft evaders would not be entitled to government allowances and day-care subsidies. The ultra-Orthodox do not work and rely on the allowances negotiated by the ultra-religious parties as the price for their support for keeping Netanyahu in power.

A government-supported bill to overturn the Attorney General’s ruling, and subsidize day care for children of full-time yeshiva students who dodge the draft at a cost of $54 million—in return for the support of the religious parties for the 2025 budget—prompted uproar. When at least nine members of his own coalition members, including Gallant, threatened to vote down the bill, Netanyahu was forced to withdraw it.

Netanyahu has refused to consider any deal to rescue the remaining hostages, believed to number around one hundred, still held in Gaza. Last week, a court partially lifted a gag order on an investigation into the leaks over discussions with Hamas over a deal to release the hostages that were published last August by a fake journalist in Britain’s Jewish Chronicle and Germany’s Bild to undermine negotiations. Five people, including one of Netanyahu’s media advisors, have been arrested. The Hostages and Missing Families Forum expressed their “outrage and deep concern at discovering” that officials had “worked to undermine public support for the hostage deal.”

Gallant’s sacking comes amid increasing concerns within the military establishment that the war in Lebanon and Gaza has exhausted itself and risks heavy troop losses if the IDF is required to remain there. Sections of the military would prefer a deal to secure a ceasefire to concentrate on the conflict with Lebanon and Iran.

Gallant had played a key role in discussions with the Biden administration which has funded and directed Israel’s war of annihilation of the Palestinians in Gaza, and its war on Iran and its allies in Lebanon, Syria and Yemen. He was sacked on the day it became clear that Donald Trump had won the US presidency. Netanyahu congratulated Trump effusively for what he called “history’s greatest comeback” and called his campaign “a huge victory” and “a new beginning for America and a powerful recommitment to the great alliance between Israel and America.”

Trump, who draws significant support from the US Evangelical Christian movement which has long support the Zionist project, has made contradictory remarks on the campaign trail about the war in Gaza, alternately condemning the anti-Israel protests while promising peace in Gaza and Lebanon to US voters of Arab origin. But Netanyahu calculates that he will be backed by Trump once he becomes president.

During his 2017-2021 term of office, Trump gave Netanyahu his full support—closing down the Palestine Liberation Organisation’s office in Washington; recognising Jerusalem as Israel’s capital; moving the US embassy to Jerusalem; recognising Israeli sovereignty over the occupied Syrian Golan Heights; withdrawing from the United Nations Human Rights Council; cutting $200 million funding to the Palestinian Authority in the West Bank; unilaterally abandoning the nuclear treaty with Iran; negotiating the Abraham Accords between Israel and the United Arab Emirates, Bahrain, Sudan and Morocco; designating Iran’s Islamic Revolutionary Guard Corps (IRGC) a terrorist organisation; assassinating its leader General Qassem Soleimani; and strengthening US ties with the dictators in Saudi Arabia and Egypt.

Recognising the threat posed by Trump’s call for Israel to end its wars in Gaza and Lebanon before he takes office in January, in sacking Gallant, Netanyahu is following Israel’s well-worn policy of “creating facts on the ground”—preparing for an even more aggressive military policy now so that the incoming Trump administration will have to support him.

5 Nov 2024

An insight into China’s high-tech development and its implications

Nick Beams


A major article published on Bloomberg at the end of last month provides a detailed analysis of the US high-tech economic war against China, and draws the conclusion, as indicated in the headline, that “US efforts to contain [Chinese president] Xi’s push for tech supremacy are faltering.”

Chinese President Xi Jinping [AP Photo/Maxim Shemetov]

The consequences, as indicated in the article at least to some extent, are that the US drive against China will assume ever more aggressive forms, bringing the prospect of war even closer.

The article began by noting that “at a glance” the US campaign appeared to be successful given that Chinese tech giants had been cut off from access to the highest level of chip making capacity.

This was because the US has been successful in pressuring the Dutch firm ASML into refusing to supply China with its “one-of-a-kind” machines necessary to make the most advanced chips.

But deeper research showed that despite export controls and financial sanctions China was making “steady progress” in developing the industries of the future and that the Made in China 2025 program launched a decade ago by Xi, “has largely been a success.”

“Of 13 key technologies tracked by Bloomberg researchers, China has achieved a global leadership in five of them and is catching up fast in seven others.”

The article cited comments by Adam Posen, president of the Washington-based think tank, the Institute for International Economics, who said: “China’s technological rise will not be stymied, and might not even be slowed, by US restrictions.” The only exception would be “draconian ones” that slow the pace of innovation in the US and globally.

It pointed to the vast transformation that has taken place over the past three decades in the very structure of the world economy, noting that China’s “manufactured goods trade surplus is the largest relative to global GDP since the US right after World War II.” China had taken the lead in the making of electric vehicles (EVs), batteries and solar panels.

The battle would continue whoever won the White House in the presidential election with the US focused on trying to prevent China from catching up in the manufacture of cutting-edge chips.

It is not confined to the economic sphere. As the article continued: “For policymakers in Washington and Beijing, the push to win the technology race is driven by a number of considerations, including a desire to drive development, create jobs and secure supply chains. But officials in both capitals say another factor is playing a bigger role in economic policy these days: Preparation for a potential war, even if one isn’t imminent or planned.”

On the US side, it cited remarks by US National Security Adviser Jake Sullivan in a major speech in 2022 in which he outlined a series of areas, including semiconductors, clean energy and biotech, in which he said the US would seek to “maintain as large of a lead as possible.”

Sullivan said export controls, which have increasingly been used by the Biden administration, going well beyond the tariffs and other measures introduced during the Trump presidency, were a “new strategic asset” that would be used to impose costs on adversaries and “degrade their battlefield capabilities.”

In their official statements, Chinese authorities pursue a different tack. They insist they are seeking to uphold the international free trade order which the US is in the process of upending.

But they know that US strategic planning is not only directed at trade but involves war in which the US would seek to cut off vital supplies of raw materials, particularly energy and so are seeking to develop Chinese capacity in alternative energy sources.

This means, the article noted, that “the possibility of an all-out conflict means China has no intention of degrading its manufacturing power, despite US demands that Xi’s government reduce overcapacity and rebalance the economy more towards consumption.”

There is no doubt the US bans on the export of the most developed computer chips and highly complex chip-making equipment is having an impact. But the analysis said that despite this “China continued to climb the ladder of manufacturing dominance and technological advance” and that if the US wanted to win the competition it would need to “run faster or try harder to trip China.”

This portends ever increasing economic warfare. But at a certain point this will develop into the increased use of military methods. This is because, as Shen Meng, a director at the Beijing investment bank Chanson, told the researchers while “the efforts to contain China worked in the short term” in the long run “China will find ways to circumvent this containment.”

This is not idle speculation but is reflected in the case of the Chinese telecommunications giant Huawei. In 2019 the Trump administration put a ban on the company denying it access to advanced chips necessary for its mobile phones and its sales slumped.

But it poured money into research and development and worked with domestic suppliers to develop a more advanced chip which the US considered would not be possible. While the Chinese developed chip is not top of the range, according to the article: “Huawei’s smartphone business has since recovered and is now challenging Apple.”

Paul Triolo, an analyst at a Washington-based advisory firm said that while Huawei’s AI chips were not as advanced as those produced by Apple and Nvidia “they are capable enough for many applications.”

He said China had made “major progress” towards manufacturing without the use of US tools, but this process would be slow and challenging “as the US continues to ratchet up controls targeting both tool makers and front-end manufacturing facilities.”

It may be slow but there is no denying the direction of development. Goldman Sachs has estimated that China could lift its chip self-sufficiency to 40 percent by 2030, nearly double its present level. Even though this development may not yet be top of the range it will provoke an even more aggressive response from the US.

The development of Chinese high-tech, and the increasingly bellicose response of the US towards it, underscores the utterly reactionary character of the nation-state system in which the capitalist system is rooted and the historic necessity for its abolition by the international working class in the struggle to take political power and establish socialism.

High-tech development, which like every other advance in the productive forces, is not the product of one nation but is a global product, involving the labour of workers, scientists, engineers, programmers etc., drawn from all over the world.

It contains the potential for a tremendous advance in social conditions and living standards for the world’s people. But so long as this contradiction, between its global scope and the division of the world by the nation-state system, remains, this very development brings ever-closer the danger of world war and the destruction of civilisation as the major imperialist powers seek to resolve it by establishing themselves as the dominant force.

UK budget: a pittance for crumbling, asbestos riddled schools

Margot Miller


The UK Labour government’s first budget since coming to office in July does nothing to reverse the cuts to education since 2010 or make schools safe.

The UK school estate is in a dangerous, dilapidated state, with ill maintained buildings, some literally crumbling and many thousands riddled with deadly asbestos.

A UK school building in 2015 [Photo by PeterMHertsHeritage100 / Wikimedia / CC BY-SA 4.0]

Large class sizes of children from increasingly impoverished families, diminishing support for special needs, a proscriptive curriculum creating work overload for stressed-out teachers exacerbated by punitive government Ofsted inspections--all has led to a crisis in recruitment and retention of staff.

Two recent reports underline the crisis in UK schools. The National Audit Office (NAO) concludes by noting that the provision for children with Special Educational Needs and Disabilities (SEND) is “financially unsustainable”.

Another report exposes the enormous dangers facing staff and pupils due to the widespread use of asbestos in school buildings.

The School Cuts website, run by the education trade unions with the support of charity Parentkind and the National Governance Association, estimates a sum of £12.2 billion is needed to restore spending on education to just 2010 levels.

Chancellor Rachel Reeves announced an increase in funding for schools of just £2.3 billion next year. This is not a genuine increase. The amount includes £1 billion towards the high needs funding deficit local authorities accrued providing SEND (special educational needs and disabilities) education.

The “remaining increase to the schools budget”, according to the Education Hub on the government’s website, is to pay for the 5.5 percent pay rise for teachers this year and to “help cover pay awards in 2025-26.”

The education unions pushed through the last substandard pay award--after ending industrial action--with claims that a Labour government would address the crisis in education after years of underfunding by the Tories. Reeves budget exposes these claims as false.

The budget offers nothing to address the dangerous state of the school estate. The Education Hub lists an extra £1.4 billion for the school rebuilding programme, to keep “on track to rebuild 518 schools” over 10 years. £2.1 billion is allocated to maintain existing schools, an increase of just £300 million. A further £300 million is earmarked to maintain colleges.

But everyone knows that many billions of pounds are needed, not only to build new schools but to make the existing estate safe for pupils and staff. The National Education Union’s (NEU) Daniel Kebede noted there had been a “£40 billion cumulative cut to school capital funding [for school buildings] since 2010.”

A cheap form of concrete, RAAC, was used extensively in public buildings between 1950-1980. In contact with damp in an ill-maintained building, and life-expired after 30 years, walls and ceilings are liable to collapse, posing risk to life. Despite the problem being known about for years, action in schools was only taken last year when shortly before the start of the autumn term three school buildings experienced sudden roof collapses.

Reinforced Aerated Autoclaved Concrete (RAAC), close-up view [Photo by Marco Bernardini, own work / CC BY-SA 3.0]

Even deadlier is the threat of asbestos in many public buildings, including schools. Inhaling tiny asbestos fibres causes lung diseases asbestosis or mesothelioma, a particularly aggressive cancer. A massive refurbishment of the entire school estate is long overdue.

Knowing the social and potential political impact of the scale of the crisis, the Conservative-supporting Daily Mail last month launched one of its “hot button” campaigns: “Asbestos: Britain's Hidden Killer”. Calling for the removal of asbestos in public buildings, it was launched following a “bombshell report” following an investigation by the Joint Union Asbestos Committee representing eight trade unions.

The committee found the prevalence of asbestos in hospitals and 21,500 schools built since the 1960s. Asbestos was used for insulation and as a fire retardant until banned in 1982. Hundreds of thousands of staff and pupils exposed to the invisible fibres face an untimely death, the authors predict. A period of up to 40 years may pass between exposure and the onset of mesothelioma. Death follows diagnosis after about 18 months.

Since 1980, at least 1,400 educators and 12,600 former pupils succumbed to mesothelioma after inhaling asbestos in schools. Asbestos is the UK’s biggest industrial killer, claiming 5,000 lives each year. According to the committee, “Their deaths would be the consequence of ineffective asbestos regulations and a cost-cutting culture that wrongly implies ‘asbestos is safe as long as it is not disturbed’”.

This horrific number of preventable deaths is set to grow as schools are allowed to fall into disrepair exposing more children and staff to danger. The report says that most of the UK’s 32,000 schools, except those built after 1999 when asbestos was finally banned, probably contain asbestos.

The education capital spending announced in the budget won’t even touch the sides.

“Clearing the Air”, a report published last year by Mesothelioma UK, made clear that “Based on the current speed of school and hospital rebuilding programmes in England it will take over 400 years to remove all the asbestos from schools and hospitals.”

It notes, “Previous research has found that asbestos is present in 80% of schools and 94% of hospital trusts in England. In particular, there are a large number of school and hospital buildings constructed between 1945 and 1980 using system build techniques, for example CLASP schools, where asbestos was used as an integral part of the building and cannot usually be removed without demolishing the building.”

Mesothelioma UK “estimates a total cost of removing asbestos of around £3.2 billion for removal from schools and £1.3 billion for removal from hospitals, making a total removal cost of just under £4.5 billion…. It notes, that the “Demolition of system-build schools and hospitals is estimated to cost an additional £11.2 billion on top of this.”

The record of successive governments shows they could not care less about safety in schools. Staff and pupils were among the first rushed back into schools at the height of the COVID-19 pandemic, in order to ensure their parents got back to work in offices and factories. Then opposition Labour leader and now Prime Minister Sir Keir Starmer led the charge insisting that schools stay open in a pandemic, “No ifs, no buts”.

Despite the continued horrific consequences of the pandemic, schools are denied the technology to keep the air clean and disinfected—meaning the spread of the mutating COVID virus and other respiratory illnesses.

In the budget Reeves offered peanuts in comparison to overall public spending, for rolling out of free breakfast clubs for primary school children (4-11 years) in disadvantaged areas. While this would triple investment triple for breakfast clubs, its costs is just over £30 million. Schools will still have to pay 25 percent of the cost of running them.

Reeves also announced “£15 million to begin delivery of 3,000 school-based nurseries.” The government describes the programme as “quality, affordable childcare.” The nurseries the government has in mind is not quality early years education for 3–4-year-olds--which requires substantial investment in appropriate settings led by trained nursery teachers and staff--but holding pens while parents/the “workless” are driven into cheap labour jobs.

The National Education Union has instructed Leigh Day solicitors to challenge the longstanding government position that asbestos is safe in situ unless damaged, but their record shows that whatever rhetoric they come up with, they and the other education unions will not mobilize their members to fight back.

The education unions welcomed Labour’s budget. This despite education and infrastructure spending announced being vastly below what is required and Reeves putting through ongoing spending cuts. Moreover, the accompanying Red Book to the budget states that the government “will need to carefully consider the trade-offs required to afford pay awards. Over the medium term, above-inflation pay awards are only affordable if they can be funded from improved productivity.”

If necessary it states that the recommendations of public sector pay review bodies (PRBs) could be ignored. The document warns: “If the PRBs recommend pay awards above the level departments have budgeted for, the government will have to consider the justification--for example where there are especially acute recruitment and retention demands, or where productivity improvements can unlock further funding.”

The Times on Monday reported a Treasury source who doubled down saying, “The government is clear that any future above-inflation pay rises must come alongside productivity reforms… That is the right position for both public sector workers and the taxpayer.”

4 Nov 2024

ProVeg Grants for Innovators Transforming the Global Food Industry 2025

Application Deadline:

The application deadline for the ProVeg Grants for Innovators Transforming the Global Food Industry 2025 is 1 December 2024.

Tell Me About The Award:

ProVeg Grants offers funding to organizations and projects focused on promoting dietary changes that align with ProVeg’s mission to reduce global animal consumption by 50% by 2040. Interested applicants should review the application criteria before registering their interest via a brief five-minute form. The Grants team will evaluate your submission, and if it meets the criteria, you will receive a link to a full application form.

Which Fields are Eligible?

The following fields are eligible:

  • Schools & University Engagement
  • Influencing Dietary Guidelines
  • Healthcare Interventions
  • Food Industry Events
  • Corporate Engagement, including Corporate Rankings and V-Label
  • Addressing Labelling Restrictions
  • Political Outreach
  • Movement Building, including Challenge Campaigns and Veg Festivals
  • Public Outreach & Social Media

Type:

Grant 

Who can Apply?

  • Also, the eligibility criteria include:
    Priority is given to proposals outside the UK, Germany, Netherlands, Czechia, Poland, South Africa, Spain, Belgium, Nigeria, Malaysia, and the United States.
  • Proposals from individuals or organizations focused on improving the welfare or conditions of farmed animals are not eligible.
  • Priority is given to organizations led by and employing women, people of colour, and other marginalized groups.
  • Grantees must align with ProVeg Grants’ safe space and respectful workplace values.

Which Countries Are Eligible?

All countries 

Where will the Award be Taken?

All countries 

How Many Awards?

Not specified

What is the Benefit of the Award?

Additionally, the benefits of the grants include:

  • Financial support between $5,000 and $50,000 per year, awarded at ProVeg International’s discretion.
  • Access to a network of over 200 experts in the food-system transformation space.
  • One-on-one consultations covering organizational structure, strategy, impact initiatives, and more.
  • Access to additional resources such as reports, research, webinars, and events throughout the year.

How to Apply:

  • Register to receive a submission form if you meet the application criteria.
  • Receive a detailed submission form link if your details match the criteria.
  • Submit your full application by the quarterly deadlines: 1 March, 1 June, 1 September, or 1 December.
  • Expect a response from ProVeg Grants within eight weeks of the deadline regarding your application status and the support offered.