Britain: ruling class in crisis – our modern day Ancien Régime

The mood amongst ordinary people is rapidly shifting as the Tory government lurches from scandal to crisis. The widening class divide in society is being exposed by events, preparing the way for revolutionary explosions.

“It was all this hatred, coming to a head after long years as the selfishness of the rich became more and more apparent,” wrote P.A. Kropotkin about the mood on the eve of the French Revolution.

At its core, the key question in France at the end of the 18th century was who was going to pay for the national debt, which had risen astronomically. Certainly not the nobles, clergy or the rich. The French people had to pay! But they had other ideas.

“The people still declare that they will pay nothing, neither taxes, nor dues, nor debts”, stated a report from the governors. It was this that provoked the revolution.

Today, the British budget deficit and national debt are rising relentlessly. But who is going to pay? Certainly not the rich and privileged. The British working class must pay!
Austerity on the cards

The ruling class and their political representatives are preparing plans for a new wave of austerity, the likes of which we have never seen. Of course, these plans are kept under wraps for the moment. But there will come a time when they will announce TINA: There is no alternative!

Smooth-talking Rishi Sunak, the Tory Chancellor, has made it plain that there will be no further handouts. “It’s wrong to keep people trapped in a situation and pretend there is a job they can go back to”, he recently told the BBC.


Bank of England governor Andrew Bailey also made a similar point. “I don’t think we should be locking the economy down in a state that it pre-existed in.”

In other words, unemployment is going to rise dramatically and living standards are about to collapse for millions.

But the Tories face grave dangers in imposing further austerity, as the French monarchy found out in 1789.

As then, public anger is already rising. The shine has rapidly worn off from the Tory government and Boris Johnson. The veneer of ‘national unity’ in face of the pandemic has quickly dissolved. There is little, if any, trust in the government or politicians. Social divisions are again on the increase.
Mood shifts

A number of new surveys show that the public mood has rapidly changed already. In particular, the hypocrisy exposed over Dominic Cummings’ trip to Durham was a significant turning point, according to a report by the British Future think tank.

This scandal clearly showed that there was one rule for the government and their hangers-on, and another for the rest of us. The widening divisions between rich and poor are also a growing concern.

In answer to the question ‘Is the country now more divided?’, one respondent said: “More divided, two reasons. The first is the Dominic Cummings saga. The vast majority of people see it as one rule for those in charge and one rule for everyone else…Others are…worried about government advice and whether to trust them.”

“In short: undoubtedly more divided”, explained a further respondent. “More detail: it was relatively easy to persuade the country to go into lockdown. Easing the restrictions has produced a whole spectrum of differing opinions, never mind the uproar the Dominic Cummings saga has added to the debate.”

The British Future report stated that: “The perception that the prime minister’s adviser, Dominic Cummings, had broken the lockdown rules was a highly salient issue that appeared to damage trust in politicians.”

It warned that tensions could re-emerge in the coming recession over issues such as the gap between rich and poor. “That sense of togetherness is starting to fray”, said the report’s author, Jill Rutter.
Class divides

There is now plenty of talk about ‘the next stage of the crisis’, which is looming. In the foreword to the aforementioned report, the Bishop of Leeds, Nick Baines, wrote:


“We are entering a period of deep economic uncertainty, one that will heighten existing inequalities and strain our society further still.

“We must start to disagree better: Recognising and respecting our differences while remembering our common humanity and citizenship, with all the mutual obligations these demand of us.”

But these sickly-sweet words from the bishop are an attempt to save the capitalists and their system, by stressing “our” society and “our” obligations – as if we were all in the same boat. But we are not.

Britain, as elsewhere, is a deeply divided class society. The ruling class – who hold the reins of power – have never been so rich and divorced from the rest of us. They live on a completely different planet.

The overwhelming majority of people in society are working class, living from pay-cheque to pay-cheque. The capitalist class live by systematically exploiting the working class. Their wealth – their accumulated profits – are parasitically obtained from the unpaid labour of the working class.

The only “obligation” that the capitalists have is to make money. Our “obligation” is to earn a living. But the capitalist system is in deep crisis and can’t even provide us with a living. Millions are about to lose their jobs. The ruling class will demand that the workers – and not them – pay for the crisis through cuts and austerity.

The mood of anger will certainly increase as the impact of the crisis bites. This experience will turn millions against the capitalist system. In the process, as in France 1789, revolution will be placed on the agenda in one country after another, including in Britain.
Battles ahead

We have to prepare for what is coming.

Things will not develop in a smooth process. We are in a period of sharp turns and sudden changes. Consciousness – which tends to lag behind – will catch up with a bang. All the old illusions will be burnt away by the white heat of events.

We have to fight for a socialist programme to answer the crisis; for a programme that will do away with capitalism. No half-measures will suffice.

Only by taking over the 100-or-so giant monopolies that dominate the economy can we plan the economy in the interests of the majority, and not for the profits of the few. This must include the banks and big financial companies, along with the other ‘commanding heights’ and major industries, run under workers’ control and management.

To achieve this, we need to build up the forces of Marxism – a determined, militant leadership – for the battles that lie ahead. In this spirit, we urge you to join us in the fight to change society!




Originally published 13 August at socialist.net |

Did Americans Want A Political Revolution?

Sanders frankly admitted that struggle is required to face down crises. By contrast, Biden promised an easy path back to a mythical normal. Democrats rejected the honesty and picked the fantasy.


David Sirota
Aug 18




Editor’s note: This essay below about the 2020 Democratic primary just came out in the new print edition of Jacobin magazine, where I am an editor at large. The piece draws on my work Bernie Sanders’ presidential campaign speechwriter. In solidarity with the ongoing work of this newsletter, Jacobin is providing this special coupon exclusively for TMI subscribers to get a discount on an online and/or print subscription to the magazine. Click here to get the discount. I’m a huge fan of the magazine and hope you’ll consider subscribing. - Sirota



At this point, the autopsy process has almost run its course — most of the postmortems about the 2020 Democratic primary have been written, and the sniping, mocking, and football-spiking is dying down on social media. If there is any lasting political lesson from the yearlong race, it is probably a simple and boring one: former vice presidents are tough candidates to defeat in nominating contests.

Still, the primary does leave open a question — one that has nothing to do with ideology and everything to do with honesty.

Can elections be won by telling Americans the truth about what we must do to survive the crises threatening our survival?

The contrast between Senator Bernie Sanders, for whom I was a senior adviser and speechwriter, and former vice president Joe Biden was muted by the two candidates’ personal affinity for each other. While their disputes on specific issues occasionally took center stage, they were most often in the background (and they were further muddled by Biden lying about the basic facts of his own conservative record).

And yet there was a huge difference in visions that did define the race.

Sanders told America that if he won the White House, it would not be the end of the battle — it would be the beginning of a protracted war to defeat the elite and transform US society. He leveled with the country by acknowledging that taxes would have to go up and systems would have to be rebuilt or built from scratch. But he went further than merely challenging our conception of policy — he asked America to think beyond its psychological affinity for the path of least resistance. He told us that there is no easy path to attaining the kinds of policies that are necessary to save millions of lives as well as our democracy.

“This struggle is not just about defeating Donald Trump — this struggle is about taking on the incredibly powerful institutions that control the economic and political life of this country,” he said in the speech launching his campaign. “I’m talking about Wall Street, the insurance companies, the drug companies, the military-industrial complex, the prison-industrial complex, the fossil fuel industry, and a corrupt campaign finance system that enables billionaires to buy elections. Brothers and sisters: we have an enormous amount of work in front of us.”

Biden told America the opposite story. Evoking Warren G. Harding’s famed “return to normalcy” theme, he insisted that there is an easy path. The former vice president essentially argued that Donald Trump is the singular problem in the United States, and that once Trump is defeated, the battle is over — we can restore stability and go back to the kind of incrementalism that has defined Democratic presidencies for more than forty years.

“I believe history will look back on four years of this president and all he embraces as an aberrant moment in time,” Biden said at the beginning of his primary campaign, and a year later, he capped off that primary run by telling NBC News that “Americans aren’t looking for revolution.”

In the interim, Biden’s campaign spent months telling voters that we can solve climate change with a “middle ground” policy, we can solve the health care crisis with an incremental public option and we can solve economic inequality even if we make sure that “nothing would fundamentally change” for billionaires.

If the Sanders-Biden battle was perceived as a choice between Sanders’s daunting promise of an exhausting revolutionary struggle and Biden’s promise of a glide path back to normal, then it’s no mystery why Biden ultimately prevailed. Easy street was an understandably alluring vision for an electorate already tired out by Trump’s never-ending conflicts and controversies.

In reality, though, this was not a choice between two possibilities — it was a choice between honesty and fantasy, and Democratic voters picked the latter.

That’s a problem, because Sanders was giving voice to truths that we cannot keep avoiding, omitting, or rejecting at the ballot box if we hope to survive the disasters engulfing our society.

The fossil fuel industry isn’t going to voluntarily stop exacerbating the climate crisis. The health care industry isn’t going to voluntarily stop profiting off sickness. The private prison industry and the police are not going to voluntarily stop fortifying an inhumane and racist criminal justice system. Billionaires and corporations are not going to voluntarily stop using an army of lobbyists to rig the tax system for the wealthy, and they are not going to voluntarily stop exploiting a system of legalized bribery to buy our elections.

Fixing our country and our world will require transformational policies — or, as Sanders calls it, a “political revolution.” And yes — enacting those policies will require exactly the kind of struggle that Sanders envisioned and earnestly acknowledged during the Democratic primary. Those crises will not just go away or get better by replacing Trump with a Democratic president who prioritizes comity, decorum, and incrementalism over struggle, conflict, and radical change.

But can candidates win office while admitting that?

In every contested primary, progressives will inevitably face Joe Bidens — corporate-backed moderates who reassure us that there is no need for a slog, who tell us a fantastical and inspiring tale about how we can fix the country through half measures, bipartisanship, and polite requests for national unity.

In the face of that appealing sales pitch, can progressive candidates up and down the ballot win power while leveling with voters about how hard it will be to actually save our country and the planet?

On that score, the results of the 2020 Democratic primary were not a hopeful sign. However, reality may finally be overwhelming the power of fantasy.

Since Biden became the presumptive nominee, more than 167,000 Americans have died in a lethal pandemic, and millions have lost their existing health care coverage — all as the economy has continued to enrich billionaires. At the same time, an explosion of police violence and mass protest has spotlighted the bigotry and inequality tearing apart the social fabric of communities across the country. Meanwhile, the climate crisis helped create a 100 degree day in the Arctic Circle.

In light of these emergencies, politicians face an altered political topography. They risk looking tone-deaf if they try to pretend that the panacea is some easy half measure or singular electoral victory. The converse is also true — candidates may end up seeming more authentic and electable by fessing up to impending cataclysms and echoing the call for the kind of struggle that will be necessary to rescue ourselves.

In short, events occurring outside of the political arena in the terrestrial world — in the streets, hospitals, schools, and communities we live in — are intervening to change elections in a way that could make honesty a winning strategy.

If that shift continues, it will be unfolding at too late a moment to put Sanders in the White House — but if we are lucky, it will happen in time to save the world.

PROTECT THE VOTE AND END PRIVATIZATION OF THE POSTAL SERVICE

https://popularresistance.org/protect-vote-end-privatization-usps/

By Margaret Flowers and Kevin Zeese, Popular Resistance.August 16, 2020
| , NEWSLETTER



As we warned earlier in the year, the US Postal Service is failing due to a long term effort to weaken it plus the confluence of the COVID-19 pandemic, recession and intentional efforts by the Trump administration to suppress the vote.

Members of Congress and state leaders are starting to take notice because of the magnitude of the crisis and public outcry, particularly over valid concerns that mail-in voting will be disrupted. Now is the time to not only protect the vote but to end privatization and selling off of the US Postal Service and expand it as a critical public institution that provides high-quality jobs and services to all communities, rich and poor, urban and rural, across the country.


March in 2014 to save the Post Office.

The Long Push to Dismantle and Privatize the Post Office

The Post Office is mandated in the Constitution (Article 1, Section 8, Clause 7). It is a critical service and a public good that has been provided to all people. With the passage of the 1981 budget, the US Postal Service was required to be self-funded from its revenues alone without support through taxes, which it was able to achieve until the pandemic. In fact, for more than 200 years, it has been solvent despite being the target of big banks and profiteers.

Ellen Brown describes the long history of the plan to dismantle and privatize the US Postal Service (USPS) going back to 1910 when the Postal Savings Bank Act was passed to provide a safer alternative for people after the banking crash of 1907. The big banks were upset by the competition from a postal bank. In 1966, the postal banks were dismantled after a series of laws were passed, beginning in the New Deal Era, which strengthened the private banks and gave them an advantage over postal banks.

Profiteers searching for more public entities to loot, as they have done with water, education, healthcare, and more have long viewed the Post Office as a fertile field for making money if they could weaken it enough so it would fail. A serious step in this direction was taken in 2006 with the so-called ‘Postal Accountability and Enhancement Act‘ (PAEA).

The PAEA was sponsored by two Republicans and two Democrats. It passed in the House with the full support of the Democrats (including Congressman Bernie Sanders, one Democrat abstained). Most of the Republicans supported it; twenty voted against it. It then went to the Senate where it passed with unanimous consent (a procedure used when Senators do not want to be held accountable for their vote).

A requirement of the PAEA is that the Postal Service must pre-fund all of its retirement funds including health benefits for the next 75 years (for people who have not been born yet). No business is required to go to this extreme and two-thirds of Fortune 1,000 businesses don’t pre-fund retirement at all. This costs the USPS over $5.5 billion each year. It is a way to “fatten the cow” for its eventual sell-off to private corporations.

One of the first impacts of the PAEA was that 65,000 postal workers lost their jobs in 2009. The USPS is one of the largest employers of African Americans in the US. This continued throughout the Obama administration as almost half of the postal processing plants were shuttered, local post offices had their hours reduced by 25 to 75% and 3,700 post offices were closed. The move to end Saturday mail delivery was attempted and stopped. A total of 150,000 postal workers lost their jobs under Obama and those who remained had their wages cut.

Under Obama, mail sorting and trucking were sub-contracted to private entities that pay their workers less. Activists began to protest in 2013 by delivering petitions and occupying post offices. In Berkeley, CA, people occupied the main post office for 33 days to prevent the historic New Deal Era building from being sold. This was part of a year-long successful campaign that gained tremendous public support, media attention, and support by local and state elected officials.

In 2015, A Grand Alliance to Save the Post Office, created by the four postal worker unions and other organizations, including Popular Resistance, formed under the leadership of APWU President Mark Dimondstein (Listen to our interview with him on Clearing the FOG in April). The Alliance lobbied Congress to repeal the 2006 PAEA and to stop the sell-off to private corporations.

The Alliance successfully organized to stop Staples from being allowed to provide USPS services. The campaign used protests outside Staples’ stores, a boycott of Staples, and a complaint filed with the National Labor Relations Board. A judge ruled in favor of the USPS in November of 2016 and Staples was ordered to shut down its postal services by March 2017. If Staples had been allowed to continue, it would have led to the closing of more post offices and the loss of more jobs.


Mailboxes being removed in Oregon.

The Future of the Post Office is Uncertain

The US Postal Service has continued to face the same struggles throughout the Trump administration. Despite a majority in the House and enough Senators to have power over the passage of any legislation in the Senate, the Democrats did not take steps to save the post office until it threatened their re-election in 2020.

The COVID-19 pandemic and recession created an emergency situation for the Post Office. The closing of businesses and record bankruptcies has meant a sharp decline in the quantity of mail. Postmaster General Megan Brennan started putting out the warning early in the year that the situation is dire and that the USPS could run out of funds during the summer. The Postal Service board of governors asked Congress for a $75 billion rescue package that would provide $25 billion in immediate funds and the rest as credit and financing for modernization projects.

Instead, the CARES Act, passed in late March, provided a measly $10 billion, which has been held up by the Trump administration and used to pressure the board of governors to elect Louis DeJoy as the new Postmaster General in June. On March 30, President Trump said on FOX if there was a high voter turnout “you’d never have a Republican elected in this country again.” Trump was explaining why he opposed more money being spent to help states conduct the 2020 election during the pandemic.

The Democrats offered $25 billion in aid and relief of the yearly $5.5 billion in retirement funds in their House version of the bill but did not use their power in the Senate to demand relief for the USPS. Meanwhile, Amazon received tens of millions of dollars in support of its private delivery providers through the Payroll Protection Program for small businesses.

A new Institute for Policy Studies report found that when cuts are made to the USPS, it is rural communities that are hit the hardest. Rural residents rely on the postal service for medication deliveries, bill paying (because they often do not have internet access), and voting (because many don’t have polling places). Private delivery companies like Amazon and FedEx won’t deliver to rural areas and use the USPS to do it for them instead.

Under the new Postmaster General DeJoy, changes have been made that are slowing down mail service and delaying the delivery of medications and other necessities. Almost 700 mail sorting machines were removed and people showed photos on social media of blue mail receptacles being taken away in trucks. On Friday night, top executives in the Postal Service were fired or reassigned. This sparked a large ‘noise demonstration‘ early Saturday morning outside Louis DeJoy’s home in Washington, DC.

President Trump made it clear last week that his actions are intended to suppress the vote in the November election. There is a large push for universal mail-in voting because of the pandemic. People are reluctant to vote in person and states are having trouble finding people willing to work the polls. Although President Trump requested an absentee ballot for himself in Florida, he said that mail-in voting is subject to fraud and can only be trusted in Republican states. He denied a request for emergency aid for universal mail-in voting saying, “They want $3.5bn for something that will turn out to be fraudulent. That’s election money, basically.”

States are reporting that they’ve received letters from the Postal Service saying they will not be able to handle the influx of mail-in ballots in a timely manner. AP News reports 46 states plus Washington, DC are impacted by this and millions of voters will be disenfranchised if action is not taken.

This has gotten the Democrat’s attention and they are now planning to hold an emergency meeting on Monday. They have also scheduled a hearing for when they return to work in September to bring Louis DeJoy in for questioning. Some members of Congress are calling for DeJoy to resign.


Protest outside Louis DeJoy’s house in Washington, DC.

Fight Back

It is important to acknowledge that while lawmakers are upset now with the attack on the US Postal Service, this is likely because it is an election year. The Post Office is the most popular government institution so this stance is not only favorable to voters but it also protects the election. Both major parties are responsible for the situation that exists today and, after the election, they will likely return to their previous apathetic positions.

Saving the post office requires a popular movement with a vision of what needs to happen and mobilization to support that vision. The protest at DeJoy’s house was a good one, but it is the bipartisan Postal Service board of governors who have the power to remove Dejoy and Congress that has the power to provide financial support.

The steps that are required to save the US Postal Service over the short term include:
Immediate appropriation and release of $75 billion in pandemic relief funds and credit.
Provision of funds for universal mail-in voting.
Repeal of the 2006 PAEA requirement to pre-fund 75 years of retirement benefits (in fact if those funds are allowed to be used by the USPS, it likely won’t need the pandemic relief).

Then, over the longer term, steps include:
Reopening and modernizing postal offices, especially in rural areas, and reinstating normal operating hours.
Rehiring postal workers at all levels and providing pay increases.
Prohibiting private contracting of postal services and policies that give advantages to private corporations such as Amazon, FedEx and UPS.
Expanding postal services to include more financial services, especially for the 28% of people who are underserved by banks.
The return of the Postal Savings Bank to provide direct banking services, including loans, throughout the country.

We wrote about future possibilities for the USPS in 2013, “Don’t Shrink the US Postal Service; Expand it.”

A Grand Alliance to Save the Postal Service is holding a meeting on Tuesday that we will attend and report back actions. For now, you can join the US Mail Not for Sale campaign here. And you can contact your members of Congress (look up their websites) and the members of the USPS board of governors, see below:

Calls For Nationwide Sickout As Arizona School District Cancels Reopening

Arizona public school district forced to abandon plans after more than 100 teachers and staff members called in sick


August 16, 2020 Lois Beckett THE GUARDIAN

https://portside.org/2020-08-16/calls-nationwide-sickout-arizona-school-district-cancels-reopening

An Arizona public school district was forced to cancel its plans to reopen on Monday after more than 100 teachers and other staff members called in sick.

“We have received an overwhelming response from staff indicating that they do not feel safe returning to classrooms with students,” Gregory Wyman, district superintendent, said in a statement on Friday.

Now some activists in Arizona, which saw a high-profile teachers’ strike in 2018, said they hope teachers across America will adopt a similar strategy to keep educators safe, as some parents and politicians continue to push for schools in the US to reopen during the coronavirus pandemic.

“I’d love to see a nationwide sickout,” Kelley Fisher, an Arizona kindergarten teacher who has led protests in the state, told Reuters on Friday.

In San Tan Valley, a suburb of Phoenix, the JO Combs unified school district’s board of governors had voted to resume in-person classes on Monday. Another school district nearby had made a similar choice, pressured by some parents who argued that reopening schools would be best for their children.

The president of the Arizona Education Association, a teacher’s union, told the Arizona Republic that the two districts both decided to reopen despite not meeting the health metrics as recommended by Arizona’s department of public health.

Not a single district in Arizona currently meets all three metrics for a safe resumption of mixed in-person and online learning, the Arizona Republic reported, citing the most recently available state public health data.

By late Friday afternoon, 109 teachers and other staff members from JO Combs had already called in sick, a district spokeswoman said. That number represents nearly 20% of the district’s total staff of about 600.

“Due to these insufficient staffing levels, schools will not be able to reopen on Monday as planned,” Wyman, the superintendent, said, noting that “all classes, including virtual learning, will be canceled” until further notice.

Debates over when or how to reopen schools for in-person instruction have flared across the US. In Arizona, even as teachers are protesting to delay reopening schools, citing safety concerns, some parents have rallied to open classrooms, arguing that choice is best for their children.

Hundreds of parents and students held a rally in Phoenix last week in support of resuming in-person classes, Reuters reported. Among them was parent Christina DeRouchey, whose son is in first grade.

“We just want the choice that is best physically, mentally and most importantly emotionally for our children,” DeRouchey said.

Elsewhere in Arizona, the debate over when to reopen schools remained at a standstill. In Lake Havasu, Arizona, the local school district pushed back the discussion of when to reopen schools to this coming week, the local paper reported.

“At some point, we are going to have to come up with an acceptable casualty rate, and nobody wants to have that conversation,” one school board member said during last week’s discussion over reopening schools, a comment the editor of Today’s News-Herald, the local paper, called “chilling”.
America faces an epic choice ...

... in the coming months, and the results will define the country for a generation. These are perilous times. Over the last three years, much of what the Guardian holds dear has been threatened – democracy, civility, truth.

The country is at a crossroads. Science is in a battle with conjecture and instinct to determine policy in the middle of a pandemic. At the same time, the US is reckoning with centuries of racial injustice – as the White House stokes division along racial lines. At a time like this, an independent news organisation that fights for truth and holds power to account is not just optional. It is essential.

Like many news organizations, the Guardian has been significantly impacted by the pandemic. We rely to an ever greater extent on our readers, both for the moral force to continue doing journalism at a time like this and for the financial strength to facilitate that reporting.

We believe every one of us deserves equal access to fact-based news and analysis. We’ve decided to keep Guardian journalism free for all readers, regardless of where they live or what they can afford to pay. This is made possible thanks to the support we receive from readers across America in all 50 states.

The Deceptive Trump, UAE-Israel ‘Peace Deal’

Among the most brutal realities for Palestinians is loss of support from Arab states, who pay lip service to their own populations, while drawing closer to Israel with economic interests and Iran in mind.

August 16, 2020 Medea Benjamin, Ariel Gold (Consortium News) Jennifer Hansler, Richard Roth

https://portside.org/2020-08-16/deceptive-trump-uae-israel-peace-deal

The Deceptive Trump, UAE-Israel ‘Peace Deal’

Medea Benjamin, Ariel Gold
August 14, 2020
Consortium News
https://consortiumnews.com/2020/08/14/the-deceptive-trump-uae-israel-peace-deal/

Huge breakthrough today,” crowed Donald Trump on twitter as he announced the new peace deal between Israel and the United Arab Emirates (UAE). The deal makes the UAE the first Gulf Arab state and the third Arab nation, after Egypt and Jordan, to have diplomatic ties with Israel. But the new Israel-UAE partnership should fool no one.

Though it will supposedly stave off Israeli annexation of the West Bank and encourage tourism and trade between both countries, in reality, it is nothing more than a scheme to give an Arab stamp of approval to Israel’s status quo of land theft, home demolitions, arbitrary extrajudicial killings, apartheid laws, and other abuses of Palestinian rights.

The deal should be seen in the context of over three years of Trump administration policies that have tightened Israel’s grip on the Palestinians: moving the U.S. embassy from Tel Aviv to Jerusalem, recognizing the Golan Heights as Israeli territory, and creating a so-called peace plan with no Palestinian participation or input.

While no U.S. administration has successfully brokered a resolution to Israel’s now 53-year-long occupation, the Trump years have been especially detrimental to the Palestinian cause. Palestinian leader Hanan Ashrawi wrote on Twitter that with this deal, “Israel got rewarded for not declaring openly what it’s been doing to Palestine illegally & persistently since the beginning of the occupation.”

Indeed, with Donald Trump at the helm and son-in-law Jared Kushner as the primary strategist, even concessions for Palestinians have been done away with. To add insult to injury, while the deal had been couched in terms of a commitment by Israel to suspend annexation of Palestinian territories, in his Israeli press conference announcing the deal, Netanyahu said annexation was “still on the table” and that it was something he is “committed to.”


UAE in ‘Enemy Camp’

Among the most brutal aspects of this period for Palestinians have been the loss of support for their cause in neighboring Arab states. The Arab political party in Israel, Balad, said that by signing this pact, “the UAE has officially joined Israel against Palestine, and placed itself in the camp of the enemies of the Palestinian people.”

The UAE has previously held a position consistent with public opinion in Gulf and Middle East countries that the acceptance of formal diplomatic relations with Israel should only take place in exchange for a just peace and in accordance with international law. Back in June, Emirati ambassador to the U.S. Yousef al-Otaiba penned an an op-ed in the Yediot Ahronot newspaper, the Israeli equivalent to USA Today, appealing directly in Hebrew for Israel not to annex the West Bank.

However, by working out an agreement with Trump and Netanyahu to normalize relations, the country has now made itself Israel’s partner in cementing de facto annexation and ongoing apartheid.

The UAE’s change from supporting Palestinian dignity and freedom to supporting Israel’s never-ending occupation is a calculated move by UAE Crown Prince Mohammed bin Zayed, a shrewd Middle East dictator who uses his country’s military and financial resources to thwart moves towards democracy and respect for human rights under the guise of fighting Islamic terrorism. His support for Israel cements his relationship with the Trump administration.

Trump has already gone out of his way to push billions of dollars in arms sales to the UAE, despite opposition from Congress because of high number of civilian casualties associated with the use of those weapons in Yemen.

Secretary of State Mike Pompeo has also defended the UAE from credible reports that U.S. weapons sold to the UAE have been transferred in Yemen to groups linked to Al Qaeda, hardline Salafi militias and Yemeni separatists. The UAE was also stung by revelations of secret prisons it had been operating in Yemen where prisoners were subjected to horrific forms of torture, including “the grill,” where victims were “tied to a spit like a roast and spun in a circle of fire.”

In Libya, the UAE has been criticized for violating a 2011 UN Security Council arms embargo by supplying combat equipment to the LAAF, the armed group commanded by General Khalifa Haftar with a well-established record of human right abuses. So this deal with Israel gives the UAE a much-needed veneer of respectability.


But it is impossible to understand the impetus for this deal without putting it in the context of the ongoing hostilities between all three countries and Iran. Following the old adage that “the enemy of my enemy is my friend,” in recent years Israel has been negotiating with various Gulf states, including the UAE, to push back against Iran’s growing influence in the region.

As the communique announcing the Israeli-UAE deal asserted, the U.S., Israel and the UAE “share a similar outlook regarding threats in the region.” This dovetails with Trump’s anti-Iran obsession, which includes withdrawal from the Iran nuclear deal and his “maximum pressure” campaign designed to force Iran back to the negotiating table to make a “better deal.”

In announcing the UAE-Israeli pact, Trump declared with ridiculous bravado that if he wins the elections, he’ll have a new deal with Iran within 30 days. Anyone who believes this must be almost as delusional as Trump.

Biden Boasts

The fact that this agreement between two Middle East countries was first announced thousands of miles away in Washington DC shows how it is more about shoring up Trump’s slumping electoral campaign and improving Netanyahu’s battered image in Israel than bringing peace to the Middle East. It also shows that Netanyahu and bin Zayed have a stake in seeing Trump win a second term in the White House.

Instead of pointing out the hollowness of the pact, Joe Biden’s response was unfortunately to congratulate Israel and the UAE and try to take credit for the deal. “I personally spent time with leaders of both Israel and the U.A.E. during our administration, building the case for cooperation and broader engagement,” he said. “I am gratified by today’s announcement.”

The normalization of relations between the UAE and Israel, facilitated by the U.S., serves to prop up three repressive leaders — Trump, Netanyahu, and bin Zayed — and will cause further harm to Palestinians. It is both a shame and a sham.

Making Billions v Making Ends Meet: How the Pandemic Has Split the US Economy in Two

US billionaires’ wealth is soaring while millions remain unemployed, creating a country with two economies and increased inequality

August 16, 2020 Dominic Rushe THE GUARDIAN

https://portside.org/2020-08-16/making-billions-v-making-ends-meet-how-pandemic-has-split-us-economy-two

It’s only a hundred miles from Manhattan to East Hampton but as the city swelters the Long Island town can seem a world away. Cool Atlantic breezes take the heat off long summer days spent on its miles of white, soft sand beaches. High-priced farm stands provide heirloom tomatoes, peaches and arugula to summer visitors and the mansions of the financial titans and the celebrities, including Beyoncé and Jay-Z, Julianne Moore and Robert Downey Jr, who summer there.

Nor does the coronavirus pandemic seem to have dampened the 1%’s enthusiasm for the Hamptons.

If anything, quite the opposite. House prices are soaring. High-priced rentals have all been snapped up. It took developer Joe Farrell just one day to rent Sandcastle, his 15-bedroom mansion with sunken tennis courts, for $2m for the summer to “a textile tycoon and his family who were stuck in Manhattan and wanted to leave the city on a day’s notice. This was a Covid situation – not a normal summer rental”, he told the New York Post.

The Hamptons really is a world away for Sara Fearrington. It may as well be another planet. The 43-year-old lost her job at Waffle House in Durham, North Carolina, when the pandemic struck. Now she, her husband and their six children are trying to make ends meet on $125 in unemployment benefits each week. Fearrington is one of the 2.6 million people to have lost her job in the food services and drinking industry since February.

The Fearringtons had been receiving an extra $600 a week in benefits thanks to an emergency lifeline set up by Congress in March. That expired at the end of July and Washington is deadlocked over a replacement. “Now we literally have to sit here and wait, your head on a chopping block,” she said.

Once again coronavirus has shown that it is far more deadly for those suffering from pre-existing conditions. For the US body politic that pre-existing condition is inequality.

Stock markets are setting new highs driven by soaring prices for the tech companies that enable those lucky enough to work from home. Apple is close to being valued at $2tn. The total wealth of US billionaires has soared $685bn since the middle of March to a combined $3.65tn. Rock-bottom interest rates have triggered a home sales boom for some as those with the money reconsider their priorities in the work-from-home era. With nowhere to go, those Americans who can are saving at record rates.

But only one in four Americans can work from home. Meanwhile roughly 30 million people are unemployed in the US, about 20% of the workforce. Almost 30 million Americans recently reported that they have not had enough to eat at some point in the previous seven days, according to the Census Bureau. The vast majority – about 26 million – had lower rates of educational attainment.

The recession has also further exposed the racial wealth gap. The job market ticked up again last month but 14.6% of Black and 12.9% of Latinx adults were unemployed in July, versus 9.2% of whites.

“It’s white-collar professionals who are able to work from home. In some ways, this is a sign that the economy is just officially split in two,” Glenn Kelman, chief executive of property company Redfin, told NPR last week.

“We are all in this together” may be the rallying cry for the pandemic but the truth is the poor, and particularly people of color, have been devastated by coronavirus and its attendant recession while the wealthy have weathered it and in some cases made huge gains. Research into previous recent pandemics from economists at the International Monetary Fund suggests it’s a trend that may continue even after the outbreak abates.

Economists often talk of V-shaped economic recoveries, a sharp drop and an equally sharp bounce back. Sometimes the economy drags along the bottom before bouncing back – a U-shaped recovery. Now there is talk of a “K-shaped” recovery. A fall followed by a split where the well off and well educated tick up while the poor and poorly educated fall further behind.

For people able to work from home, “life has returned largely to normal”, said Peter Atwater, adjunct lecturer in the economics department at William & Mary. “In fact, the wealthiest today are even richer than they were before the outbreak.”

For those people, on the arm of the K, Atwater said it’s “almost as if the outbreak never happened. That’s starkly different for people on the leg. If you are a small business person, work in the service industry, had to go back out into a manufacturing facility, a job in the ‘real world’, as it were, that has weighed heavily. Sadly it has weighed particularly heavily on minority communities at a time when they are the largest populations experiencing the outbreak. It’s a stacked inequity.”

In Edgar Allan Poe’s The Masque of the Red Death Prince Prospero and the knights and dames of his court retire to “the deep seclusion of one of his crenellated abbeys” to escape the Red Death, a plague that is devastating the country around them.

Amply provisioned and, so they think, sealed off from the outside world, Prospero and his pod put on a masqued ball but the prince is angered to find that one of the guests has dressed as Red Death.

Prospero chases the guest from room to room, only to realize the figure is the Red Death personified. The guests sicken and die: “And Darkness and Decay and the Red Death held illimitable dominion over all.”

Inequality was a pre-existing condition for the US economy long before the coronavirus started its spread. For Fearrington the pandemic has merely exposed its “ugly face”. But she is certain that if this goes on much longer today’s Prosperos too will see that face.

A Fight for $15 activist campaigning for a rise in the national minimum wage, Fearrington is hopeful that as so many people come to realize how bad the situation has become, something will change. “What we have right now is economic failure,” she said.

“My husband is black. We are a mixed family that is living through this struggle. It is not a fun place to be. I have been with my husband for 28 years. Twenty-eight years and I am still seeing the same problems? No. We have got to speak up. I have had enough.”

She has seen the reports of people snapping up second homes. “I have dreams of that too,” she said. “I am happy for people who have that. I want everybody to prosper. But at the same time I feel left behind. Some of my dreams are now halted.” She said “every little bit of savings” she had stowed away has gone “just to keep our heads above water”.

Even before Covid-19 life was hard for Fearrington. She worked 42-72 hours a week, taking all the shifts she could get. “Every holiday. Every one of my kids’ birthdays, I was working.” Paid $3.15 an hour before tips she could make $40-$70 a day. The family needed every dollar. Medical costs are a constant fear. Her husband has a rare lung disease, ABPA. His inhalers can cost $300. One stay in hospital left the family with a bill for $15,000. “If you get sick, too bad, so sad,” she said.

“We need healthcare for all,” she said. “A lot of things have to change, we need to learn to live together. Just because we fall in a certain pay bracket doesn’t mean our lives are less valuable than anybody else’s.”

The rise of the Black Lives Matter movement, the Fight for $15, #MeToo and Occupy Wall Street are all recent examples of powerful, popular movements demanding real change. The continuing protests across America following the killing of George Floyd and the fact that more white people too are joining those protests gives her hope. “Now is a time when people are recognising that silence has not worked. We are coming together. Ugliness has to stop,” she said.

Without change there will be more outrage, said Atwater. “I don’t think the wealthy appreciate how vulnerable they are to those who are out in the real world. They are not immune to the world around them.”

The US economy is driven by the consumer. About 70% of economic growth is dependent on consumer spending. The longer this slowdown continues, the more likely that drain on growth will creep up the income ladder. The last recession started at the top with Lehman Brothers bankers walking away with boxes of their belongings as the financial crisis bit. It soon trickled down. This may have started in Waffle House but it doesn’t mean it won’t trickle up.

If the current situation continues, “there is a very real risk that companies will start looking at their balance sheets and thinking, ‘Actually, we really need to trim our workforce’, and that could happen across the board. That’s not just confined to leisure and hospitality,” said John Payne, economist at Oxford Economics.

Widening job losses and increasing inequality is likely to lead to louder calls for change.

“We talk about the American dream, the ability to pull yourself up by your bootstraps. Rags to riches. All this American mythology is being challenged by this extraordinary wealth divide,” said Atwater. “The rubber band has been pulled too far. People are uncomfortable with how divided we have become.

“At the same time I don’t think the wealthy appreciate how vulnerable they are to those who are out in the real world. They are not immune to the world around them.”

That realization can’t come soon enough for Fearrington: “It has to stop. We are still all humans at the end of the day,” she said.

Big Pharma’s Covid-19 Profiteers

How the race to develop treatments and a vaccine will create a historic windfall for the industry — and everyone else will pay the price.

August 16, 2020 Matt Taibbi ROLLING STONE

https://portside.org/2020-08-16/big-pharmas-covid-19-profiteers

On June 29th, 2020, while America remained transfixed by anti-police protests, the chairman and CEO of the pharmaceutical company Gilead issued a much-anticipated announcement. In a breezy open letter, Daniel O’Day explained how much his company planned on charging for a course of remdesivir, one of many possible treatments for Covid-19. “In the weeks since we learned of remdesivir’s potential against Covid-19, one topic has attracted more speculation than any other: what price we might set for the medicine,” O’Day wrote, before plunging into a masterpiece of corporate doublespeak.

The CEO noted a study by the National Institute of Allergy and Infectious Diseases, a division of the National Institutes of Health, showing that Covid-19 patients taking remdesivir recovered after 11 days, compared with 15 days for placebo takers. In the U.S., he wrote, “earlier hospital discharge would result in hospital savings of approximately $12,000 per patient.”

The hilarious implication seemed to be that by shortening hospital stays by four days on average, remdesivir was worth $48,000 a dose. That O’Day might come to such a conclusion was not outlandish. Gilead became infamous a few years ago for charging $84,000 per course of treatment for Sovaldi, a “groundbreaking” hepatitis-C drug. The company’s policies for pricing have more than once prompted congressional hearings, as in the case of Truvada, a drug to combat HIV transmission that was developed in part with the aid of government grants and that earned Gilead more than $30 billion in revenue. Would they try something similar at a time of unprecedented medical terror with one of the few available Covid-19 treatments?

No, as it turned out. Although “we can see the value that remdesivir provides” — i.e., we could have charged $48,000 per dose — Day wrote, “we have decided to price remdesivir well below this value.” He went on to say that to “ensure broad and equitable access at a time of urgent global need,” Gilead had generously decided to place the price for remdesivir at a measly $3,120 per patient.

Investors were bummed. Gilead even undercut the prediction of the Institute for Clinical and Economic Review (ICER), a watchdog that calculated a fair price for remdesivir at $4,500 per course of treatment. When Gilead announced a price below that level, it caused a tremor on Wall Street, as its share price fell. The company had already offended the Gods of Capitalism by donating hundreds of thousands of existing doses of remdesivir to the government. What self-respecting American corporation voluntarily undermines its own market?

Not Gilead, as it turns out, and really, not any pharmaceutical company. What Americans need to understand about the race to find vaccines and treatments for Covid-19 is that in the U.S., even when companies appear to downshift from maximum greed levels — and it’s not at all clear they’ve done this with coronavirus treatments — the production of pharmaceutical drugs is still a nearly riskless, subsidy-laden scam.

Americans reacted in horror five years ago when a self-satisfied shark of an executive named Martin Shkreli, a.k.a. the “Pharma Bro,” helped his company, Turing Pharmaceuticals, raise the price of lifesaving toxoplasmosis drug Daraprim from $13.50 to $750 per pill. Shkreli, who smirked throughout congressional testimony and tweeted that lawmakers were “imbeciles,” was held up as a uniquely smug exemplar of corporate evil. On some level, though, he was right to roll his eyes at all the public outrage. Although he was convicted on unrelated corruption charges, little about his specific attitudes toward drug pricing was unusual. Really, the whole industry is one big Shkreli, and Covid-19 — a highly contagious virus with unique properties that may require generations of vaccinations and booster shots — looms now as the ultimate cash cow for lesser-known Pharma Bros.

“The power of the industry combined with fear is driving extraordinary spending,” says U.S. Rep. Lloyd Doggett (D-Texas), who has been an outspoken and sometimes lonely voice warning about pandemic profiteering. “It all suggests rosy times ahead for the pharmaceutical industry.”

Doggett cautions that the rush for a cure is already padding the bottom lines of drug companies. Take the example of remdesivir, which he describes as having been “pulled off the scrap heap” to become a major revenue-driver. Having failed to be approved as a treatment for hepatitis and Ebola, it is now one of the most in-demand products in the world, and its price isn’t quite so low as Gilead claims.

For one thing, ICER reported it costs just $10 of raw materials to make each dose of remdesivir. Generic-drug producers in Bangladesh and India were already making a version of it, and their price per course of treatment was $600. Meanwhile, Gilead’s own price for governments around the world — the price it settled on for everyone except American private insurers — was $2,340 per treatment.

Moreover, ICER’s assessment of remdesivir’s price relied significantly on the idea that it would actually help save the lives of Covid-19 sufferers. “If the drug doesn’t impact mortality, and only shortens recovery time,” says Dave Whitrap of ICER, “we figure a course of treatment is worth about $310.”

To recap: Gilead, a company with a market capitalization of more than $90 billion, making it bigger than Goldman Sachs, develops an antiviral drug with the help of $99 million in American government grant money. Though the drug may cost as little as $10 per dose to make, and is being produced generically in Bangladesh at about a fifth of the list price, and costs about a third less in Europe than it does in the U.S., Gilead ended up selling hundreds of thousands of doses at the maximum conceivable level, i.e., the American private-insurance price — which, incidentally, might be about 10 times what it’s worth, given its actual medical impact.

But almost no one cared. A day after the remdesivir price was announced, Donald Trump bought 500,000 doses through September, basically the entire world supply of the drug. There were a few stories in the American press quoting Europeans who seemed startled by the selfishness of the act. “Imagine if this was a vaccine?” Liverpool University’s Dr. Andrew Hill wondered. Mostly, however, the reaction to the U.S. hoarding one of just two drugs shown to have positive effects in treating a civilization-imperiling disease (the other is the steroid dexamethasone) was muted.

Why? As articulated by Trump press secretary Kayleigh McEnany, no sick person will ever see anything like a bill for the real cost of the drug. “The hospitals have to eat the cost of treatment use,” McEnany said. “The patient will not see the cost.”

This sounds great on the surface, but of course, Americans, through their tax dollars, will pay for treatments like remdesivir and for potential vaccines. Recent House and Senate emergency-spending bills allocate as much as $20 billion or more for vaccine development, and another $6 billion for manufacturing and distribution. “The public will pay for much research and manufacturing,” says Doggett. “Only the profits will be privatized.”

Still, because individuals won’t be handed physical bills for pills or shots, nobody balks at prices companies set, if they even know what they are. With remdesivir, “nobody in the Trump administration complained” about price, says Gerald Posner, author of Pharma: Greed, Lies, and the Poisoning of America. “Just as nobody in a Biden administration likely would have complained. Does anybody care?”


It’s surprising, or maybe it isn’t, that all of this is going on during a period of intense political protest. For as much as America is going through changes, many of the dumbest aspects of our political system have remained impervious to reform. There was political will to change the formula for Big Pharma in the early Nineties and in the Obama years, and revolution is in the air now. Just likely not enough to bring drug prices down to a reasonable level.

Profiteering over the coronavirus pandemic is still in the larval stage. The average news reader has heard some enraging stories — a man busted for a $45 million scheme to defraud New York City through phony PPE sales, another arrested for hoarding 192,000 N95 respirator masks and 598,000 medical gloves, a third caught trying to bilk the VA out of $750 million — but the giant-scale gouging will take place later. And it will all be legal.

Soon enough, the infected and uninfected alike will pay any price to try to stave off illness through vaccines and cocktails of expensive treatments. It is an unprecedented profiteering opportunity, because most everyone on Earth is destined to become a customer of some kind — in fact, the United States is already a massive buyer of Covid-19 treatments despite no evidence of efficacy. “We’re in the extraordinary position of spending billions on vaccines before we know if they work,” says Doggett.

Some of the rush to spend money on treatments is driven by a perhaps-unrealistic expectation that vaccines will be available soon, or at all. Dr. Robert Gallo, co-founder and international scientific adviser of the Global Virus Network and one of the world’s leading virologists — he is the co-discoverer of HIV and the developer of the HIV blood test, among other things — worries that the unique characteristics of Covid-19 will make it hard for any traditional vaccine to have “durability.”

“You look at the structure of the proteins, and it’s a lot like HIV, because of its glycan shields,” he says, referring to sugars that protect viruses from antibodies. “Antibodies that are glycosylated in this way do not last.” Because of this, Gallo says, he worries that companies might be tempted to declare victory prematurely. He warns that people who put timetables on when treatments might be available — Trump often says things like, “We’re very close,” and press observers like Politico have warned that the administration is sitting on an “October vaccine surprise” — are almost always being disingenuous. “I’ve always said, you don’t have a vaccine until you have one, until you’re sure it works.”

Still, there’s widespread expectation that vaccines are coming — we’ve heard reports about vaccines like AstraZeneca’s AZD1222 supposedly producing good results in trials — and an observer looking on the surface level might conclude that Big Pharma in this crisis is breaking long-standing patterns of exploitation. After all, several of the biggest drugmakers have made public pledges to produce vaccines at cost, including Johnson & Johnson and AstraZeneca. “We’ll do it at no profit,” AstraZeneca CEO Pascal Soriot said. “This is what a successful, healthy pharmaceutical industry can do.”

The problem with these pledges is nobody knows what they mean. In the case of Johnson & Johnson, the company promised to produce vaccines at cost “for the duration of the emergency.” When Doggett and his staff asked what this means, they got no answer. Nor is there any transparency about what terms like “cost” mean, or how the billions allocated for research are being spent.

Add the unique arc of the Covid-19 story — which may require decades of intense, ongoing investment — and gestures like the ones made by Johnson & Johnson and AstraZeneca begin to give off an ominous odor. “You can put about as much faith in their promises as you can in the pitch of any salesperson,” says Doggett.

The Covid-19 disaster will rely significantly upon these corporate drugmakers to not only come up with cures and treatments, but to also create a manageable price for people around the world, since the pandemic won’t be stopped unless the whole world gets treated. “Is Big Pharma going to do the right thing?” asks Dana Gill, U.S. policy adviser for Doctors Without Borders. Citing the historic example of the drugmakers’ reluctance to provide HIV drugs to poor nations, and even the high price of hepatitis treatments like Sovaldi, she adds, “There’s plenty of examples of pharma companies not doing the right thing.”

What guarantees there will be a problem? The central role of the United States, whose dystopia of a medical bureaucracy is God’s gift to pharmaceutical companies.

Every other country in the world has a three-stage process for approving and pricing prescription drugs. Governments first ask if the drug is safe. If the answer is yes, it asks if the drug is effective.

If the drug passes those two hurdles, most governments then ask how much more effective the new drug is compared to existing medicines. This efficacy calculation becomes the starting point for price negotiations, which usually involve threatening to keep the drug out of the country’s state-insured pool of medications if the company does not come up with a reasonable price.

The U.S. either skips or botches these steps. First, there is no regulatory review that determines comparative efficacy. In the U.S., the FDA review ends after the first two steps: Once a drug is deemed safe and effective, it goes on the market.

Then comes the whopper: All FDA-approved drugs must, by law, be covered by Medicaid. This rule dates to 1990 with the creation of the Medicaid Drug Rebate Program. The “grand bargain” that was supposed to be built into this reform concept was that all FDA drugs would be purchased by Medicaid, provided that manufacturers gave the government either the best price available to insurers, or a 23.1 percent discount over the drug’s list price.

This sounds great, except drug manufacturers simply began figuring the Medicaid “discount” into their list-price calculations. If the medical condition is serious enough and the drug has no effective analog, companies can dictate their price. As a result, we end up with situations like the 2014 Sovaldi episode, in which Medicaid spent $3 billion in a single year just on the one drug, and was still forced to severely ration the medicine, giving it to just 2.4 percent of hepatitis-C patients. Gill notes that only 37 percent of Americans are treated for hepatitis C even now, in part because of the high price of the drug.

The business model for Big Pharma is brilliant. A substantial portion of research and development for new drugs is funded by the state, which then punts its intellectual work to private companies, who are then allowed to extract maximum profits back from the same government, which has over decades formalized an elaborate process of negotiating against itself in these matters.

How big are these giveaways? Since the 1930s, the NIH has spent about $930 billion in research. Between 2010 and 2016, every single drug that won approval from the FDA — 210 different pharmaceuticals — grew at least in part out of research funded by the NIH. A common pattern involves R&D conducted by a small or midsize company, which sells out to a behemoth like Gilead the instant its drug makes it through trials, and obscene prices are set.

This was the case with Sovaldi, for instance, which Gilead acquired when it spent $11 billion in 2012 buying out original developer Pharmasset, which had worked on a line of hepatitis drugs. Within five years, Gilead earned more than $58 billion on a line of hepatitis treatments it won in the Pharmasset deal.

This same pattern seems likely to hold with Covid-19 treatments, only the cycle of exploitation will be accelerated. “It’s a microcosm of a larger broken system, in which you have an R&D system that’s profit-driven rather than people-driven,” says Gill. “These problems existed before Covid-19, and now the U.S. is pumping billions of taxpayer funds into these companies, in most cases with no strings attached.”

Those billions are going to a handful of pharmaceutical companies participating in the Trump administration’s Operation Warp Speed, the stated aim of which is to deliver 300 million doses of Covid-19 vaccine by January 2021. On March 30th, the Department of Health and Human Services announced $456 million in spending for a Johnson & Johnson vaccine program. On April 16th, it announced $483 million for Moderna, a company that (this is not a joke) has never once successfully brought a drug to market. AstraZeneca got $1.2 billion for its vaccine program on May 21st. On June 1st, Emergent BioSolutions won $628 million to provide manufacturing for vaccines. On July 7th, Novavax cashed in, with $1.6 billion for vaccine development. Toward the end of July, the Trump administration announced a deal with Pfizer and the German firm BioNTech to spend $2 billion on 100 million doses of a vaccine. One of these companies is likely to develop the drug that allows the world to go back to normal, and the heroism of those researchers is going to be overshadowed by a profiteering system that rewards their bosses instead of them.

Indeed, the Pfizer deal surprised some, because it seemed to be priced at just $19.50 per dose. But experts estimate that when all is said and done, the same drug will sell overseas for about half that cost. As one Democratic Hill staffer puts it, “They’re making sure that the U.S. pays the highest possible price.”

The Trump administration has tools at its disposal that it could use to lower prices. The Bayh-Dole Act of 1980 gives any agency that funds research leading to a patent to use “march-in rights” to give out licenses to other manufacturers, if, among other things, the patent holder has not done enough to meet the “health or safety needs” of consumers. The president could also employ a federal law called Section 1498, which essentially allows the government to ignore patent rights in an effort to lower prices. Such rights have been invoked before, such as when Bayer cut prices of the anti-anthrax drug ciprofloxacin after the Bush II administration threatened to use that authority (ironically, current Trump HHS Secretary Alex Azar worked under Bush during that time).

“Taxpayers are the angel investors in pharmaceuticals,” says Doggett. “Any other investor would demand a stake in the outcome.”

To date, Trump has shown no interest in invoking either power. He recently signed four related executive orders that ostensibly would lower prices of generics through several means, including allowing importation from Canada and forcing Medicaid to buy drugs at the same prices that other countries pay. One Democratic aide called it “interesting” — but it was amusing to hear Pfizer CEO Albert Bourla complain that Trump was ushering in “socialized medicine.”

The casual follower of this story is probably best served understanding the Covid-19 crisis less as a historic boondoggle (that’s more likely to be found in the financial bailouts) and more as an all-out war by industry lobbyists to retain a system that is already sociopathic and grotesquely anti-competitive in the face of intense public pressure during the pandemic. To be sure, companies like AstraZeneca and Pfizer will end up making a giant pile of money from vaccines and therapies. This is particularly the case because of the somewhat eccentric nature of the disease.


“We might need several vaccines,” says Whitrap, echoing a sentiment suggested by numerous scientists, that the best course ultimately might be a cocktail of different antibody-producing techniques that will have to be administered in an overlapping strategy, perhaps with regular booster shots.

Add the fact that treatment of the already-infected will involve combination therapies (like remdesivir with dexamethasone, to begin with), and the endgame for pharmaceutical companies might be years if not decades of doses that will have to be stockpiled in enormous quantities everywhere on Earth.

This will be worth many billions to firms like Gilead, but the more important win for these companies is staving off efforts to end the monster-subsidy system built into the grant-to-patent process that is suddenly in plain view because of this disaster.

The early days of the pandemic provided ominous clues on these fronts. In March, Gilead had the stones to apply for an “orphan” designation for remdesivir, which would have given it a seven-year exclusivity window, tax breaks, waived FDA fees, and other commercial advantages.

The orphan designation was created in 1983 to provide an incentive for drug companies to develop treatments for rare disorders that affect comparatively small numbers of people, like Wilson’s disease or familial hypercholesterolemia — horrific diseases that are a major challenge to treat, but don’t offer drug companies a potential significant windfall if they develop a cure. Under the law, companies can earn orphan designation for a drug if it’s intended for treatment of fewer than 200,000 Americans.

Gilead applied for orphan perks before there were 200,000 sufferers of Covid-19 in the United States, but everyone knew this was no rare disease. Such a brazen effort to try to get the government to hand over tax credits and help squeeze out generic competitors through the use of a law designed to bribe pharmaceutical firms into developing cures for financially unpromising diseases was crude, but effective. The FDA granted the request! (Gilead did not respond to requests for comments on this story.)

Public Citizen called the move “outrageous,” and so did Bernie Sanders (well, Bernie said “truly outrageous”), and there was enough of a backlash that Gilead rescinded its own request on March 25th.

The Gilead orphan example, however, was indicative not only of the pharmaceutical companies’ thinking, but also of the political climate. Big Pharma has been extraordinarily adept at lobbying and keeping effective control of Congress. In 2003, Congress passed the Medicare Prescription Drug act, a bill pitched as a way to reduce drug prices that became a titanic industry handout.

The Bush-era law included a notorious anti-competitive provision barring the government from using its purchasing power to negotiate with companies. Much of the bill was written by Louisiana Rep. Billy Tauzin, who retired from the House shortly after it was passed and took a $2 million-per-year Thank You for Smoking-style plum job from the trade group PhRMA as the drugmakers’ Spokesperson for Evil.

A few years later, when a popular young politician named Barack Obama ran for president and won the White House promising to lower drug prices through reimportation and bulk negotiation, Tauzin and his crew met repeatedly with the new leader. At the conclusion of those meetings, the Obama administration took those proposed reforms off the table.

“The pharmaceutical companies are clearly nondiscriminatory in the political sense,” says Doggett. “Their political power is incredible.”

In March, we saw a dramatic demonstration, when the first $8.3 billion emergency-spending bill made its way through Congress. The bill included a provision inserted by Democrats that would have limited the intellectual-property rights of companies developing vaccines the government thinks are priced unfairly. Industry lobbyists not only managed to kill that provision, they also got another one inserted that protected the industry from having the approval of drugs delayed if the product is overpriced. “They couldn’t even hold off those two clauses,” Posner says.

For Posner, who has written extensively about Big Pharma, the spectacle of Democrats pounding the table for an end to price gouging is more like Kabuki theater. A few scattered members, like Doggett, will make elaborate demands, but in bills that have no hope of passing. Meanwhile, pharmaceutical companies always seem to get what they want. Posner points to the swine flu vaccine in the Gerald Ford years, when companies like Sharp and Dohme (Merck) refused to help develop vaccines unless they were guaranteed profits and shielded from liability.

Ultimately, the swine flu vaccine was a fiasco, resulting in a number of horrible side effects, including as many as 450 cases of the degenerative nerve disease Guillain-Barré. The taxpayer ended up paying for the swine flu vaccine coming and going, through guaranteed profits at the front and outlays for piles of lawsuits from victims on the other side. Nothing like that has happened with Covid-19, but the same pattern of major concessions won upfront, mixed with what amounts to guarantees of profit, is present.

“It’s a rip-off,” says Posner, comparing the olive-branch “no profit” promises by vaccine-makers to the free samples handed out by heroin dealers. In the lifesaving drug business, once you’re in the door, the rest is just counting money. And with Covid-19, the counting has already begun.







Matt Taibbi is a contributing editor for Rolling Stone and winner of the 2008 National Magazine Award for columns and commentary. His most recent book is ‘I Can’t Breathe: A Killing on Bay Street,’ about the infamous killing of Eric Garner by the New York City police. He’s also the author of the New York Times bestsellers 'Insane Clown President,' 'The Divide,' 'Griftopia,' and 'The Great Derangement.'