Monday, August 3, 2020
White House engineering a takeover of TikTok by Microsoft
https://www.wsws.org/en/articles/2020/08/03/tikt-a03.html
By Kevin Reed
3 August 2020
In a state-sponsored hostile takeover, Microsoft Corporation announced late Sunday that it was moving forward with plans to acquire the mobile app TikTok from the China-based corporation ByteDance following a discussion with President Donald Trump.
In a blog post, Microsoft said its CEO Satya Nadella spoke with the president and “is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.” The post said the acquisition would be completed “no later than September 15, 2020.”
The takeover would involve the absorption by Microsoft of the operations of the social media video sharing platform in the US, Canada, Australia and New Zealand. According to Microsoft, the TikTok acquisition will be conducted with an unprecedent level of White House involvement. The statement says, “During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President.”
Additionally, Microsoft is indicating that the new owners of the extremely popular app will operate TikTok under the direct supervision of the state security institutions within the countries where it will operate. “The operating model for the service would be built to ensure transparency to users as well as appropriate security oversight by governments in these countries.”
The Microsoft announcement comes as no surprise, following the appearance of Secretary of State Mike Pompeo on the Fox News “Sunday Morning Futures” earlier in the day. Pompeo said that President Donald Trump “will take action in the coming days” on mobile apps, including TikTok, as part of a growing White House offensive against China.
Although he stopped short of saying precisely what the president was going to do, Pompeo claimed without any evidence that “Chinese software companies doing business with the United States, whether it’s TikTok or WeChat” are feeding data directly to the “national security apparatus” in China.
In a statement clearly designed to whip up anti-Chinese sentiments, Pompeo added that Americans using TikTok were having their facial profiles and “information about their residence, their phone numbers, their friends, who they’re connected to” scraped by the Chinese government. He went on to say that these are “true privacy issues for the American people” and that “President Trump has said, ‘Enough,’ and we are going to fix it.”
Pompeo concluded, “I promise you, the President when he makes this decision will make sure that everything we have done drives this as close to zero risk for the American people.”
The short-form video sharing platform has approximately 80 million users in the US, 800 million worldwide and has been downloaded 2.2 billion times. ByteDance has said that its servers are located in the US and Singapore, and tech experts have pointed out that TikTok gathers user data in a manner similar to other popular social media apps.
That Pompeo is making hysterical and unsubstantiated statements is a demonstration of the desperate nature of the aggressive moves by the Trump White House against China. The administration is attempting to deflect the mass opposition to Trump’s response to the coronavirus pandemic and the authoritarian police measures against protesters across the country in the intensifying anti-China campaign in order to prop up his collapsing reelection prospects.
Meanwhile, it is well-known internationally—primarily due to the exposures by the former national security contractor Edward Snowden in 2013—that the US National Security Agency (NSA) is the number one electronic surveillance operation in the world, gathering data on every single person on earth and storing it in massive server farms such as the Utah Data Center.
On Friday, Trump told reporters that he was going to act soon to ban TikTok. Speaking with reporters on board Air Force One on a flight back to Washington from Florida, he said, “As far as TikTok is concerned, we’re banning them from the United States.” He then called the ban a “severance” and said he had the authority to make the decision. “I can do it with an executive order.”
However, news of Microsoft’s involvement in a forced divestiture of TikTok by ByteDance emerged before the weekend as it was revealed that the Committee on Foreign Investment in the US (CFIUS) was involved. According to a report in the Wall Street Journal , CFIUS began its investigation into TikTok last year following concerns raised in Congress. “The Treasury-led foreign-investment committee is made up of federal agencies and reviews deals involving foreign money to ensure they don’t put the country’s national security at risk.”
No doubt a major consideration in the negotiations over TikTok is the fact that the company has recently valued at $150 billion with major investments from US equity firms Coatue Management and Sequoia Capital. Along with the huge US user base, the entanglement of the American financial elite with TikTok make an outright ban a double-edged sword for President Trump and, in the end, it appears that it will be much better to just steal the company from ByteDance under the auspices of national security concerns.
An article in Forbes by Peter Cohen indicates the thinking among American business pirates. “If that deal goes through for the roughly $5 billion, I estimate TikTok’s US operations are worth, you should buy Microsoft shares. ... the triple digit acceleration of TikTok’s user base could add oomph to Microsoft’s top line,” Cohen wrote on Saturday.
The role of the Democrats in the US seizure of TikTok exposes the fact that they have no fundamental differences with the Trump White House. Stephen Mnuchin, who heads CFIUS and has been leading the negotiations with Microsoft and the TikTok investors over the takeover, said on “ABC News” on Sunday that the view that “there has to be a change” is shared by House Speaker Nancy Pelosi (Democrat of California) and Senate Majority Leader Chuck Schumer (Democrat of New York).
Schumer began ringing alarm bells about TikTok last November in a letter to Army Secretary Ryan McCarthy over the US military’s use of TikTok to recruit young people. Schumer wrote, “I urge you to assess the potential national security risks posed by China-owned technology companies before choosing to utilize certain platforms.”
Schumer’s campaign was echoed by Senator Marco Rubio (Republican of Florida), who took the issue to CFIUS, and Senator Josh Hawley (Republican of Missouri), who held a hearing on TikTok’s relationship with the Chinese government.
In this particular instance, it is apparent that Pompeo and Trump have now borrowed a few lines from Schumer, who wrote another letter to Transportation Safety Administration Director David Pekoske in February that said, “National security experts have raised concerns about TikTok’s collection and handling of user data, including user content and communications, IP addresses, location-related data, metadata, and other sensitive personal information.” Schumer added, “particularly when viewed in light of laws that compel Chinese companies to support and cooperate with intelligence work controlled by the Chinese Communist Party.”
US credit outlook rated “negative” as concerns mount over dollar’s global role
https://www.wsws.org/en/articles/2020/08/03/doll-a03.html
By Nick Beams
3 August 2020
In another sign of concern over the stability of the US dollar, under conditions where the Fed is pumping trillions into the financial system, the Fitch credit rating agency has placed a question mark over the credit worthiness of the United States.
The agency downgraded its outlook for US credit to “negative” from “stable” on Friday, while retaining its AAA rating—the top grade—for the credit of the US. The agency raised issues about whether the US would be able to contain rising deficits as the government continues its corporate bailouts.
In a statement announcing the downgrade, the agency said the US sovereign rating was supported by “structural strengths” and benefited from the role of the dollar as the world’s preeminent currency. However, the outlook had been revised to negative “to reflect the ongoing deterioration in the US public finances and the absence of a credible fiscal consolidation plan.”
Fiscal deficits had already been on a rising path before the economic shock delivered by the COVID-19 pandemic and they had started to “erode the traditional credit strength of the US,” Fitch declared. Now, there was a “growing risk that US policymakers will not consolidate public finances sufficiently to stabilise public debt after the pandemic shock has passed.”
Articulating the class interests of the financial oligarchy in the US and internationally, it made clear where such “consolidation” should take place—not in reductions to the corporate bailouts or a reversal of the massive corporate and personal tax cuts for higher income earners enacted by Trump at the end of 2017.
With one eye clearly fixed on the development of the class struggle, Fitch said: “Having laid bare inequalities in the provision of health care and exacerbated widening wealth inequality… the crisis could also lead to pressure for higher public spending, greater state involvement in the economy, redistribution of incomes and moves to strengthen workers’ bargaining power.”
It left no doubt about how such issues should be dealt with. “The economic crisis has likely brought forward the point at which social security and healthcare trust funds are exhausted, demanding bipartisan legislative action to sustainably fund or reform these programs,” it said. In other words, there should be an assault on spending for basic social services.
Pointing to what it called the “exceptional financing flexibility” of the US—the borrowing by the US government of $3 trillion from February to June and the interventions of the Fed to “backstop financial markets”—Fitch raised the longer-term consequences of these actions.
In what appeared to be a concession to so-called Modern Monetary Theory, which maintains that as the US is the issuer of its own currency it can never run out of funds—a theory widely promoted in pseudo-left circles—it said: “It is a truism that the US government can never run out of money to service its debts. However, there is a potential (albeit remote) risk of fiscal dominance if [debt-to-GDP] spirals, posing risks to US economic dynamism and reserve currency status.”
Concerns about the global role of the dollar as a result of the rise of government debt and the expansion of the Fed’s financial asset holdings, which have increased from under $1 trillion on the eve of the 2008 financial crisis to around $7 trillion today, go well beyond Fitch and other agencies.
In an editorial published at the weekend, the Financial Times warned that the world economy “is in a dangerous place.” Pointing to the resurgence of COVID-19 infections in Europe, Australia and Japan, where the virus had appeared to be contained, it said: “This was the week when hopes for a short lockdown followed by a swift resumption of economic activity were dashed once and for all.”
This meant, the editorial continued, that it was likely governments would have to continue to borrow and spend. The implications were examined in a separate article titled “Dollar blues: why the pandemic is testing confidence in the US currency.”
The article noted that since the initial scramble for dollars in the crisis that hit financial markets in mid-March as the pandemic struck, the dollar has been falling in currency markets, recording its biggest monthly decline for a decade in July.
The Financial Times wrote that the 5 percent fall in the US currency over the month “might sound modest but in the relatively stable foreign exchange market that counts as dramatic.” It added that such a sharp move “inevitably raises questions that go to the heart of the global financial system and the unique role that the US currency plays.”
Those questions are increasingly coming into prominence because of the rise in the price of gold, now trading at a record high of between $1,900 and $2,000 per ounce. Investors, the article noted, are seeking an alternative to the US currency, and as American politics becomes increasingly dysfunctional, “some are openly asking… whether US institutions are now too weak for the world to rely on the dollar.”
Opponents of the view that the dollar could lose its privileged status maintain there is no possibility of it being replaced as the world’s reserve currency, either by the euro or the Chinese yuan. This is because the financial systems of both the euro zone and China are nowhere near large or sophisticated enough for their currencies to play the global role of the dollar.
That analysis is correct as far as it goes. But it does not go far enough. A dollar crisis will not bring about its replacement by the currency of another country or region. Rather, it will set off a crisis of confidence in all fiat currencies and a breakdown of international trading and financial relations.
The FT article cited remarks by David Riley, a chief investment strategist at BlueBay Asset Management in London. He noted that the US government bond market, where yields on 10 year bonds have gone negative when inflation is taken into account, “is reflecting the fact that the US outlook is weakening.”
“There’s going to have to be more stimulus,” he said. “This is where the gold bug view comes in, where sooner or later this is a debasement of the global reserve currency. So you go into gold.”
There are decisive implications flowing from the weakening position of the US. The role of the dollar as the world currency and the decisive importance of US financial markets for every major corporation provide US imperialism with enormous power as it pursues its geostrategic interests.
For example, it is the reason it has been able to impose sanctions against Iran despite opposition from Europe, by threatening to exclude companies that break them from the global flow of finance, or to hit companies backing the Nord Stream 2 pipeline project to transport gas from Russia to Germany.
In response to the deepening crisis of its financial system, triggered and accelerated by the COVID-19 pandemic but not caused by it—the underlying tendencies were already well advanced before the virus struck—US imperialism is going to intensify attacks on the working class at home while pursuing ever more aggressive measures internationally, including war, as it seeks to maintain its global dominance.
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Concerns mount over financial stability as US dollar falls and gold price soars
[28 July 2020]
Families fight for justice for five workers killed by wall collapse at UK Hawkeswood Metal recycling plant
https://www.wsws.org/en/articles/2020/08/03/shre-a03.html
By Tony Robson
3 August 2020
The families of five workers, killed four years ago at Hawkeswood Metal recycling in Birmingham when a wall collapsed in its storage yard, are still fighting for compensation and for the company to face criminal prosecution.
On July 7, 2016, five men, employed as agency staff on zero-hour contracts, were buried under the debris of a collapsed concrete wall and metal in the storage yard of the recycling centre in the Nechells area of Birmingham, owned by ShredMet Ltd.
Ingots of scrap metal had been stored in the adjacent bay, piled at double the recommended height. The wall consisted of interlocking concrete blocks without any mortar and had no foundation. It had been loaded on one side with 263 tonnes of metal, resulting in a collapse bringing the metal and concrete crashing down on the workers cleaning a storage bay.
All the victims died of blunt force injuries. The combined weight of the metal and concrete was the equivalent of 15 double decker buses. The work of retrieving the bodies from the wreckage took the emergency services several days.
Four of the men were from Gambia—Almamo Jammeh, 45, Bangally Dukuray 55, Saibo Sillah,42 and Muhamadou Jagana, 49. The fifth was from Senegal, Ousmane Diaby, 39. A sixth man from Gambia, Tombong Conteh, was the only survivor. He sustained a major injury to his leg, which has restricted his mobility ever since and has been unable to work.
The men came to the UK as Spanish nationals after they were no longer able to find regular employment in Spain. Birmingham is home to a community of around 10,000 from Gambia. For their work at the recycling centre the men received just over the minimum wage and from this meagre pay they sent remittances home to their families. According to one estimate in 2017, a fifth of Gambia’s GDP consisted of such remittances.
To this day, the bereaved families have not even received interim compensation from the company, adding financial hardship to the grief of losing their loved ones.
The inquest into the fatal workplace incident held in November 2018 came to a verdict of accidental death, even though the wall collapse was described as a “foreseeable risk”. The jury found that the risk had not been identified and it “caused or contributed to” the loss of life of each of the men.
Health and Safety Executive (HSE) investigator Paul Cooper stated categorically that the risk of the wall collapse could have been identified and it would have in fact been “common sense”. The inquest also heard from the health and safety officer employed by the company that he had no knowledge of the wall, what its purpose was and how long it had been there. It had not been risk assessed and neither had the activities concerning clearing out the bays by workers in its vicinity.
The HSE, which has been in charge of the criminal investigation, has failed to bring charges against ShredMet Ltd. It has reneged on its commitment to announce its decision on whether to prosecute by the time of the fourth anniversary of the fatal incident.
ShredMet Ltd had been found guilty of health and safety violations at the site prior to the wall collapse, the biggest loss of life at a recycling plant in the UK. In 2012, the company was fined £50,000 in relation to a worker whose arm became trapped in machinery. The HSE did not conduct any subsequent inspections.
In February 2016, there was a large fire at the site after 100 tonnes of shredded scrap metal went up in flames. The waste and recycling industry is one of the most dangerous sectors to work in the UK, with 16 times more fatalities in 2017/18 than the average across all industry, according to the HSE.
The bereaved families decided to mark the fourth anniversary with a public protest outside the recycling plant. A statement issued by the families explains:
“On 7 July 2020, it will be the fourth anniversary of the deaths of our husbands and the fathers of our children. The anniversary should be a day to remember our husbands and to reflect on our loss with our families. This will not be possible as we continue to have justice and accountability for the deaths of our loved ones denied; we remain without any compensation and we are made to wait longer for a decision as to whether those responsible will be held to account. We cannot grieve and move on.
“Instead, we will mark the anniversary of their deaths by holding a public protest outside the gates of Shredmet recycling centre, where our husbands were killed.”
In reference to the failure of the HSE to bring charges it continues:
“We cannot understand the delay as it is obvious that the company failed to protect our loved ones. The Inquest, which was held two years ago, showed the inexcusable and gross failings of the company which led to the deaths of our loved ones on 7 July 2016.
“This delay cannot be allowed to continue. We hope that our protest will show that we have not forgotten what happened, and we will not allow society to forget. We demand recognition for what happened to our husbands.”
In their fight for justice, the families have had to wage a struggle with the support mainly from their friends, local community, and public appeals. Two crowd funding appeals raised thousands of pounds towards funeral expenses and other support to the families, as well as legal costs. This struggle has been waged independently of the Labour Party and trade unions, who must take primary responsibility for the isolation of the brave resistance they have shown.
Labour MP for Ladywood, Shabana Mahmoud, has gone no further than issuing pro forma letters of protest to the government and HSE, which she acknowledges have produced zero results.
The Labour Party and trade unions are preoccupied with supporting the Johnson government’s homicidal return to work policy under conditions of a resurgence of the pandemic. They are prepared to prop up a government responsible for the highest number of COVID-19 deaths in Europe and has transformed workplaces across the country into a breeding ground for the virus, in which workers have been denied protection and live with the constant fear of infection and death.
The Socialist Equality Party calls on all workers to support the fight of the families of the five workers killed at the Hawkswood recycling plant, as part of a broader struggle to end the corporate criminality which is being intensified by the pandemic, based upon the calculation that workers lives are expendable but wealth accumulation is sacrosanct.
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