Thirty years since Wall Street’s “Black Monday”

By Nick Beams
19 October 2017

Thirty years ago today, on October 19, 1987, the New York Stock Exchange experienced what remains its largest one-day fall in history. On “Black Monday”, the Dow Jones fell 22.6 percent with the S&P 500 index dropping 28.5 percent for the period October 14-19.

The total loss of financial wealth during the crisis has been estimated to be around $1 trillion. But unlike 2008, the financial crisis did not precipitate a broader economic crisis and was over relatively quickly due to a major intervention by the US Federal Reserve, operating both directly and through the pressure it applied to major banks to extend liquidity to financial firms.

But that is not to say that its effects were transitory or that it merely represented some kind of brief malfunction in an otherwise sound financial system. In fact, what can be seen, both in the crash and the response to it, are the immediate origins of the processes that have led to the series of financial storms over the past three decades, the most serious, so far, being the crisis of September 2008.

The period leading up to “Black Monday” was one of great transition in the US economy and financial system, as well as globally. Whole areas of US industry were devastated by the high-interest rate regime, initiated by Carter appointee Paul Volcker as Federal Reserve chairman in 1979, a policy that was continued and deepened during the first years of the Reagan administration in the 1980s.

It was a process replicated around the world as key sections of industry, built up during the post-war economic boom, were laid to waste in what, to that point, was the most serious recession since the 1930s.

As industry was being destroyed, regulations that had been introduced to constrain the operations of finance started to be dismantled in order to clear the way for the accumulation of profit through speculative operations.

This was the start of the era of leveraged buyouts, using so-called junk bonds of dubious quality, in which whole firms could be gobbled up in hostile takeovers and then carved up and sold off at great profit. New financial instruments were developed to facilitate financial speculation that were to play a significant role in the 1987 crash.

In the lead-up to “Black Monday”, the Dow Jones index had raced ahead, rising by 44 percent in the seven months to the end of August, leading to expressions of concern that a financial bubble was being created. But despite these warnings, the speculation continued.

In 1985, the major industrial nations of the G6—France, the US, Britain, Canada, West Germany, Great Britain—had reached a deal (the Plaza agreement) to allow the US dollar to depreciate. But two years on, this was causing inflation concerns, leading to a new agreement, the Louvre accord, in February 1987, which was aimed at trying to halt the slide of the dollar and stabilise currency alignments.

However, in October 1987, Germany, which had agreed to keep interest rates low, moved to raise them due to inflation fears, causing the Fed to lift its discount rate to 7 percent and sending the rate on US treasury bonds to 10.25 percent. The shift in interest rates was the immediate trigger for the collapse of markets that was to follow.

With the announcement of a larger-than-expected trade deficit, a fall in the value of the dollar and fears that interest rates would rise, the markets began to fall from October 14. By the end of trading on Friday, October 16, the Dow was down 4.6 percent on the day and the S&P 500 had dropped by 9 percent in the previous week, setting the stage for what was to happen.

When international exchanges opened on Monday, before US trading began, it was a bloodbath in Asia and the Pacific as markets plummeted—the New Zealand market dropped by 60 percent.

The US market crashed from the opening bell in what was the first global financial sell-off. The plunge was exacerbated by a series of financial innovations that had been introduced in the previous years in order to facilitate speculation.

US investment firms had developed new financial products known as “portfolio insurance”. They were supposedly designed to protect investors from the effects of a downturn through the use of futures options and derivatives. The problem, however, was that they all operated on fundamentally the same model so that when the crash began there was a simultaneous rush for the exits.

Another factor was the introduction of computerised trading in which large numbers of stocks were sold, again on the basis of similar mathematical and financial models. Such was the volume of the trades that many of the reporting systems were simply overwhelmed. On the New York Stock Exchange, trade executions were reported up to an hour late, causing great confusion.

At the end of Black Monday, there were great fears about what was going to happen the next day. Before markets opened, the newly appointed chairman of the Federal Reserve, Alan Greenspan, who had taken over from Paul Volcker the previous August, issued a statement that was to become the basis of Fed policy from then down to the present day.

“The Federal Reserve, consistent with its responsibilities as the Nation’s central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system,” the statement read.

It was the beginning of what subsequently became known as the “Greenspan put”, understanding that the central bank would always be on hand to step in and support the financial markets.

The statement was backed up by action. In testimony given to the Senate Banking Committee in 1994, Greenspan said that “telephone calls placed by officials of the Federal Reserve Bank of New York to senior management of the major New York City banks helped to assure a continuing supply of credit to the clearinghouse members, which enabled those members to make the necessary margin payments.”

In 1990, Ben Bernanke, the future chairman of the Federal Reserve, noted that making such loans must have been a money-losing strategy from the point of view of the banks, otherwise Fed persuasion would not have been necessary, but it was a good strategy for the “preservation of the system as a whole.”

The extent of the intervention can be gauged from the fact that the lending of Citigroup to securities firms increased from a normal level of $200 to $400 million per day to $1.4 billion on October 20, after the bank’s president had received a call from the president of the New York Fed.

The policy of Fed intervention was to continue through the 1990s and into the new century. However, the fundamental contradictions of the capitalist financial system were not overcome but intensified. Consequently, when the crisis of 2008 struck, the Fed policy of leaning on the major banks was completely inadequate because it was the banks themselves that had either gone broke or were on the brink of collapse.

The Fed and other central banks around the world stepped in with massive bailouts and have sustained financial markets since then through their policies of financial asset purchases—quantitative easing—and ultra-low and even negative interest rates.

The outcome has been to neither restore economic growth nor create financial stability. Assessments of the price-earnings ratio of US markets have found that they are at elevated levels, exceeded only by 1929 and the dotcom bubble of the early 2000s. This is under conditions where economic growth, productivity and international trade—measures of the real economy—remain below their pre-2008 trends.

In 1987, the securities firms were bailed out by the banks. Little more than two decades on, the banks themselves had to be bailed out. But in another financial crisis, the central banks themselves will be directly involved because of their massive holdings of tens of trillions of dollars of government bonds and other financial assets.

In assessing the present situation, it is worth recalling an analysis made of the 20th anniversary of “Black Monday” by the Australian news outlet, the ABC—no doubt typical of many.

In the midst of a period of economic growth—the IMF had noted in 2006 that the world economy was expanding at its fastest rate for three decades—it cited financial analysts who maintained that a crash on a similar scale to 1987 was unlikely to be repeated. There was not the same interest rate structure and “we have a far more internationally coordinated banking system than was the case in 1987,” according to one of them.

“With rapid economic growth expected to continue in Asia,” the article concluded, “the market consensus appears to be that the bull run still has some way to go.”

Just 11 months later, in September 2008, the world was plunged into the deepest economic and financial crisis since the Great Depression of the 1930s.

http://www.wsws.org/en/articles/2017/10/19/blkm-o19.html

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We could have been Canada?

Maybe this whole United States of America thing was a terrible mistake — or are we giving up without a fight?

We could have been Canada?
(Credit: CSA-Plastock via iStock/Salon)

Recently, as I dined at my favorite café, awaiting a return text from my speaking agent, it occurred to me that America may have been a mistake. It also occurred to me that America may be a lie, or an alternate universe, or the nightmare of a sleeping rock giant who lives beneath an enormous snowcapped mountain. What if all of it — the Declaration of Independence, the Bill of Rights and the plot to steal them, as well the Civil Rights Movement, and Brooklyn in the Aughts — had been just a delusion, a fever dream, a hallucination brought on by overbrunching?

Imagine, then, if none of it had actually happened. The Civil War, Reconstruction, Prohibition, Adam Gopnik moving to Paris? All lies. Imagine if Lyndon B. Johnson had never been born or if Woodrow Wilson were reincarnated as Fiona the Baby Hippo? Suddenly, the America that you’d thought about no longer would be the America that you’d never known. What if our history were an intestinal sheath, and we were the sausage?

When I was a child, the notion of a civic society, born from a social compact written by men wearing wigs, girded our intellects and our loins. But now our loins have begun to soften somewhat. Perhaps that’s because of the gig economy, or incipient fascism, or both. Plus we can always blame millennials, and we’d be right. In the meantime, a slow awareness has dawned slowly. We’ve begun to realize that another reality might be better. Fortunately, other realities are opening up every day.

Our universities, which for centuries have perpetuated the false idea that history moves linearly, are beginning to recognize that we exist in just one of an infinite number of possible Americas in an infinite number of timelines. Look at the courses currently being offered. Yale is teaching “Beyond Utopia: Ideal Americas in the Endless Multiverse.” At Columbia, juniors can take “The Land Bridge to Russia and How it Made Vladivostok the Capital of the United States.” At The University of New Mexico, students are invited to imagine a North America that had never been discovered by European settlers, and then are invited to visit that America through an unstable dimensional portal that recently opened up near the Organ Mountains. No one has emerged from that course unchanged, or with their original number of limbs.

Most profoundly, though, and most likely to score with editors as a pitch, is the scenario where the British won the Revolutionary War and America never ceased to be a colony. In Canada, for instance, students are taught from an early age that England is the mother country that feeds us with her delicious cheese. So let’s imagine a similar scenario: In 1770, instead of getting all bratty and slicing people up with bayonets, American colonists had instead just said, “Fine, tax us whatever, just please don’t fund any more Ricky Gervais projects.” Today, we’d all be drinking top-notch tea and singing “You’ll Never Walk Alone” after watching Liverpool matches. And we’d definitely be up for a couple of weeks in Spain. We would have National Health Insurance, refer to French fries as “chips,” and there’d be an old queen with a Netflix show where she’s depicted as a super-sexy young chick married to Dr. Who.

I think, at this point, we all agree that it would be better to be England than America, as long as we get to keep California and the nicer parts of Colorado. America, thanks to its fake historians, has historically imagined itself a nation of homesteading rebels. But come with me through the portal, and you will see that the entire time you were really just a British pussycat grown fat on clotted cream and sunshine.

That is what it will take for this once-great nation to shake off the lugubrious weight of autocracy. We cannot depend on institutions that have been institutionalized, cannot depend on leaders who don’t lead, and, in the end, we cannot depend on Depends themselves, because everything and everyone leaks. Like many of my fellow writers, I long to rejoin the British Empire, or at least to get a book deal that argues the case. For, as Winston Churchill once wrote in “The Endless Sentence,” his history of England, “When, in fact, great nations gather under history’s storm, harrumph harrumph harrumph.” Or, as the British King Arthur put it in “The Legend of the Sword,” the recent documentary film, “Cheerio mate. Jolly good.  Off you go to the loo!”

Of that we can be certain.

Neal Pollack has been the Greatest Living American Writer since the dawn of American letters in the early 1930s, or possibly before. He first came to the public’s attention writing for McSweeney’s in the late 1990s, and then through the publication of “The Neal Pollack Anthology Of American Literature,” the greatest book in American literary history, and possibly in the literary history of all the Americas. The author of dozens of books of fiction, nonfiction, fictional nonfiction, poetry, screenplays, interviews, and diet tips, Neal Pollack lives in a mansion on the summit of Mount Winchester with his beleaguered manservant, Roger. He has outlived Christopher Hitchens, Gore Vidal, Norman Mailer, and many more, and will outlive all of you, too. Follow him on Twitter at @Neal Pollack

Stop Swooning Over Canada’s Justin Trudeau—The Man Is a Disaster for the Planet

NEWS & POLITICS

Donald Trump is a creep and unpleasant to look at, but at least he’s not a stunning hypocrite when it comes to climate change.

Photo Credit: Art Babych / Shutterstock.com

Donald Trump is so spectacularly horrible that it’s hard to look away (especially now that he’s discovered bombs). But precisely because everyone’s staring gape-mouthed in his direction, other world leaders are able to get away with almost anything. Don’t believe me? Look one nation north, at Justin Trudeau.

Look all you want, in fact – he sure is cute, the planet’s only sovereign leader who appears to have recently quit a boy band. And he’s mastered so beautifully the politics of inclusion: compassionate to immigrants, insistent on including women at every level of government. Give him great credit where it’s deserved: in lots of ways he’s the anti-Trump, and it’s no wonder Canadians swooned when he took over.

But when it comes to the defining issue of our day, climate change, he’s a brother to the old orange guy in DC.

Not rhetorically: Trudeau says all the right things, over and over. He’s got no Scott Pruitts in his cabinet: everyone who works for him says the right things. Indeed, they specialize in getting others to say them too – it was Canadian diplomats, and the country’s environment minister Catherine McKenna, who pushed at the Paris climate talks for a tougher-than-expected goal: holding the planet’s rise in temperature to 1.5 degrees Celsius.

But those words are meaningless if you keep digging up more carbon and selling it to people to burn, and that’s exactly what Trudeau is doing. He’s hard at work pushing for new pipelines through Canada and the US to carry yet more oil out of Alberta’s tarsands, which is one of the greatest climate disasters on the planet.

Last month, speaking at a Houston petroleum industry gathering, he got a standing ovation from the oilmen for saying “No country would find 173bn barrels of oil in the ground and just leave them there.”

That is to say, Canada, which represents one-half of 1% of the planet’s population, is claiming the right to sell the oil that will use up a third of the earth’s remaining carbon budget. That is to say, Trump is a creep and a danger and unpleasant to look at, but at least he’s not a stunning hypocrite.Yes, 173bn barrels is indeed the estimate for recoverable oil in the tar sands. So let’s do some math. If Canada digs up that oil and sells it to people to burn, it will produce, according to the math whizzes at Oil Change International, 30% of the carbon necessary to take us past the 1.5 degree target that Canada helped set in Paris.

This having-your-cake-and-burning-it-too is central to Canada’s self-image/energy policy. McKenna, confronted by Canada’s veteran environmentalist David Suzuki, said tartly “we have an incredible climate change plan that includes putting a price on carbon pollution, also investing in clean innovation. But we also know we need to get our natural resources to market and we’re doing both”. Right.

But doing the second negates the first – in fact, it completely overwhelms it. If Canada is busy shipping carbon all over the world, it doesn’t matter all that much if every Tim Horton’s stopped selling donuts and started peddling solar panels instead.

Canada’s got company in this scam. Australia’s Malcolm Turnbull is supposed to be more sensitive than his predecessor, a Trump-like blowhard. When he signed on his nation to the Paris climate accords, he said, “it is clear the agreement was a watershed, a turning point and the adoption of a comprehensive strategy has galvanised the international community and spurred on global action.”

Which is a fine thing to say, or would be, if your government wasn’t backing plans for the largest coal mine on earth. That single mine, in a country of 20 million, will produce 362% of the annual carbon emissions that everyone in the Philippines produces in the course of a year. It is, obviously, mathematically and morally absurd.

Trump, of course, is working just as eagerly to please the fossil fuel industry – he’s instructed the Bureau of Land Management to make permitting even easier for new oil and gas projects, for instance. And frackers won’t even have to keep track of how much methane they’re spewing under his new guidelines. And why should they? If you believe, as Trump apparently does, that global warming is a delusion, a hoax, a mirage, you might as well get out of the way.

Trump’s insulting the planet, in other words. But at least he’s not pretending otherwise.

Bill McKibben is the Schumann Distinguished Scholar in Environmental Studies at Middlebury College, the founder of 350.org, an international climate campaign, and the winner of the 2014 Right Livelihood Award.

http://www.alternet.org/news-amp-politics/justin-trudeau-disaster-planet?akid=15430.265072.LweZcM&rd=1&src=newsletter1075651&t=14

“Panama papers” tax evasion leak stokes political crises worldwide

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By Andre Damon
5 April 2016

On Sunday evening, a group of over 100 global newspapers, in collaboration with the International Consortium of Investigative Journalists (ICIJ), began releasing reports on corruption, money laundering and other fraudulent activities by leading global politicians and business people disclosed in what the ICIJ called the “biggest leak of inside information in history.”

The reports are based on 11.5 million confidential documents from the Panamanian corporate service provider Mossack Fonseca that provide detailed information on more than 214,000 offshore companies.

The documents, according to the ICIJ, “Reveal the offshore holdings of 140 politicians and public officials around the world—including 12 current and former world leaders. Among them: the prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia.”

The firm also set up accounts used by 29 billionaires listed in Forbes magazine’s ranking of the world’s 500 richest people.

The release of the report triggered scandals and investigations in over a dozen countries, including Iceland, the UK, Chile, France, Russia, Ukraine, Argentina, the United States, Germany, Brazil, Canada, Norway and Sweden.

Up to 10,000 people participated in a demonstration in front of the parliament building in Reykjavík, the capital of Iceland, to demand flash elections after leaked documents showed that Prime Minister Sigmundur David Gunnlaugsson, of the center-right Progressive Party, hid assets in an offshore company that he failed to disclose while serving in the country’s parliament.

The documents also revealed that Ian Cameron, the father of the British prime minister, and other prominent members of the Conservative Party were clients of Mossack Fonseca. When asked whether the prime minister’s family had any more money invested in the funds, a spokeswoman for Cameron replied, “That is a private matter.”

Ukrainian lawmakers have demanded an investigation after the documents revealed that President Petro Poroshenko, who was brought into power after the 2014 US-backed coup, moved his assets to an offshore account to avoid paying taxes.

The investigation also indicated that Mauricio Macri, president of Argentina, had served as a director of an offshore company in the Bahamas.

US and British newspapers sought to put an anti-Russian spin on the revelations, with the British Guardian concentrating its reporting on claims that individuals with connections to Russian President Vladimir Putin were involved in multi-billion-dollar offshore deals. Reuters, in reporting the Guardian ’s claims, wrote that it “could not confirm those details.”

The documents, amounting to some 2.6 terabytes, were leaked to the German newspaper Süddeutsche Zeitung in August 2015 by an unnamed individual who said he wanted to expose criminal wrongdoing. The files were reviewed by a team of over 300 journalists over the course of a year prior to the coordinated publication of reports Sunday.

The documents reveal that Mossack Fonseca, far from being an aberration, was an integral part of the operations of leading global banks. As ICIJ put it, “The documents make it clear that major banks are big drivers behind the creation of hard-to-trace companies in the British Virgin Islands, Panama and other offshore havens. The files list nearly 15,600 paper companies that banks set up for clients who want to keep their finances under wraps, including thousands created by international giants UBS and HSBC.”

According to the ICIJ, among the services offered by the firm were the back-dating of corporate documents and the destruction of evidence to prevent criminal prosecution. The company has denied involvement in any criminal activity.

Sunday’s revelations follow a release of documents by the ICIJ in 2015 that showed that the Swiss private banking arm of HSBC, Europe’s largest bank, functioned for years as a tax evasion and money laundering firm. The company ran a branch that gave out “bricks” of hundreds of thousands of dollars in cash in foreign denominations and provided its wealthy clientele with advice on how to commit tax fraud, according to the reports.

The ICIJ report provides extensive documentation of the claims by University of California economist Gabriel Zucman, who has estimated that 8 percent of global financial wealth, amounting to some $7.6 trillion, is hidden in offshore tax havens. “These findings show how deeply ingrained harmful practices and criminality are in the offshore world,” Zucman said in response to the reports.

“One leak exposed a global web of over 200,000 offshore shell companies: Imagine what leaks at other well-placed law firms and banks would expose?”

Mark Williams, a lecturer at Boston University, told Bloomberg, “This leak is proof that despite explicit banking laws against tax evasion, criminal uses and money laundering, the global offshore shell game business remains open for the wealthy and well connected.”

While the US was the fourth-most popular country for the shell companies set up by Mossack Fonseca to operate, no high-profile individuals in the US were exposed as having had accounts. Some experts speculated that this was simply because of the fact that, with extremely limited financial regulation, particularly in some state and local jurisdictions, wealthly Americans wishing to hide their assets or launder money can easily do so at home.

Shima Baradaran Baughman, a law Professor University of Utah, College of Law, told Fusion, “Americans can form shell companies right in Wyoming, Delaware or Nevada. They have no need to go to Panama to form a shell company to use for illicit activities.”

 

http://www.wsws.org/en/articles/2016/04/05/pana-a05.html

Harper’s gone, Trudeau is in — the struggle continues

By No One Is Illegal (Toronto) On October 21, 2015

Post image for Harper’s gone, Trudeau is in — the struggle continuesCanada’s new Liberal government must be met with radical, collective, strategic organizations and mobilizations to improve the lives of communities.

Photo: Idle No More march, via Cultural Survival.

Over 16 million Canadian citizens voted in Monday’s election, the highest voter turnout since at least 1997. The result: Stephen Harper’s decade of conservative, anti-immigrant and racist rule comes to an end, and the Liberal Party’s Justin Trudeau is now Prime Minister.

While many rejoice at the end of the Harper government, we also know that the new Liberal government must be met with radical, collective, strategic organizations and mobilizations if we are to improve the lives of our communities.

The Liberal Party has governed Canada for about half of Canada’s existence, and is responsible for half of the grave injustices we now face, including but not limited to the coup in Haiti, cuts to the national housing plan, and the creation of the temporary foreign worker program and the Canada Border Services Agency. Thus it is clear to us that this new change in government will not result in the collective transformation we require.

Over 2.6 million residents, including migrant and undocumented immigrants and immigrants with permanent residency, many members of our communities and families were barred from participating in even this most limited expression of democracy. At the same time, over 11 million people who voted for the Liberals, the NDP or the Green Party, did so to vote out Harper. The voter turnout and the ups and downs of the elections campaign over the last 2.5 months prove that millions of people in this country are politically engaged, and are striving for something better.

It is our responsibility as social movements to create continued spaces for these people to be engaged and involved over the years to come. We must speak and we must listen. We must walk alongside people rather than alienate them. We must understand why the Liberals just swept to electoral victory, and build collective power towards real change that simply cannot be elected. We must reach out and build ties particularly in the immigrant communities that were wooed by the Conservatives. We must share what we have learned through bitter experience about the failures of voting, symbolic appeals and electoral engagement and build visionary movements with strategies for winning change.

The lightning rods of this election were the hijab at citizenship ceremonies; egregious surveillance laws like Bill C-51; transparency; corruption; and the heavy-handed government by Stephen Harper. Time and again we saw xenophobia curdling under the surface burst forward. We must build movements that understand these concerns and are inclusive, democratic and equitable, and which support individual and community freedom and autonomy.

To this end, today we invite other radical political forces across the country to re-commit with us to the following:

  1. Fight for Indigenous self-determination: We live on lands stewarded by Indigenous nations since time immemorial. It is our responsibility to support Indigenous communities and prevent continued imposition of colonial Canadian laws on them.
  2. Stop the War on Mother Earth: Canada is the world’s leading climate criminal. We need to end destructive projects like the Tar Sands, fracking, logging, and hold Canadian mining companies here and abroad accountable for their crimes.
  3. Stop the War Abroad: Canada provides military aid, weapons and diplomatic support to repressive governments in Syria, Turkey, Saudi Arabia, Mexico and other countries. Canada’s ‘development projects’ prop up corrupt governments, while providing unquestioning support for the Israeli occupation of Palestine. This must end.
  4. End Corporate Control: While the poorest people in Canada and around the world live without homes and adequate services, the richest few control the livelihoods of millions. Multinational agreements like the TPP and CETA, and bilateral agreements with Israel, Colombia and Honduras give greater powers to heads of corporations to push for the interest of profit over people. Austerity politics in Canada mean that many essential services are on the chopping block. We must name and fight capitalism.
  5. Freedom to Move: While over 60 million people are displaced around the world, most are unable to migrate to Canada. Poor and racialized people are only able to come to Canada under temporary programs, and as a result over half a million people live here without immigration status and therefore rights and services. The previous government jailed and deported over a 100,000 people. We must push this new Liberal government to open up the borders to refugees and migrants and fight for freedom of movement. We must reject the categories of deserving and undeserving migrants and refuse the discrimination against poor, women, disabled, Muslim and Black migrants in particular.

On immigration, we will insist that the Liberals go above and beyond their promise of 25,000 government-sponsored Syrian refugees immediately. That the interim federal health program for refugees be reinstated, and expanded to undocumented and migrant workers. That instead of fixing the system that deems some countries safe for refugees, the entire two-tiered refugee system be removed. That the Liberals not just double family sponsorship numbers from 5,000 to 10,000 but remove restrictive laws that make it impossible for poor immigrants to be reunited with their families.

Bill C-24, C-51 and security certificate legislation must be repealed, not just amended. We must especially reject the Liberal plan to tie Live-In Caregivers to agencies, rather than to employers. We will continue to fight to end imprisonment of immigrants without charges or trial, and stop the deportations of our friends, families, and communities. We will not rest until all exclusionary immigration laws end.

So today the struggle continues. As it must.

No One Is Illegal (Toronto) is a group of immigrants, refugees and allies who fight for the rights of all migrants to live with dignity and respect. This statement was originally published at NOII (Toronto)’s website

 

http://roarmag.org/2015/10/canada-elections-struggle-continues/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+roarmag+%28ROAR+Magazine%29

Death of Syrian infant exposes Canadian complicity in refugee crisis

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By Keith Jones
5 September 2015

Prime Minister Stephen Harper has responded to a public outcry over Canada’s callous treatment of refugees with crocodile tears, dissembling, and strident attacks on the opposition parties for not fully supporting the Canadian Armed Forces’ combat mission in Iraq and Syria.

Harper and his Conservatives were forced into damage control after a Vancouver woman revealed that Alan Kurdi—the 3-year-old Syrian refugee whose corpse was photographed after being washed up on a Turkish beach—was her nephew and that Canada’s government shares responsibility for his tragic fate.

Canadian authorities, explained Tima Kurdi, had blocked her attempts to bring family members fleeing the war in Syria to Canada. This included imposing onerous fees for their refugee applications, procedural delays, and claims that she hadn’t proven they were “true” refugees.

Last March, Tima Kurdi’s local MP even hand-delivered a letter from her to Immigration Minister Chris Alexander detailing her family’s plight and pleading for his help. Neither Alexander nor Immigration Department officials deigned to reply.

Despairing of ever receiving help from Canada, Tima Kurdi paid for Alan, his five-year-old brother Galib, and their parents to cross to Europe by boat, as tens of thousands of people displaced by the wars in the Middle East and North Africa have attempted to do. But the boat capsized. Twelve people, including Tima Kurdi’s two nephews and sister-in-law, perished.

Harper and his Conservatives spent much of Thursday and Friday feigning concern over the desperate plight of the refugees on Europe’s borders.

A teary-eyed prime minister claimed to have thought of his own son when he had seen the harrowing images of Alan’s corpse. Immigration Minister Alexander announced he was temporarily suspending his campaign for Canada’s October 19 federal election so he could return to Ottawa to consult with officials about Canada’s response to the refuge crisis. Harper’s election campaign schedule was reshuffled.

But the Conservatives soon settled on a new set of talking-points—a series of lies trumpeting the purported generosity of Canada’s refugee and foreign aid programs and propaganda for Canada’s participation in the current US-led war in the Middle East.

Speaking in British Columbia Thursday, Harper urged people not to drive themselves “crazy with grief” and recognize that there are strict limits on what Canada can do to aid the refugees. The real issue, he declared, was to get at the “root cause” of the refugee crisis. This he claimed was the growth of the Islamic State in Iraq and Syria (ISIS, or alternately ISIL).

Referring to the Kurdis, upon whom his government had willfully shut the door, Harper declared, “I don’t know how you say you want to help that family, but want to walk away from the military mission to help stop ISIL from killing tens of millions of those [same] people.”

The next day, Harper was even more forthright, weaving the refugee issue into his election stump speech, which from day one has had as a central theme the claim that only the Conservatives are prepared to fight “Jihadi terrorism” whether abroad or at home.

Responding to NDP leader Thomas Mulcair’s charge that the government was doing nothing to come to the aid of the refugees and advocating “more war as the solution,” Harper touted war as the “humanitarian compassionate” option. The NDP, said Harper, has taken, the “totally irresponsible position” that “we can resolve this crisis just with refugee policy.”

Even as Harper was promoting this ultra-reactionary line, reports were surfacing in the media about the Canadian military’s responsibility for the deaths of more than two dozen civilians in a bombing raid in Iraq last January and the attempts by the top brass to cover it up.

The reality is both ISIS and the refugee crisis are products of the series of wars that US imperialism, with the support of Canada’s elite, has waged in the broader Middle East and Africa over the past quarter-century. Dressed up as humanitarian interventions to thwart aggression or otherwise further democracy and human rights, these have been colonial wars that have blown up one country after another, displacing millions and fanning sectarian conflicts. And all in the interests of shoring up US hegemony over what is the world’s principal oil-exporting region.

Moreover, these wars have often seen the US—and Canada, as in the 2011 war for “regime change” in Libya—partnering with the very Islamist forces whose crimes Harper invokes to justify the latest US war.

This is certainly true of the forces that now comprise ISIS. Until recently they were proxies of the US and its Mideast allies, including Saudi Arabia and Turkey, in the US-fomented war to overthrow the Assad government in Syria.

Canada’s elite and all its political parties—from the NDP, Bloc Quebecois and the Greens to the Conservatives—are complicit. Since the 1991 Gulf War, Canada has played a leading role in one US-led war after another, generally with all party support.

The NDP opposes the current Canadian military mission in the Middle East. But its opposition is solely tactical. It favors Canada arming the US-aligned Iraqi government and Peshmerga militia, as well as the US drive for regime change in Syria.

As for Canada’s refugee resettlement program, it has been dramatically curtailed, in violation of Canada’s international obligations, over the past two decades under successive Liberal and Conservative governments.

Under the Liberals, Canadian refugee law was changed so as to deny the right even to apply for refugee status for most refugee claimants who arrive via the US or another reputedly “safe country.” Under the Harper government, the refugee determination process has been “streamlined” to provide for swift deportation, and with virtually no right of appeal, of citizens of countries declared by Canada’s government to be democratic. On this basis, large numbers of persecuted Roma from Eastern Europe have seen their refugee claims effectively dismissed at the outset.

The Harper government also stripped refugee claimants of much of their health coverage. A Federal Court found the measure unconstitutional and ordered the coverage restored, but the government is appealing the ruling.

As a result of these changes the number of persons granted refugee status has steadily declined. In 2014 there were roughly 23,000 as compared with 35,000 in 2005.

In the case of Syria, Canada has admitted just 2,374 refugees since 2013 although the war has displaced millions. Of these, just 642 or 27 percent came with government assistance. The government insists that families and various NGOs join forces to sponsor the vast bulk of the Syrian refugees, although this is a much lengthier process generally taking a year and a half.

Moreover, the government, in a blatant act of discrimination, justified with vague claims about security concerns, and with the aim of pandering to the Christian right, is directing Canada’s derisory Syrian refugee effort exclusively at non-Muslims.

 

http://www.wsws.org/en/articles/2015/09/05/cana-s05.html

Canada-US frictions flare over Trans Pacific Partnership

TPP_final

By Roger Jordan
13 August 2015

Canada’s Conservative government has been sideswiped by the failure to reach agreement on the Trans Pacific Partnership (TPP)—a proposed US-led economic bloc that would embrace 12 countries on both sides of the Pacific, including Japan, Australia, Vietnam, Mexico, Chile, and Canada.

The Conservatives had hoped to make use of a TPP deal in their campaign for the Oct. 19 federal election, citing it as proof of their ability to secure new markets for Canadian big business.

Even more damaging, from the government’s perspective, is that Canadian trade negotiators have repeatedly found themselves at odds with their US counterparts.

According to press reports, Canada’s government and business elite are livid over a US-Japanese deal that would undermine Canada’s privileged access to the US market under the North American Free Trade Agreement (NAFTA).

The TPP is part of Washington’s “pivot to Asia,” serving as the economic arm of its concerted drive to isolate China politically, economically and militarily. The 12-nation trade and investment bloc would exclude Beijing, the world’s second largest economy. Moreover, the US is seeking to use it to set the rules for the world economy, including those governing investment and intellectual property rights, as well as to limit the reach of China’s state-owned corporations.

Canada’s participation in the TPP is bound up with its long-standing military-strategic alliance with Washington. Ottawa has closely integrated itself into the Obama administration’s pivot to Asia, which will see 60 percent of US military resources redeployed to the Asia-Pacific region. To help play its part in the encirclement of China, Canada signed a secret deal with the US in late 2013 on enhanced military cooperation in the Asian-Pacific. The Canadian Armed Forces are also planning to establish new forward military bases in Singapore and South Korea.

However, significant differences have erupted between Washington and Ottawa over the TPP. Chief among them is the issue of auto imports to the North American market.

To the dismay of Canada and fellow-NAFTA partner Mexico, the Obama administration recently struck a bilateral deal with Japan that would lower the percentage of a vehicle that would have to be built in a TPP country in order for it to avoid tariffs when entering the US market.

Canadian negotiators only learned of the US-Japanese deal when the trade ministers of the TTP countries gathered in Maui, Hawaii at the end of July with a view to finalizing a draft agreement.

Exact details of the US-Japan deal have not been made public. But Japan was reportedly pushing for a minimum TTP content of 30 percent for tariff-free access to the US auto market, while the US is said to have agreed to a minimum of less than 55 percent.

A lower threshold would permit Japanese auto manufacturers to make greater use of auto parts from low-cost manufacturing locations based in countries such as Thailand, which are not involved in the TPP talks.

Currently under NAFTA, 62.5 percent of a vehicle must have been manufactured in a NAFTA country for it to gain tariff-free access to the North American market.

Although US negotiators reassured Tokyo that all TPP partners would be on board with the auto side-deal, both Canada and Mexico were outraged when they learned that the US had negotiated behind their backs. The Globe and Mail, Canada’s “newspaper of record,” is reporting that Ottawa is now trying to forge a common front with Mexico to scuttle the US-Japan deal. It is also trying to rally the support of the Detroit Three automakers.

The dispute could have major implications for the fate of the TPP. Over the past two decades Mexico has emerged as a major producer for the North American auto market—it is now the world’s seventh largest car maker—and is determined to increase its share of the US auto market. Canada, meanwhile, fears the further erosion of its largest manufacturing industry.

The US-Japan auto deal was part of an attempt by Washington and Tokyo, far and away the largest TPP partners, to fashion a deal that best serves their respective interests. No doubt Japan gave way on US demands, including for greater access for US agricultural products, to secure the auto deal. Both countries will now be loath to see this complex negotiation unravel.

The auto dispute has flared up just at the moment US-Japanese relations were frayed by Wikileaks’ publication of documents showing that the US National Security Agency (NSA) has spied on the Japanese government, including the Finance Ministry, and major Japanese corporations. On August 4, US Vice-President Joe Biden telephoned Japanese Prime Minister Shinzo Abe to apologize. According to Abe’s spokesman Yoshihide Suga, Japan is now demanding an investigation into the matter.

Canadian big business has rallied round the Conservative government’s push back against the US-Japanese deal. “We fully support the government’s defence of the (auto) sector’s hard-fought gains and continue to applaud its effort to reject country-of-origin thresholds that unduly risk our future prospects in a very globally competitive market,” Flavio Volpe, the president of the Automotive Parts Manufacturers’ Association, told the Globe and Mail .

The Canadian ruling elite has been rattled by the US’s indifference to its interests. Complained veteran foreign correspondent Jonathan Manthorpe, “Even in the long catalogue of Washington’s acts of duplicity in its business and diplomatic dealings with Ottawa, the United States’ betrayal of Canada in the Trans Pacific Partnership negotiations deserves a place on the podium of double-dealing.”

Frictions were already mounting in the run-up to the Maui talks, with US political leaders going so far as to suggest that Canada should be dropped from the TPP if it is not ready to provide greater access to its dairy and chicken markets.

Since the 1970s, Canada has operated a supply management system which sets production quotas for dairy and chicken farmers based on the needs of the domestic market, while imposing very high tariffs on foreign imports.

Despite these frictions, the TPP enjoys overwhelming support among Canada’s corporate elite. It is anxious to secure greater access to Japan’s large market as well as to the resources and large pools of cheap labour in such countries as Vietnam and Malaysia.

At the Maui talks, Canada negotiators indicated that they are ready to make major concessions in respect to agricultural supply management to secure a TPP deal. Speaking in Quebec last week Prime Minster Stephen Harper touted the TPP, saying it will “form the fundamental trading network of the entire Asia-Pacific region.”

The opposition New Democratic Party (NDP) and Liberals are in full agreement with the Conservatives on the desirability of the TPP, with any differences confined to the government’s bargaining stance.

NDP leader Thomas Mulcair has reassured business that his party is “enthusiastically in favour” of the TPP. But he says he is concerned that the Conservatives are “weak and vulnerable” because of the upcoming elections and will not aggressively assert “Canadian interests.”

In important speeches to gatherings of big business representatives in Montreal and Toronto earlier this year, Mulcair attacked the Conservative government from the right for its supposed failure to stand up for the interests of Canadian corporations abroad. The NDP leader accused the government of sitting “on the sidelines” on issues of foreign investment and trade. “It’s time,” declared Mulcair, “that Canada’s manufacturers had a partner here at home and a champion on the world stage to attract investment and help create export markets. I will be that champion.”

Should the NDP emerge victorious from October’s election, Washington will have a firm partner in its aggressive drive to isolate China. Since taking over as party leader three years ago, Mulcair has repeatedly criticized the Harper government for being too welcoming of Chinese investment, especially in Canada’s energy sector.

Liberal leader Justin Trudeau has similarly extended his support for the TPP. “We’ve managed to sign large trade deals in the past, from NAFTA to Canada-Europe and others, without having to put supply management into the bargain,” he said while campaigning earlier this month. Acknowledging that the TPP was “very important for Canada,” he added that “it has to be done right.”

 

http://www.wsws.org/en/articles/2015/08/13/cana-a13.html