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Business

Bitcoin sinks to lowest level since May, falling $3,000 in a month as China accelerates crackdown

The world’s most popular cryptocurrency sank to $6,558.14 on Monday, its lowest level since May, according to industry site CoinDesk. It lost $3,000 in value in just a month as China accelerated a crackdown on businesses involved in cryptocurrency operations, a reversal from President Xi Jinping’s previous signal to be more open to the blockchain technology. The coin last traded at $7,150.79.

Bitcoin jumped to above $10,000 briefly last month after Xi sang the praises of blockchain in a speech and called on his country to advance development in the field. However, on Friday, China’s central bank, the People’s Bank of China, pledged to continue to target exchanges and asked investors to be wary of digital currencies.

Beijing has taken a tough stance on cryptocurrencies, banning a fundraising exercise known as an initial coin offering and forcing local trading platforms to shut down in 2017.

“This was one of the worst weeks in the history of digital assets,” Jeff Dorman, chief investment officer of Arca, told CNBC. “The market is clearly in contraction, with no new money coming in to soak up the supply.”

Still, bitcoin has doubled in price since the beginning of the year, marking a significant turnaround from last year, when the digital coin tanked to as low as $3,122. It got a boost this summer after Facebook announced its own planned libra cryptocurrency, which analysts say has contributed to positive sentiment around bitcoin and boosted its price.

Bitcoin has a history of strong comebacks from big sell-offs, Dorman noted. The cryptocurrency gained 70% in the four months following a 16% loss in 2016 and similarly an 89% gain in the four months after a 22% sell-off in 2015, Dorman said.

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Business

General Motors strike looms over U.S. October job growth

The 40-day strike by members of the United Auto Workers union, which came as hiring was already slowing, could make it difficult to get a clear pulse on the labor market and clues on the health of consumers, the economy’s engine.

The Labor Department’s closely watched monthly employment report on Friday will follow data this week showing a further slowdown in economic growth in the third quarter as a trade tensions-induced slump in business investment deepened.

The Federal Reserve cut interests rates on Wednesday for the third time this year, but signaled a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.

“There is going to be more noise than signal in this employment report because of the GM strike,” said Ryan Sweet, senior economist at Moody’s Analytics in Westchester, Pennsylvania.

According to a Reuters survey of economists, non-farm payrolls probably increased by only 89,000 jobs in October, with manufacturing shedding at least 50,000 positions, which would be the most since 2009. Employment rose by 136,000 jobs in September.

Government data last Friday showed 46,000 GM employees were idle at the automaker’s plants in Michigan and Kentucky during the period establishments were surveyed for October payrolls.

Striking workers who do not receive a paycheck during the payrolls survey period are treated as unemployed. The strike, which ended last Friday, had an impact on suppliers in the auto industry. That led economists to believe the work stoppage cut between 75,000 and 80,000 jobs from October payrolls.

Even without the strike distortions, job growth has been slowing this year, averaging 161,000 per month compared with an average monthly gain of 223,000 in 2018. The nearly 16-month trade war between the United States and China, which has undermined business investment, has been blamed for the slow job growth.

“We don’t want to ignore the impact the trade fight is having on business job decisions,” said Beth Ann Bovino, chief U.S. economist at S&P Global Ratings in New York.

The Institute for Supply Management’s (ISM) employment measure for the manufacturing industry has contracted, likely suggesting manufacturers could be planning workforce reductions. ISM’s services sector employment gauge has also declined.

The GM strike is also seen limiting the rebound in wage gains in October. Average hourly earnings are forecast up 0.3% after being unchanged in September. That would lift the annual increase in wages to 3.0% in October from 2.9% in September. Wage growth peaked at 3.4% in February.

There are fears the business investment malaise could spill over to the labor market, which is underpinning consumer spending. Fed Chair Jerome Powell said he did not see this risk as the labor market remains solid., but not everyone is convinced.

“As it is, some contagion is already evident,” said Bob Schwartz, a senior economist at Oxford Economics in New York. “Small businesses are reporting cutbacks in hiring and investment plans. If this downbeat note reverberates in a meaningful way to households, spurring an upsurge in job insecurity, the last pillar to fall in a recession – consumer spending – would be at risk of crumbling.”

Solid consumer spending blunted some of the drag on the economy from weak business investment to limit the slowdown in growth to a 1.9% annualized rate in the third quarter. The economy grew at a 2.0% pace in the April-June quarter.

Though the household survey from which the unemployment rate is derived likely treated the striking workers as employed, the jobless rate is expected to have increased by one-tenth of a percent point to 3.6% in October. The household survey, which is volatile because of a small sample, showed 1.57 million jobs created in the last five months, far outpacing the payrolls gain reported in the bigger establishment survey.

“This discrepancy creates some risk of a sudden reversal in household employment that could lead to a sudden uptick in the unemployment rate, which would be particularly unsettling at a time when markets are focused on recession triggers or risks,” said Michelle Girard, chief economist at NatWest Markets in Stamford, Connecticut.

October’s anticipated strike-driven plunge in manufacturing will follow a drop of 2,000 jobs in September, which was the first fall in factory payrolls in six months. Manufacturing is struggling under the weight of trade tariffs, which the White House has argued are intended to boost the sector.

Construction employment is expected to have risen in October, though hiring has slowed from a peak of 56,000 jobs in January. Further gains are expected in government employment, in part because of hiring for the 2020 Census.

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World

Australian state Labor government spearheads anti-protest laws

 

Australian state Labor government spearheads anti-protest laws

By
Mike Head

30 October 2019

Despite protests and the exposure of its lies about “dangerous” demonstrations, Queensland’s state Labor government rushed new anti-protest laws through parliament last week. Demonstrators using proscribed “devices” can be jailed for up to two years and police have expanded powers to conduct personal and vehicle searches without judicial warrants.

By accelerating the legislation, the Labor Party has taken the lead in a wider drive by Labor and Liberal-National Coalition governments across the country to outlaw many forms of political protest amid growing discontent in Australia and worldwide, particularly over worsening social inequality and ecological dangers.

Backed by the Liberal National Party (LNP) opposition, the state parliament passed the Summary Offences and Other Legislation Amendment Bill 2019 last Thursday. Just two days earlier, more than 200 people rallied outside the Queensland parliament to denounce the legislation. The demonstrators included environmental activists, civil liberties representatives and construction workers.

A token parliamentary committee inquiry into the bill also had received more than 200 submissions, most voicing opposition to the attack on the democratic right to protest and the underlying right to political free speech.

The bill will see demonstrators jailed for allegedly trying to use “lock-on” devices to prevent police from dragging them away from protests. It also gives the police powers of search and seizure if they “reasonably suspect” that a person has “something that may be a dangerous attachment device” that could be used “to disrupt a relevant lawful activity.”

Introducing the bill in parliament, Premier Annastacia Palaszczuk repeated the false claims that she and her ministers had made throughout the media for weeks to justify the measures. She insisted that the bill did not infringe on the right to protest but only targeted the use of “dangerous attachment devices” that “are reinforced with metal, wire or glass—fragments that can become projectiles—they can injure police, emergency services workers or members of our community.”

Palaszczuk and other Labor leaders had accused Extinction Rebellion and other environmental demonstrators of using deadly booby traps designed to maim or kill police and emergency services personnel. But they produced no evidence to substantiate their allegations, which protest groups strongly denied.

This exposure of the government’s lies did not halt the Labor Party’s determination to be in the forefront of imposing a wave of anti-protest laws. Last month, Prime Minister Scott Morrison’s federal Coalition government, backed by Labor, pushed through parliament a bill that could see people jailed for up to five years for using social media, emails or phone calls to promote, or even advertise, protests against agribusinesses. Morrison’s government is also working with state governments to impose harsher jail terms on demonstrators, adding to expanded anti-protest laws imposed over the past three years.

In Queensland, protesters obstructing traffic or resisting arrest already faced court-imposed fines up to $61,000. The Labor government has also introduced a bill setting penalties of up to one year in jail for people found guilty of trespassing on agricultural premises to protest against animal cruelty. In April, Palaszczuk’s government authorised police and biosecurity officers to issue on-the-spot fines of $652 to such demonstrators, on top of existing trespass penalties.

During last Thursday’s parliamentary session, Agriculture Minister Mark Furner boasted of Labor’s record. “Earlier this year, in my portfolio, we as a government amended the regulations under the Biosecurity Act to allow Queensland Police Service and biosecurity officers to immediately fine people who put on-farm biosecurity at risk. We acted, and acted quickly, and broadly industry was supportive of the quick response.”

Furner’s remarks underscore Labor’s anxiety to satisfy the demands of agribusiness and other sections of big business for the suppression of any political dissent that threatens corporate profits.

Clearly, the targets of these measures go beyond the recent Extinction Rebellion protests, which temporarily blocked traffic in the Queensland capital of Brisbane, as they did in other cities around the world. During last Thursday’s short parliamentary debate, references were made to the mass protests sweeping the globe against social inequality and attacks on working class conditions.

Education Minister Grace Grace admitted that the importance of protests had been “brought to the forefront of people’s mind” by “many around the world at the moment.” She said people “may or may not agree with the protests that are happening in Hong Kong, London, Santiago and Paris over various domestic and international issues.”

In their speeches, Labor ministers hypocritically professed to defend the right to protest, provided it was “lawful.” So did the leaders of the LNP, who supported the legislation, even as they criticised the government for not going further to outlaw “unlawful assembly” and set mandatory jail terms for people arrested more than once during protests.

The Queensland legislation has provoked outrage, including among those who still had illusions that Labor was a “lesser evil.” Palaszczuk insisted that her government was not reprising the notorious blanket anti-demonstration laws of the Bjelke-Petersen National Party state government of the 1980s. She even bragged of having joined the widespread protests against those laws.

Palaszczuk’s comments only point to the fact that Labor’s anti-democratic trajectory is part of a global shift. Governments around the world are increasingly turning to repressive and authoritarian methods of rule in the face of the resurgence of mass protests, from France to Puerto Rico, Haiti, Chile, Lebanon, Iraq, Ecuador, Indonesia and Hong Kong.

Labor’s Summary Offences and Other Legislation Amendment Bill contains measures that can be used well beyond environmental or animal cruelty protests. The “dangerous devices” banned include “sleeping dragons”—concrete-filled pipes that lock protesters’ arms together—and “dragon’s dens”—steel drums filled with concrete. These devices make it difficult for police to remove protesters. Also specifically outlawed are “monopoles” and “tripods,” used to delay coal trains.

However, the provisions are vague enough to cover any equipment that “reasonably appears” to be designed to prevent a demonstrator from being removed and arrested. Likewise, the “relevant lawful activity” that must not be disrupted is defined in sweeping terms. This includes “transport infrastructure,” “entering or leaving a place of business” and “the ordinary operation of plant or equipment.”

In other words, these laws criminalise protests that allegedly disrupt business operations. They can be used more broadly to suppress opposition, including industrial action by workers, to the deepening assault by governments and the corporate elite on jobs, living standards and social conditions.

The laws attack fundamental democratic rights, including free speech, free movement and freedom to associate. They have nothing to do with protecting the public from “unsafe” protests. Rather they are intended to intimidate and quash the growing anger produced by the deteriorating social and environmental conditions.

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[24 August 2019]

Australian governments trial police-state measures against climate protesters
[ 15 October 2019 ]

 


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World

Detroit Democrat John Conyers, long-standing fixture in Congress, dies at 90

 

Detroit Democrat John Conyers, long-standing fixture in Congress, dies at 90

By
Patrick Martin

30 October 2019

Longtime Democratic Congressman John Conyers Jr. died October 27 at his home in Detroit at the age of 90. With 53 years in the House of Representatives, Conyers was one of the most durable and consistent opponents of revolutionary politics in the working class.

It is this record that accounts for the plaudits that followed his death, not only from fellow Democrats, but also from General Motors CEO Mary Barra, the corporate media, the trade union bureaucracy and the pseudo-left. While somewhat toned down due to the abrupt end of Conyers’ political career—he was the first prominent Democrat to be purged, in December 2017, as part of the #MeToo witch hunt—the praise was a reward for services rendered to American capitalism.

Conyers’ entire political career was devoted to preventing the working class from breaking with the Democratic Party and fighting the capitalist system, in a city and state that have been a longtime center of working class militancy. For several decades, one of his major concerns was fighting the influence of the Workers League, forerunner of the Socialist Equality Party, and its newspaper the Bulletinat factories and in working class neighborhoods throughout his district, which comprised the western half of the city of Detroit.

In a file photo from Friday, May 30, 2014, Rep. John Conyers, D-Mich., walks down the steps of the House of Representatives after final votes, at the Capitol in Washington. Conyers, the longest-serving African-American member of Congress and founder of the Congressional Black Caucus, died Sunday at age 90 at his Detroit home, two years after leaving the U.S. House. (AP Photo/J. Scott Applewhite, file)

This district included what were then huge General Motors factories on the southwest side of the city (the Cadillac and Fleetwood plants), as well as neighboring GM parts plants and the giant Ford Rouge complex, which sat on the western edge of his district and employed tens of thousands of black workers who lived in Detroit.

The congressman’s political career was rooted in the auto plants. His father, John Conyers Sr., served as chief UAW steward at the Chrysler Jefferson Avenue plant on the city’s east side, then as a top organizer at Ford Rouge in the 1940-1941 drive that resulted in unionization. The elder Conyers retired as an international UAW representative while the UAW was still a powerful trade union, which, despite its pro-capitalist leadership, still retained militant traditions. He died in 1986, just as the UAW was completing its transformation into the corporatist monstrosity it is today.

John Conyers Jr. began his political career, after military service during the Korean War and Wayne State University law school, working as a top aide to Democratic Representative John Dingell, Jr. He then went into private practice and allied himself with civil rights leaders like Martin Luther King Jr., working in the Mississippi voting rights campaign and participating in the 1963 March on Washington. In 1964, when the First Congressional District seat fell vacant, Conyers won the Democratic primary by a narrow 108 votes, aided by King’s endorsement.

In Congress, he co-sponsored the Voting Rights Act, opposed the expulsion of Adam Clayton Powell, the congressman from Harlem, and began to speak out against the Vietnam War. He was prominent enough a critic to gain a place on President Nixon’s “enemies list.”

In 1967, as Detroit erupted in a massive urban rebellion that was centered in his congressional district—12th Street, the flashpoint, was then the main commercial strip on the near west side of Detroit—Conyers sought unsuccessfully to defuse the upheaval. He went out, along with other Democratic politicians and black preachers, armed with bullhorns, but their appeals were ignored. National Guard units and then Army troops, fresh from the Vietnam killing fields, were rushed to Detroit to suppress the rebellion at the cost of 43 dead.

With financial backing from Ford Motor Company, John Conyers Sr. and his sons Nathan and John Jr. established Conyers Ford in 1970 just east of downtown Detroit, making the Conyers family certified members of the black bourgeoisie. Nathan Conyers closed the Ford dealership in 2003, but by then had moved upscale, opening Jaguar of Novi, which he finally sold in 2007 on his retirement from the auto business.

Like his father and much of the black Detroit political establishment, Conyers received his political education in one of the worst of schools, American Stalinism. He was a longtime fellow traveler of the Communist Party USA, appearing at conferences of the National Alliance Against Racism and Political Repression, one of innumerable front groups set up by the CPUSA. He also promoted the All Peoples Congress, another popular front formation backed by the Stalinists, other “left” radicals and a section of the trade union bureaucracy, to pressure the Democratic Party. He was a longtime member of the Democratic Socialists of America.

The political function of such activities was to give the Democratic Party a left cover and provide a rationale for working people to continue voting for the Democrats in the 1980s, 1990s and into the new century, even as the Democratic Party moved further and further to the right, abandoning any association with the promotion of social and economic reforms that would raise living standards and expand public services.

Conyers became associated with entirely symbolic political efforts that did nothing to actually improve the conditions of life for the people of his district or for working people as a whole: a 15-year campaign to establish a national holiday honoring Dr. King; sit-in protests at South African embassies and trade missions to protest apartheid and demand the freedom of Nelson Mandela; and legislation on reparations for slavery, which he introduced every year from 1989 on.

In the meantime, Conyers vehemently opposed and sought to block every actual struggle of the working class against the capitalist system, particularly when these struggles came into conflict with the trade union bureaucracy, the black political establishment in Detroit and the Democratic Party.

It would be possible without much difficulty to write Conyers’ political history in the decades after 1967 entirely by quoting from the pages of the Bulletin, a forerunner of the World Socialist Web Site. The Bulletin first mentions him in its first analysis of the Detroit riot, pointing out that in the wake of the great rebellion, which we called “an important and heroic chapter in the struggles of the American working class… Black Democrats, even so-called militants like Conyers in Detroit, were quick to demonstrate their loyalty to capitalism.”

In May 1971, we criticized him by name in an editorial for not protesting witch hunting of the antiwar movement by the House Internal Security Committee, then under the chairmanship of right-wing Democrat Richard Ichord. In 1974, we reported his alignment with Angela Davis and other Stalinists in a “reactionary alliance of all those forces who want to hold back the working class from an independent revolutionary struggle against the government.” In October 1976, we noted his failure to attend a rally to defend the Washington Post pressmen, framed up and victimized by the owners of the most powerful media voice in the US capital, one aligned then and now with the Democratic Party.

After the Workers League moved its headquarters to Detroit in 1978 and began publishing the Bulletin there, Conyers became a more frequent target of political exposure. In November 1979, as auto workers fought against Chrysler’s closure of its Dodge Main plant, we noted how Conyers introduced federal legislation to block the plant closure that had zero chance of passage but gave the UAW leadership a means of diverting the struggle away from the mobilization of the working class and into impotent appeals to big business politicians in Washington.

When a wave of union-busting targeted smaller union locals and auto parts plants in the Detroit area in 1982, we reported that these efforts had the tacit consent of the UAW and AFL-CIO, and that “Congressmen John Conyers, George Crockett and John Dingell have said nothing about the union-busting in their own districts.”

The Workers League/SEP ran candidates against Conyers on three occasions: Eddie Benjamin in 1982, D’Artagnan Collier in 1992 and Helen Halyard in 1996. In the first campaign, we described Conyers as a representative of the black petty-bourgeoisie and characterized his political role as follows:

Within the Democratic Party, Conyers has played a special role, making the most radical-sounding demagogic speeches in order to put a “left” face on this reactionary capitalist political party. This has won Conyers the undying support of the Stalinist Communist Party, which is devoting all its efforts to prop up the Democratic Party and keep the working class trapped within the framework of capitalist politics.

Conyers on occasion refers to himself as a socialist, but his real class role was most clearly revealed during the recent Detroit Federation of Teachers strike. Conyers and his top aide Walter Colter were at the heart of the coalition of union bureaucrats and Democratic politicians that called itself the Citizens’ Committee and devised the binding arbitration scheme that was imposed on the teachers.

Conyers was well aware of our political criticism and of all the party’s activities in Detroit. He made numerous attempts to win our support, even endorsing an investigation into the murder of Workers League leader Tom Henehan, one of only a handful of bourgeois political figures to do so, and the only sitting US congressman. He seemed puzzled that he could not establish the same opportunist relations that he did with pro-Stalinist groups like the Workers World Party.

This was a period when large sections of workers still looked to the unions to fight back against corporate America and they were receptive to the demand, with which the Workers League was most prominently identified, for the building of a Labor Party based on the unions to fight for a socialist program.

Conyers was acutely aware of these popular sentiments and did his best to head them off. In October 1985, when congressional Democrats joined with the Republican Reagan administration to impose new cuts on social programs, several members of the Congressional Black Caucus held a press conference to denounce the agreement. Conyers declared that he and others were “beginning to reassess their relationship with the Democratic Party.”

Nothing ever came of this, or of the legislation introduced by Conyers to cut the requirements for third parties to gain ballot status, which are set at onerous levels in many major states, including Michigan. But he was clearly aware of the potential for challenges to the Democratic Party from the left.

On November 18, 1986, the Bulletin published a comment on the impending closure of the Fleetwood and Cadillac assembly plants headlined, “Conyers, Marcyites Stage Jobs Stunt.” While the Workers League was organizing workers to demonstrate at the plant, demanding the UAW fight the closures, Conyers and the Workers World Party held a protest at the General Motors building appealing to corporate management to “Remember Detroit.” We wrote:

Due to the right-wing policies of the UAW bureaucracy, who have assisted General Motors in its cost-cutting policies, capitalist politicians like Conyers and Jesse Jackson have been able to pose as more “left.” But this section of the Democratic Party, centered around the Black Congressional Caucus, is just as loyal in its defense of the capitalist profit system as the rightwing Democrats and Republicans.

Conyers specifically opposed any challenge to the private ownership of the auto companies and the nationalization of industry under workers’ control without compensation to the billionaire auto bosses. He told the Bulletin that he had never been an “advocate” of nationalization and that his program to defend jobs was to fight for Congress to pass laws against plant shutdowns. He then echoed the UAW bureaucracy and his fellow Democrats by calling for trade warfare against Japanese automakers.

News clipping from the Bulletin

There is little to say about the final three decades of Conyers’ congressional career. In September 1988, he participated in a unanimous vote of the House to break a strike by workers at the Chicago & Northwestern Railroad. In 1991, in the wake of the first Bush administration’s bloodbath in the Persian Gulf War, with tens of thousands of Iraqi troops incinerated by US tanks and warplanes, he declared at a congressional hearing, “We have liberated Kuwait but are in danger of losing New York, Philadelphia, Detroit and other cities.”

In 1992, after facing the Workers League candidate at an initial campaign debate, Conyers stopped going to such open events, sending representatives instead. At one of these forums, his aide “denied that the profit system had failed and said that blacks and other minorities should have a bigger piece of the pie, rather than doing away with the system.”

As the corporate controlled two-party system moved further and further to the right, “left” demagogues like Conyers found their roles less and less in demand. After the Republicans won control of Congress in 1994, he lost his chairmanship of the Government Operations Committee and could no longer convene the hearings for which he had won a national reputation as an opponent of police violence—everywhere except in Detroit, where he was a firm ally of the Coleman Young administration and the brutal Detroit Police Department.

Conyers briefly played a more prominent role in Washington after the Democrats won control of Congress in 2006. He chaired the Judiciary Committee, where he obeyed instructions from Speaker Nancy Pelosi to block efforts to impeach President George W. Bush for the Iraq War and the campaign of lies used to justify it. From 2010 on, the Democrats were again in the minority, and Conyers, now in his 80s, was scarcely heard from.

Then came the degrading spectacle of #MeToo. Following the massively publicized accusations against leading Hollywood figures like producer Harvey Weinstein, Conyers was one of the first Washington politicians to be targeted and the first to be forced out. It was revealed that a former staffer had been paid $27,000 in 2015 to settle a complaint involving unwanted sexual advances. Within days, his Democratic colleagues, including leaders of the Congressional Black Caucus, threw him to the wolves.

Nothing in our long record of intransigent opposition to Conyers’ politics stopped the World Socialist Web Site from denouncing the methods used to bring about his demise. We described him as “the most prominent congressional victim of the accelerating media hysteria over charges of sexual misconduct… The longtime Detroit Democratic congressman saw his 53-year political career terminated in only 16 days…”

Republican Governor Rick Snyder refused to call a special election to fill the vacancy left by Conyers’ resignation, leaving the seat empty for nearly a year. Former state representative Rashida Tlaib won a narrow victory in the Democratic primary and now holds the seat. She declared, after Conyers’ death, that he was “our congressman forever.”

Detroit political consultant Sam Riddle was quoted in press obituaries claiming, “The streets of impoverished Detroit mourn John Conyers.” Actually, by the time of his death, and likely many years before, impoverished Detroiters had little use for John Conyers. He was one more political representative of corporate America, more “radical” in his rhetoric than most, but a diehard defender of the capitalist system that is the root cause of poverty, social inequality, racial discrimination and war.

 

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[6 December 2017]

 


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World

GM execs gloat over new UAW contract in call with Wall Street investors

GM execs gloat over new UAW contract in call with Wall Street investors

The WSWS Autoworker Newsletter urges call workers to attend the call-in meeting Thursday, 7pm Eastern Time to discuss the lessons of the GM strike. To register, go to: wsws.org/autocall

In a conference call with Wall Street analysts Tuesday morning, General Motors CEO Mary Barra and the company’s chief financial officer boasted that the new four-year agreement with the United Auto Workers would allow GM to slash billions in manufacturing costs and give it the “flexibility” to replace higher-paid veteran workers with temps.

Although the walkout cost the company an estimated $3 billion in profits for 2019 and 2020, the savings from the contract will lead to far larger long-term gains, Barra and CFO Dhivya Suryadevara told the analysts. The new agreement, Barra said, would maintain the “competitiveness” of GM, “strengthen the future of this company and create shareholder value.”

Despite the 40-day strike, the longest national auto strike in half a century, GM made $3 billion in third-quarter profits in North America. This is up $200 million from last year, with an 8.4 percent profit margin. GM International reported a $65 million loss on slowing sales in China and elsewhere.

Mary Barra (Source: GM Media)

The large North American profits were largely due to sales of the highly profitable Silverado and Sierra pickup trucks, which the UAW helped the company stockpile by sanctioning forced overtime and speedup before the strike.

GM’s stock rose 4.3 percent on Tuesday. Since the UAW announced the contract was ratified last Friday, GM shares have risen by eight percent.

Barra, who made $22 million last year, said workers and management would go forward as “one team” after the strike. In fact, GM has responded to the UAW’s shutdown of the strike with a campaign of retaliation aimed at intimidating workers who widely opposed the UAW-backed sellout.

The UAW claimed the contract passed by a narrow 57-43 percent margin, but there are widespread charges that the vote was rigged. In any case, workers knew that if they rejected the deal, the UAW would leave them on the picket lines for weeks or months and would not bring back anything better.

Over the weekend and on Monday, at least three Flint Truck Assembly workers, including 19-year veteran Juan Gonzales, were fired due to comments posted on workers’ Facebook pages, which GM Global Security regularly spies on. In addition to this flagrant violation of free speech, the company has also refused to rehire nine GM workers at the Silao, Mexico plant who were fired for defying demands by the company and the union that they increase output and undermine the impact of the US strike.

Inside the plants and distribution warehouses, workers are reporting a virtual reign of terror, with management harassing and disciplining workers. The UAW is enforcing speed up and mandatory overtime to make up for the loss of 300,000 vehicles during the strike.

With the plants already running at “max overtime,” Barra told investors, it would take “discipline” to boost production and get profits rolling again by the second quarter of 2020.

In her comments, CFO Dhivya Suryadevara said, “The new labor agreement preserves our competitiveness, manufacturing flexibility and balance sheet strength, without sacrificing our earnings power.

Gloating over the terms of the contract, she added, “We have maintained our ability to adjust our workforce in response to changing industry levels, protected the balance sheet with no increases to defined benefit pension obligations and no payments or increased obligations to retirees. We maintained our breakeven point of 10-11 million units in the US and therefore maintained our ability to navigate through a downturn. It is important to note that while this labor agreement is inflationary, we expect to offset incremental economics over the course of the contract period with productivity in our system.”

The UAW agreed to the closure of the Lordstown, Ohio plant, which once employed nearly 5,000 workers, along with transmission plants in Michigan and Maryland and a parts distribution center in Fontana, California. The plant closures would allow the company to move ahead with plans to cut $4.5 billion in annual labor costs, the GM’s executives said.

The unrestricted expansion of temps, which will be overseen by the UAW, will provide GM with a disposable workforce that can be expanded or reduced depending on market conditions without incurring the costs of laying off traditional workers, like supplemental unemployment pay or buyouts.

When a Bank of America/Merrill Lynch analyst complained that the deal only rid the company of 2,000 higher-paid “legacy” workers, Barra reassured him that the Special Attrition Program backed by the UAW would likely lead to more workers leaving over the course of the contract.

The stated aim of the auto bosses and the UAW is to drive out older, more experienced workers, referred to as “surplus,” and convert the entire workforce into lower-paid full-time workers, temps and third-party contract workers.

Asked by the analyst if GM planned to replace one-for-one the 2,000 workers being pushed out in the UAW contract, Barra said the company planned to “optimize the workforce” by getting more productivity out of the existing workers.

At the same time, she said, under the new contract, “As we need to hire additional workers we will utilize those temps, and I am very proud that we provided an appropriate path to permanent employment to our temporary workforce, and maintained the in-progression flow, so we will utilize both of those depending on the situation.”

Barra told investors that the company would invest more in electric vehicle technology over the next four years than traditional vehicles. As part of the new contract, the company and the UAW will establish a new joint body to oversee new technologies. Barra said 1,000 new jobs would be created at a battery manufacturing plant near the shuttered Lordstown facility. The workers hired at the joint venture are expected to top out at $17 an hour under a separate UAW contract.

During the course of the strike, Wall Street investors made it clear they were willing to ride out a long walkout as long as GM defeated the strikers and achieved its aim of establishing “21st Century labor relations,” i.e., bringing to the auto industry the type of exploitation and precarious employment prevalent at Amazon, Uber and other “gig economy” companies.

GM has achieved this with the collusion of the UAW, which deliberately isolated striking GM workers by keeping Ford and Fiat Chrysler workers on the job, while working to starve workers into submission with $250-275 a week in strike pay.

The UAW is now targeting 56,000 Ford workers for its next pro-company contract. Wall Street has been punishing Ford stocks for not moving fast enough on its multi-billion cost-cutting program. The company has already indicated that it will not accept the pattern set by the UAW-GM contract but wants far deeper concessions, particularly on health care.

Ford workers are livid over the GM deal and determined to fight. A Louisville, Kentucky worker with two decades at Ford, told the WSWS Autoworker Newsletter, “There are 800 temps at Kentucky Truck, and it keeps going up because Ford is not hiring permanent employees.

“Many have been here two-and-a-half years. Can you imagine working that long, and you can’t miss a day without being fired? They pay union dues, and it’s not right! The company doesn’t care if they get hurt. The medical department gives you Tylenol and sends you back to the line. If you’re a temp, you can get fired for getting hurt.

“Workers have given up much for Ford to succeed with the promise that once the company was profitable, we would get it back. We didn’t receive any of it back in the last contract. Ford didn’t take any money from the government, but it took it from their employees.

“I’ve been with Ford for over 20 years, and I make $10,000 less now per year than I did 10 years ago because they got rid of most of our overtime and our COLA. The union is not fighting for us. If this contract is not better than GM, people will pull out of the union,” he said.

Ford and Fiat Chrysler workers must draw the lessons of the GM strike and form rank-and-file factory committees to take the conduct of the struggle out of the hands of the corrupt UAW. These committees should reach out to and mobilize workers throughout the auto and auto parts industry to launch national and cross-border strikes to oppose the drive by Wall Street to return autoworkers to conditions of industrial slavery not seen in a century.

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World

Chicago Teachers Union preparing the betrayal of teachers’ strike

Classes remain canceled on Wednesday, the 10th day of the strike of about 25,000 teachers in Chicago, the third-largest school district in the US.

The central issues in the strike for teachers are significantly reducing class sizes and substantially increasing staffing at all levels to relieve overwork and overcrowding. Conditions in the schools have reached a crisis point, with classrooms of upwards of 45 children, crumbling and filthy buildings, and lack of basic resources.

The Chicago Teachers Union (CTU) House of Delegates met at CTU Headquarters Tuesday evening to hear an update on negotiations with Chicago Public Schools (CPS). The delegates meeting was called after CTU President Jesse Sharkey met with Mayor Lori Lightfoot for 45 minutes Tuesday afternoon. Despite conflicting press reports, no tentative agreement was announced at the meeting, though the CTU is clearly preparing to announce a sellout agreement as early as today.

Teachers marching on Tuesday

At an evening press conference, CTU Vice President Stacy Davis Gates said, “The things that were discussed at the table are not concretely on paper.” Sharkey added, “If we can achieve a tentative agreement [Wednesday] morning, we would bring our delegates in in the afternoon.”

CPS released a one-page summary of a five-year tentative agreement on Tuesday night that fails to commit to even the most basic demands of teachers. The city offers paltry staffing increases of 250 nurses and 209 social workers over five years. No class size limits are indicated. Instead, the lowering of class sizes is to be “phased in,” in partnership with the CTU.

These are promises teachers have heard before. CPS is also offering a 16 percent pay increase over five years, which has been repeatedly used by CPS and the corporate media to try to portray the teachers as “greedy” and discredit their fight for the most basic resources in schools.

The Democratic leadership in Chicago is staking out an aggressive position, imposing austerity that has been its policy for decades. While insisting there is no more than $500 million for schools before and during the teachers strike, Lightfoot’s 2020 budget proposal increases spending for police by 7 percent, or $100 million.

Lightfoot and CPS are giving the CTU nothing that they can try to sell to teachers to force through an agreement. This is why the CTU has not moved to shut down the strike quickly, as it pledged to do before it began.

The Democratic administration is applying financial pressure to teachers to try to force an end to the strike. On November 1, teachers may lose their health insurance for the duration of the strike and be shifted onto the federal COBRA insurance, known for its high cost.

For its part, the CTU is not paying teachers any strike pay, contributing to the financial pressure on educators to end the strike.

According to the CTU, the negotiations have come down to three issues: additional elementary school teacher preparation time, and two items of legislation, one for an elected school board and another for expanding the number of issues that the union can bargain over.

Even if these demands were met, they would do nothing to resolve the basic issues teachers are striking over.

Over the weekend, the CTU declared that it was only $38 million away from striking a deal with CPS. The school board claims that the CTU’s demands are closer to $100 million. Both figures are grossly inadequate to fund the city’s public schools, amounting to less than one-half of a percent of the school district’s $7.7 billion operating budget.

As vice president of the CTU during the 2012 Chicago teachers strike, Sharkey was instrumental in negotiating the concessions deal with then Mayor Rahm Emanuel that eroded tenure and enforced standardized testing for teacher evaluations. The shutdown of the strike paved the way for the closure of 49 public schools, thousands of teacher layoffs and the expansion of several networks of privately run charter schools.

The CTU has engaged in political theatre throughout the strike, posturing as an opponent of Lightfoot’s proposals while simultaneously working out a deal with the mayor.

Teachers and school staff face the threat of a repeat of the 2012 betrayal, in which they will be forced to swallow a concessions contract branded as a “victory” without adequate time to read and discuss it before voting.

A section of the striking teachers

To defend public education, teachers must expand the strike and break through the isolation imposed by CTU, which is aimed at pressuring teachers to accept the concessions demanded by CPS.

Teachers are determined to fight back against any concessions that the city attempts to impose with the aid of the CTU.

One teacher outside of the House of Delegates meeting told the World Socialist Web Site Teachers Newsletter: “I am willing to fight for as long as it takes. I definitely think this strike needs to be expanded. The whole city should be on strike.”

Addressing the CTU’s betrayal of the 2012 teachers’ strike, the teacher continued: “It did nothing. Today we’re fighting for the same things we were fighting for then.”

Several thousand teachers, students and supporters marched in the city early Tuesday morning, targeting the city’s planned Lincoln Yards development, a former industrial corridor that the city has committed public funds to transform into a luxury business district. Nine teachers were arrested occupying a lobby of a company receiving public funds for private development. They were later released.

The WSWS calls on teachers and school staff to vote “no” to any concessions contract imposed by the CTU and to take the initiative for their struggle into their own hands by forming rank-and-file committees to discuss and democratically decide on their own demands.

These committees must link up with hotel workers, logistics workers, autoworkers, and others across the city to prepare for a general strike and expand the fight to defend the right of public education to the working class worldwide in a global offense against the capitalist system.

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World

Iraqi regime responds to mass protests with brutal crackdown

 

Iraqi regime responds to mass protests with brutal crackdown

By
Jean Shaoul

30 October 2019

The Iraqi police and security services have killed at least 250 people and injured thousands more in a brutal crackdown against the mass protests that first erupted earlier this month. In Karbala, 18 people were killed and 122 injured on Monday night. Three people died in Nasiriya as a result of injuries sustained earlier in the month.

The strikes and protests against Prime Minister Adel Abdul Mahdi’s government, which are uniting workers across religious affiliation despite the confusion deliberately stoked by Iraq’s divisive political system, are the largest in decades. Centered in the country’s majority Shia population, the ostensible base of the ruling parties that make up Mahdi’s fragile coalition, the protests have shaken the regime to its core.

They reflect the enormous anger over endemic poverty, rampant unemployment, the lack of the most basic services and the systemic corruption that has pervaded Iraq since the 2003 US-led invasion and occupation and the bitter sectarian conflicts instigated by Washington as part of its divide-and-rule strategy, which have devastated the country.

Anti-government protesters control the barriers while Iraqi security forces fire tear gas and close the bridge leading to the Green Zone, during a demonstration in Baghdad, Iraq, Tuesday, Oct. 29, 2019. (AP Photo/Hadi Mizban)

The demonstrations in Iraq are part of a global upsurge of social struggles that have seen mass demonstrations in Chile, Ecuador, Egypt, Ethiopia, Lebanon and other countries.

Abdul Mahdi has made no attempt to meet the protesters’ demands for jobs, better living conditions and an end to corruption. He has dismissed their grievances with contempt, saying there is no “magic solution.”

Yet Iraq is OPEC’s second-biggest oil producer. It has the fifth-largest crude oil reserves in the world and last year took in more than $100 billion in oil revenues. But far from benefiting the Iraqi people, the cash went straight into the hands of international oil companies and their bribed hirelings in Iraq’s political and business circles. According to Transparency International, Iraq is the world’s 12th most corrupt state.

Mahdi imposed a dusk-to-dawn curfew and closed down the internet and social media in a bid to stop the protests from spreading. In addition, he ordered the deployment of heavily armed soldiers, members of Iraq’s elite counterterrorism squads and riot police to stop demonstrators from marching on Tahrir Square in downtown Baghdad and on the Green Zone, the heavily fortified center of the Iraqi government and location of the US and other Western embassies, as well as the numerous military contractors that prop up the regime.

Snipers were positioned on rooftops to pick off protesters and masked death squads were deployed to go to the homes of known activists and assassinate them. Thousands are believed to have been injured as a result of the security forces’ use of live ammunition, rubber bullets, tear gas and water cannon.

According to an Iraqi government committee that investigated the crackdown during the first week of October, 149 civilians were killed as a result of the security forces’ use of excessive force and live fire, with more than 100 deaths caused by shots to the head or chest. While it held senior commanders responsible, it stopped short of blaming the prime minister and other top government officials, claiming there had been no order to shoot.

But the government’s brutality served only to fuel the popular anger. In the impoverished Shia neighborhoods of Sadr City, part of the Baghdad conurbation where more than a decade ago militias confronted American troops, crowds set fire to both government buildings and the offices of the Shia-based parties that support the government.

The initial wave of protests stopped for two weeks for the Shia religious festival of Arbaeen before resuming last Friday, when demonstrators in various parts of the country demanded the government’s resignation. “We’re here to bring down the whole government, to weed them all out,” protesters shouted. They added, “We don’t want a single one of them. Not [Parliamentary Speaker Mohammed] Halbousi, not [Prime Minister Adel] Abdul Mahdi. We want to bring down the regime.”

The protests spread to the Shia-populated southern provinces, with some of the young people voicing their opposition to Grand Ayatollah Ali al-Sistani, Iraq’s leading Shia cleric, who urged protesters and security forces to show “restraint” and warned that there would be “chaos” if violence resumed.

As well as marching on Baghdad’s Green Zone, demonstrators targeted the headquarters of various militias across southern Iraq, including that of the Badr militia in Amarra and the Asa’ib Ahl al-Haq in Diwaniyah. The headquarters of the Sayyidd al-Shuhada in Nasiriya was also set on fire—a significant development given how strong the group is in that area. Demonstrators also attacked the political parties and the government buildings they control, burning the Dawa Party headquarters in Diwaniya and the al-Hikma Party headquarters in Samawa, as well as provincial governorate buildings in the southern provinces of Dhi Qar, Qadisiya and Wasit.

Once again, the government imposed a curfew, closed the internet, turned off the electricity in Tahrir Square, warned school and university students not to join the protests and gave the green light to the security forces to attack the demonstrators. According to Iraq’s High Commission for Human Rights, 63 demonstrators were killed on Friday and Saturday and more than 2,500 demonstrators and security forces were injured, largely by parastatal forces. The photos and videos of some of those killed and injured are horrific.

But the protests have continued this week. Students—some 40 percent of Iraqis were born after the 2003 US-led invasion of the country—defied the government and joined the thousands demonstrating against the government and calling for its resignation, despite the security forces’ use of tear gas against them. In Baghdad, soldiers were seen beating up high school students.

Activists in Baghdad occupied Tahrir Square throughout Monday night in defiance of the curfew. Reuters news agency reported one protester as saying, “No, we will stay. They have now declared a curfew and severe punishments for anyone not going to work, this is how they fight us. We will stay here until the last day, even if there are a thousand martyrs.”

On Monday, the first cracks in Mahdi’s fragile coalition appeared, as Muqtada al-Sadr, the cleric who backs parliament’s largest bloc and was instrumental in bringing Mahdi’s coalition to power, called for early elections.

These protests reflect Iraqis’ anger over the truly terrible conditions they have been forced to endure. Despite the $1 trillion in oil revenue generated since 2005, the level of poverty is appalling. According to World Bank figures, around seven million of Iraq’s 38 million people live below the poverty line, and youth unemployment is 25 percent, undoubtedly a huge underestimate.

According to the World Food Program, 53 percent of Iraqis are vulnerable to food insecurity, while a massive 66 percent of the two million internally displaced as a result of the civil war against ISIS are susceptible to food insecurity. Malnutrition is rife.

Life expectancy has fallen to 58.7 years for men and 62.9 years for women as a result of the destruction of Iraq’s health care system following years of economic sanctions in the 1990s and the occupation and civil war that followed the US-led invasion.

Most households no longer have access to a regular water supply, but face constant interruptions and have to resort to tanker trucks or open wells.

Housing conditions are truly shocking. The US war and its aftermath destroyed hundreds of thousands of homes and displaced millions of people. Many are living in breeze block shacks with corrugated iron roofs. Fifty one percent of Iraqi households are crowded, some with as many as 10 people living in one home.

The protests are part of a broader upsurge in the class struggle that is taking place all over the world and testifies to the primacy of class over ethnicity, nationality and religion. The Middle East and North Africa have witnessed strikes and demonstrations in Algeria, Sudan, Jordan and Egypt, and most recently, Lebanon.

Thirteen days of mass protests against the government’s corruption and economic measures that have impoverished the working class have brought Lebanon to a standstill. Many roads are blocked, and businesses, schools and universities are closed. The banks have remained shut throughout, fearing a currency devaluation and mass withdrawals. Riad Salameh, the director of the Central Bank of Lebanon, speaking on CNN television, said that without a political solution, the Lebanese economy was just days away from collapsing. Hours later, Prime Minister Saad Hariri handed in his resignation to President Michel Aoun.

These struggles expose once again the political bankruptcy of the national bourgeoisie, not only in Iraq but throughout the Arab world, which has proven to be organically incapable of resolving any of the democratic and social demands of the Arab masses or establishing any genuine independence from imperialism.

These demands can be won only by unleashing the enormous power of the international working class. This can be developed through the establishment of popular assemblies and workers’ committees in all the oil installations and workplaces throughout the country, aimed at mobilizing the independent strength of the working class in a struggle against the world capitalist system and for socialism.

 


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World

New York City transit workers and the fight for social equality

As 40,000 New York City bus and subway workers remain on the job after five-and-a-half months without a contract, there is increasing sentiment for a counter-offensive against the Metropolitan Transportation Authority’s demands to impose draconian concessions.

The brewing fightback, however, is not simply a struggle against a single transit agency. It is part of a broader battle by the whole working class against the capitalist system and both corporate-controlled parties. In order to pump more profits into the pockets of the financial aristocracy, the Democrats and Republicans are starving vital services of resources and seeking to reduce workers to the conditions of virtual slavery.

The Metropolitan Transportation Authority (MTA), on behalf of Democratic governor Andrew Cuomo and backed by Wall Street, is attempting to implement a far-reaching restructuring of the public transit sector. Its demands go beyond “normal” wage and benefit cutting. Instead, the MTA is demanding an expanded use of contractors, an introduction of part-time employment for subway and bus personnel, and the abolition of the eight-hour day. It also wants to reduce vacation time and impose penalties on workers who become ill.

Following the model of such “gig economy” companies as Uber and Amazon, government agencies want to make temporary, part-time labor with poverty wages and few benefits the norm in the public sector as well.

Transit officials announced a plan to cut between 1,900 and 2,700 jobs over the next three years, first through attrition then via layoffs. Already the agency has eliminated 79 subway cleaning jobs, with the go-ahead of the union, as they move to purge the system of higher-paid and more experience transit workers and replace them with low paid contractors and temps whom they can exploit without limit.

This attack is combined with service cuts, fare hikes and a new tax on drivers. The MTA recently axed 11 bus routes and is currently “reviewing the possibility” of scaling back or eliminating more subway and bus service. Fare hikes are now an annual occurrence, which will be supplemented in 2021 with a congestion pricing scheme, a regressive tax on drivers pushed through by governor Cuomo with support of Democratic mayor Bill de Blasio and Transport Workers Union (TWU) local 100.

Cuomo and the MTA have also engaged in a cynical public relations campaign to blame the fiscal crisis on workers supposedly abusing overtime and then on “fare-beaters.” Some 500 cops have been added to crack down on passengers avoiding fares, a move hailed by the TWU, and police have been assigned to spy on workers clocking in and out of work.

The cause of the MTA’s growing debt, now estimated at $44 billion and rising, is not transit workers or working-class passengers trying to eke by. It is the result of the looting of the city by the super-rich. The MTA is one of the largest issuers in the $3.8 trillion municipal-bond market and its bonds are found in the portfolios of the richest people looking for havens from municipal taxes. In addition to paying interest to these wealthy bondholders, the MTA also pays out millions in fees to banks like Barclays, Goldman Sachs, Bank of America/Morgan Stanley and Merrill Lynch.

Under capitalism everything goes to the rich. There are unlimited resources to bail out Wall Street, provide unlimited corporate tax cuts and wage endless wars. The ballooning stock market allows the ultra-wealthy to shuttle from luxury townhouse to penthouse suite, while workers fight for wages that barely cover rent and homeless take shelter in the subway system.

Transit workers are fighting alongside striking teachers in Chicago, GM and other autoworkers, and masses of workers and youth from Chile to Lebanon who are pouring into the streets in unprecedented numbers to oppose social inequality.

The main obstacle to the unification of the working class are the trade unions, like the Transport Workers Union, which are allied with the Democrats and defend without question the capitalist system and the economic and political dictatorship of the financial elite. The United Auto Workers union just betrayed the 40-day strike of GM workers, accepting the closure of plants and a vast expansion of temps. In Chicago, the teachers’ union is scrambling to end the two-week strike of 25,000 educators.

Today is the first major rally called by the TWU after nearly half a year without a contract. While the MTA has put forward its demands for blood, the TWU has refrained from articulating any demands for improved conditions for transit workers. The last thing the TWU wants is a strike. That is not just because it fears fines and losing automatic dues checkoff, but above all because it would win popular support and could become the catalyst of a direct confrontation with the union-aligned Democratic Party.

As former Local 100 president and current TWU national president John Samuelsen told a New York Times reporter, as he was caught leaving a lavish fundraising affair of businessmen for Cuomo, “the governor has been the best governor for the trade union movement ever.”

If transit workers are to take forward their struggle, they must take the initiative in their own hands through the formation of rank-and-file workplace committees, which are independent of the TWU and based on what transit workers and their families need not what the corporate-controlled politicians and union bureaucrats say is affordable.

These committees should demand a 40 percent wage hike to offset years of stagnating wages, the conversion of all second-tier, temp and contract workers into full-time workers with full pay and benefits, and the extension of industrial democracy, including workers’ control over safety and working conditions.

Transit workers must unite with every other section of the working class—logistics and retail workers, teachers, health care and service workers and college and high school youth—to build up a political counter-offensive of the working class against the capitalist system and for socialism.

A radical redistribution of society’s wealth to meet the needs of the majority will not be achieved through appeals to the conscience of the rich or through the capitalist Democratic Party, like Bernie Sanders and Alexandria Ocasio-Cortez claim. It will only be achieved through a frontal assault on the private fortunes of the super-rich and the expropriation of their ill-gotten gains. The debts owed to the banks and wealthy bondholders must be canceled as part of a program of transforming the giant banks and corporations into public enterprises collectively owned and democratically controlled by the working class.

Transit workers are not facing a limited trade union struggle but a political fight, which requires mobilizing the entire working class to fight for socialism. The Socialist Equality Party and World Socialist Web Site are fighting to build the revolutionary leadership for this struggle.


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Business

US retail sales unexpectedly decline in a sign that consumer economy could be cracking

U.S. retail sales fell for the first time in seven months in September, raising fears that a slowdown in the American manufacturing sector could be starting to bleed into the consumer side of the economy.

The Commerce Department said on Wednesday retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles. The decline was the first since February.

Data for August was revised up to show retail sales gaining 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast retail sales would climb 0.3% in September. Compared to September last year, retail sales increased by 4.1%.

“While this is by no means conclusive evidence that the consumer is wavering (after all, the upward revisions reduce the impact of September’s declines), it nonetheless reinforces our ongoing concern that a spending retrenchment will ultimately trigger a more durable slowdown,” wrote Ian Lyngen, head of rates research at BMO Capital Markets.

Auto sales fell 0.9% in September, the most in eight months, after accelerating 1.9% in August. Receipts at service stations fell 0.7%, likely reflecting cheaper gasoline.

Excluding automobiles, gasoline, building materials and food services, retail sales were little changed in September after climbing 0.3% in August. The so-called core figure corresponds more closely to the consumer spending component of U.S. economic activity.

Last month’s drop and August’s unedited gain in core sales hint at a marked slowdown in consumer spending in the third quarter than economists had been anticipating after a surge in the prior quarter. Consumption, which comprises about 66% of the U.S. GDP activity, increased at a 4.6% annualized rate in the second quarter, the most in 1-1/2 years.

The strength of the U.S. consumer has also served as leverage for President Donald Trump, who’s touted the health of the American economy in the White House’s protracted trade war with China. Though Trump announced a temporary truce in the fight last Friday, economists say the longest economic expansion on record remained in danger without all import duties being rolled back.

“The drop back in retail sales in September was partly driven by a price-related fall back in gasoline prices, but the fact that underlying control group retail sales were unchanged provides another clear sign that consumption growth is slowing,” wrote Michael Pearce, senior U.S. economist at Capital Economics.

“We think real consumption rose by 2.5% annualised in the third quarter, down from 4.2% rise in the second, with overall GDP growth slowing to just 1.5% annualised, from 2.0%,” he added.

Receipts at clothing stores rose by 1.3%, according to the government’s report, while furniture sales rose by 0.6%. Sales at restaurants and bars gained 0.2%.

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World

United States carried out secret cyber strike on Iran in wake of Saudi oil attack

The United States carried out a secret cyber operation against Iran in the wake of the Sept. 14 attacks on Saudi Arabia’s oil facilities, which Washington and Riyadh blame on Tehran.

The officials, who spoke on condition of anonymity, said the operation took place in late September and took aim at Tehran’s ability to spread “propaganda.”

One of the officials said the strike affected physical hardware, but did not provide further details.

The attack highlights how President Donald Trump’s administration has been trying to counter what it sees as Iranian aggression without spiraling into a broader conflict.

Asked about Reuters reporting on Wednesday, Iran’s Minister of Communications and Information Technology Mohammad Javad Azari-Jahromi said: “They must have dreamt it,” Fars news agency reported.

The U.S. strike appears more limited than other such operations against Iran this year after the downing of an American drone in June and an alleged attack by Iran’s Revolutionary Guards on oil tankers in the Gulf in May.

The United States, Saudi Arabia, Britain, France and Germany have publicly blamed the Sept. 14 attack on Iran, which denied involvement in the strike. The Iran-aligned Houthi militant group in Yemen claimed responsibility.

Publicly, the Pentagon has responded by sending thousands of additional troops and equipment to bolster Saudi defenses – the latest U.S. deployment to the region this year.

The Pentagon declined to comment about the cyber strike.

“As a matter of policy and for operational security, we do not discuss cyberspace operations, intelligence, or planning,” said Pentagon spokeswoman Elissa Smith.

GULF TENSIONS RISE SHARPLY
The impact of the attack, if any, could take months to determine, but cyber strikes are seen as a less-provocative option below the threshold of war.

“You can do damage without killing people or blowing things up; it adds an option to the toolkit that we didn’t have before and our willingness to use it is important,” said James Lewis, a cyber expert with the Washington-based Center for Strategic and International Studies.

Lewis added that it may not be possible to deter Iranian behavior with even conventional military strikes.

Tensions in the Gulf have escalated sharply since May 2018, when Trump withdrew from the 2015 Joint Comprehensive Plan of Action with Tehran that put limits on its nuclear program in exchange for the easing of sanctions.

It was unclear whether there have been other U.S. cyber attacks since the one in late September.

Iran has used such tactics against the United States. This month, a hacking group that appears linked to the Iranian government tried to infiltrate email accounts related Trump’s re-election campaign.

Over 30 days in August and September, the group, which Microsoft dubbed “Phosphorous,” made more than 2,700 attempts to identify consumer accounts, then attacked 241 of them.

Tehran is also thought to be a major player in spreading disinformation.

Last year a Reuters investigation found more than 70 websites that push Iranian propaganda to 15 countries, in an operation that cybersecurity experts, social media firms and journalists are only starting to uncover.

Tensions with Iran have been high since the Sept. 14 attack. Tehran has said an Iranian tanker was hit by rockets in the Red Sea last week and warned that there would be consequences.

On Monday, President Hassan Rouhani reiterated his country’s policy toward the Trump administration, ruling out bilateral talks unless Washington returns to the landmark nuclear deal and lifts crippling U.S. economic sanctions.