Baltimore Amazon workers: Amazon must provide all information relating to the death of Poushawn Brown!

https://www.wsws.org/en/articles/2021/04/03/bwi2-a03.html




Amazon BWI2 rank and file safety committee
12 hours ago







The Baltimore Amazon rank and file safety committee calls on Amazon to publicly reveal all information that it has in relation to the death of Poushawn Brown in Springfield, Virginia in January of this year. In addition, we demand that Amazon provide compensation to Poushawn’s family members and completely revamp its COVID-19 testing sites inside its facilities.

Poushawn Brown was a 38-year old mother living in the Washington, DC suburbs of Northern Virginia. She worked inside Amazon’s DDC3 facility in its COVID-19 testing department. According to Christina Brown, Poushawn’s sister, she died on January 8 after arriving home from a shift complaining of a headache. After lying down to take a nap, Poushawn never again awoke. The cause of Poushawn’s death was never determined due to prohibitively high costs for an autopsy.

Poushawn Brown



The BWI2 rank and file safety committee was formed in December of 2020 following the onset of the COVID-19 pandemic in response to the efforts of Amazon and other multibillion dollar corporations to subordinate health and safety to their profit goals.

We are an organization of, for, and led by Amazon workers which defends the rights and safety of our fellow co-workers. Our goal is the exposure of conditions at Amazon and the lies of management meant to cover them up.

We call upon Amazon to provide a full account, with all information that it has available, about the cause of Poushawn Brown’s death. Brown’s job detail inside DDC3’s COVID-19 testing department would have brought her into daily contact with people who possibly had contracted the deadly illness. What was the daily case rate of COVID-19 infections at the DDC3 facility? Was Brown infected on the job?

The cause of Brown’s death may never be known due to the length of time since her passing. Amazon’s failure to obtain an autopsy for Brown is doubly suspicious as it aids a conspiracy of silence surrounding the circumstances of her death. Had the company shown an abundance of concern for the tragic loss of one of its employees, it would have reached out to Poushawn’s family and, after offering condolences, would have paid the cost of the expensive procedure to ascertain the cause of death.

Determining the cause of death would have informed Amazon if its employees and the public at large were at risk of an illness or disease connected to its facilities. In Ontario, Canada, outbreaks of COVID-19 at Amazon warehouses have resulted in disease transmission rates that are greater than that of the surrounding community and have driven the pandemic in the region.

In Brown’s case, none of this was done. Christina Brown, in remarks made last month to the International Amazon Workers Voice, stated: “I was told [by Amazon] that they would get back to me [about Poushawn’s death, but] they never did.” The IAWV reported in February that Amazon only offered condolences after news of Poushawn’s death went viral on social media.

The reason for Amazon’s silence is obvious: If her death is connected to the DDC3 facility then Amazon could be held liable for the tragic loss. Had Brown’s death been the result of COVID-19, it would have not only made the company liable, but it would have also raised questions about the effectiveness and safety of Amazon’s COVID-19 protocols.

Brown was not a registered nurse nor did she have any specialized background in healthcare. This could potentially make Amazon responsible for criminal negligence in its on-site operations. Workers in discussion with the IAWV have noted that Amazon’s self-administered swab tests are not well-explained; giving the company a level of deniability if workers themselves fail to detect positive cases.

Furthermore, the discovery of an outbreak at the DDC3 site would have resulted in calls to shut the facility down for mandatory cleaning and sanitizing. Amazon took none of the necessary precautions. Nor did it seek to inform workers at the factory, or throughout the company, that a COVID-19 tester had mysteriously fallen ill and died. As frontline workers and fellow Amazonians, we have a right to this information.

Amazon, which spares no expense in equipping its facilities to monitor the movement of every single worker in its workforce, should reveal what it knows about Poushawn Brown’s interactions and potential exposures. The company has boasted previously about the supposed unparalleled safety of its warehouses during the pandemic and should have nothing to fear from revealing whatever information it has on Brown’s death.

In addition, we demand that Amazon provide adequate resources and support to Brown’s family, whom have been traumatized by their loss. To this date, all that has been offered to the Brown family is two months of grief counseling, the last of which was used up last week.

The Brown family’s loss is irreparable, but Amazon, which posted a record-breaking profit of $21 billion last year and whose owner and founder Jeff Bezos has reported a personal fortune of over $180 billion, has more than enough wealth to provide assistance and to make sure such a tragic loss befalls no one else in its warehouses.

With this in mind, our independent rank and file committee at BWI2 calls on Amazon to provide:
A genuine system of contract tracing within Amazon’s facilities. Workers must know, in real time, the number of cases, the department and the shift time in which a COVID-19 case has been detected. All workers known to have been in proximity to infected individuals must be allowed to quarantine for two weeks with full pay and health benefits.


Paid time off with no threat of termination for workers unwilling to risk themselves during the pandemic. The rehiring at the same wage or higher for workers previously terminated for protesting and resisting Amazon’s abuses.


Accessible, reliable, safe testing and vaccination for all employees who desire them. These items should be overseen and administered by medical professionals with the required background training and experience in their fields.


Closure of facilities for necessary cleaning. If an outbreak is detected at a fulfillment center, it must be closed for at least two days and deep-cleaned with no loss of pay to the workers affected.


An end to abusive speed-up. Extended break periods at the end of every hour to maintain health and safety. “Time Off Task” (TOT) tracking and other forms of harassment must be abolished.


Immediate reinstatement of hazard pay with retroactive pay increases.

In relation to Poushawn Brown’s tragic death, we demand:
The release of all information relating to the death of Poushawn Brown, including job requirements, on-site interactions and potential exposures. This should include internal company communications and deliberations about how it should respond to Brown’s death.


Full financial and medical support for the Brown family, paid for by Amazon.

A struggle for such demands must be completely independent from all representatives of the capitalist two-party system as well as the corporate-controlled trade union bureaucracies. The latter have done nothing to protect workers from exploitation before or during the pandemic.

For its part, the Retail, Warehouse and Department Store Union (RWDSU), which is wrapping up a unionization drive at Amazon’s BHM1 facility in Bessemer, Alabama, has said nothing publicly about Poushawn Brown. Nor has it published any demands for raising the living standards of workers at the BHM1 facility.

We issue a call to all of our Amazon co-workers to read the International Amazon Workers Voice and to become familiar with the story of Poushawn Brown. For workers in the Baltimore region, join our rank and file committee. For workers across the United States and the globe, join our growing network of independent rank and file safety committees and help fight to defend yourselves and fellow coworkers from the callous efforts of management and the corporate-controlled two-party political system to allow COVID-19 to run rampant in our workplaces.

Jeff Bezos FAILED and HARMED Amazon Employees, According to Rallygoers

 

https://www.youtube.com/watch?v=clAGZBY1xg4&ab_channel=StatusCoup

Drone war whistleblower Daniel Hale pleads guilty to one count of violating the Espionage Act

https://www.wsws.org/en/articles/2021/04/03/hale-a03.html




Kevin Reed
12 hours ago







Former intelligence analyst and whistleblower Daniel Everette Hale pleaded guilty to one count of violating the Espionage Act of 1917 on Wednesday for disclosing “classified national defense information” to a reporter.

The documents that Hale provided to investigative journalist Jeremy Scahill of The Intercept contributed significantly to public awareness of the US military drone warfare and assassination programs developed during the Obama administration. The information helped to expose the existence of the secret programs, that drone strikes killed many more innocent people than their supposed “targets” and that US citizens had been killed extrajudicially by drone strikes in violation of their constitutional rights.

Daniel Everette Hale. (Nashville Police Department via AP, File)

The reason Hale cited for pleading guilty is because the Espionage Act charges prevent a public interest defense. In other words, Hale’s lawyers were barred from arguing that the need of the public to be made aware of the criminal activities of the US government was more important than his obligation not to disclose classified information to anyone.

With a trial set to begin next week, Hale was forced to plead guilty in order to avoid potentially spending decades in federal prison. Although four of the five counts still remain against him, he is scheduled for sentencing on July 13 and is expected to be punished with no more than ten years in jail. According to the Washington Post, Judge Liam O’Grady of the Eastern District of Virginia has “indicated that Hale’s sentence would probably not change based on the number of convictions and said he would take up that issue at sentencing.”

In a Justice Department press release, Assistant Attorney General John C. Demers said of the case, “Hale has now admitted what the evidence at trial would have conclusively shown: that he took classified documents from his work at the National Geospatial Intelligence Agency (NGA), documents he had no right to retain, and that he sent them to a reporter, knowing all along that what he was doing was against the law.”

Of course, Demers made no reference to the information that Hale brought to light or the fact that his exposures revealed activities carried out by the Obama, Trump and now Biden administrations that are known by everyone in the world for being against the law in the US and internationally.

Hale, 33, of Nashville, Tennessee, enlisted in the US Air Force in 2009 and received language and intelligence training and was assigned to work for the National Security Agency (NSA) and deployed to Afghanistan as an intelligence analyst. He left the Air Force in 2013 and went to work for a defense contractor at the NGA in July 2013. His specialty at NGA was political geography and he held top secret security clearances.

Unlike other whistleblowers—such as the former defense contractor and intelligence analyst Edward Snowden who was inspired to join the US military in the period after September 11, 2001—Hale entered the service out of desperation because he was homeless and had nowhere else to go. As he explained in an on-camera interview for the film “National Bird,” Hale was well aware before he joined the Air Force that he was joining something that he was against and that he disagreed with.

In his work at the NSA Hale was assigned to locate drone strike targets. He became increasingly disturbed by the uncertainty about how many civilians were killed in each strike and the fact that the government repeatedly claimed that those killed were combatants regardless of the actual facts.

According to the Justice Department press release, Hale began his collaboration with “a reporter” in April 2013 while he was still in the Air Force. The document states, “Hale met with the reporter in person on multiple occasions, and communicated with the reporter via phone, text message, email, and, at times, an encrypted messaging platform. Then, in February 2014, while working as a cleared defense contractor at NGA, Hale printed six classified documents unrelated to his work at NGA and soon after exchanged a series of messages with the reporter. Each of the six documents printed were later published by the reporter’s news outlet.”

In total, Hale is accused of printing 36 documents from his computer including 23 that were unrelated to his work at NGA and he gave 17 of these to the reporter, 11 of which were marked either “secret” or “top secret.” The information contained in these documents—which detailed the protocol for ordering drone strikes and exposed civilian casualties and the internal discussion within the military over the accuracy of the intelligence before and after the strikes—was used by Scahill in a series of articles for The Intercept and appeared in a book he wrote in 2016, The Assassination Complex: Inside the Government’s Secret Drone Warfare Program.

In court on Wednesday, Hale admitted that he was the author of a chapter written by an anonymous author in Scahill’s book called, “Why I Leaked the Watchlist Documents.” In an interview published on The Intercept on October 15, 2015, an anonymous source (presumably Hale) tells Scahill that the “outrageous explosion of watchlisting—of monitoring people and racking and stacking them on lists, assigning them numbers, assigning them ‘baseball cards,’ assigning them death sentences without notice, on a worldwide battlefield — it was, from the very first instance, wrong.”

Jesselyn Radack, an attorney representing Hale, issued a statement about the guilty plea through the organization Whistleblower and Source Protection Program (WHISPeR) at ExposeFacts which said, “Daniel Hale may have pleaded to a count under the Espionage Act, but he is not a spy. He was accused of giving an investigative journalist truthful information in the public interest about the secretive US drone warfare program.”

Radack also explained the broader implications of the prosecution of Hale and others under the Espionage Act, “the government repeatedly chooses the heavy-handed Espionage Act to punish media sources and whistleblowers. The government’s use of the Espionage Act against media sources has everything to do with chilling speech and journalism and nothing to do with justice. … The U.S. government’s policy of punishing people who provide journalists with information in the public interest is a profound threat to free speech, free press, and a healthy democracy.”

Another organization, Defending Rights & Dissent, issued a statement that it stands with Hale as a courageous and heroic whistleblower. At the time of Hale’s indictment, the organization issued a statement of support for him that was signed by 50 civil rights groups, journalists, and anti-war and other activist organizations.

Chip Gibbons, Policy Director for Defending Rights & Dissent, has been involved in the campaign to defend Hale and pointed to the political alignment against whistleblowers who expose the crimes of US imperialism. “It is a disgrace to this country that time and time again when brave truth tellers, many of them relatively young, expose the crimes of our government it is they who go to jail. Shame on both [political] parties for their role in this and Congress for failing to act. … Hale’s case spans three administrations, including presidents from both major parties. Espionage Act abuse to prosecute whistleblowers is a bi-partisan disgrace.”

Scahill wrote an open letter to the Biden administration pleading for the Democratic Party president to “stop the war on journalism” that goes back to the administration of George W. Bush, which “used the Espionage Act and sought to jail reporters who refused to give up their sources, not to mention killing journalists in war zones.”

The killing of journalists in war zones is a reference to the infamous “Collateral Murder” video provided by Chelsea Manning to WikiLeaks and published online by editor and founder Julian Assange in 2010. Assange remains in jail in London as he awaits possible extradition to the US to face 17 counts under the Espionage Act for exposing war crimes in Iraq and Afghanistan.

Patents are preventing the manufacture of Covid-19 vaccines - Richard Wolff

 

https://www.youtube.com/watch?v=UDa3qdKzqIw&ab_channel=DemocracyAtWork

Archegos meltdown: another warning of a deep-seated crisis

https://www.wsws.org/en/articles/2021/04/03/arch-a03.html




Nick Beams
12 hours ago







The blowup of the private investment firm Archegos last month has not set off a crisis of the global financial system. But the type of highly speculative operations in which it was engaged, financed to the tune of tens of billions of dollars by some of the world’s biggest banks, certainly have the potential to do so.

In the wake of the debacle, a number of questions arise: how many more, much bigger, time bombs are out there ticking away? Where are they located, and what could set them off?

Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

Writing in the Financial Times, columnist Gillian Tett noted that when an avalanche takes place on a snowfield, the root cause is not an idiosyncratic shock, but instability in the underlying snowpack.

The immediate trigger of the Archegos avalanche was the decisions by the US media group ViacomCBS to take advantage of the near tripling of its share price over the past year—one of many companies whose shares have skyrocketed as a result of the trillions of dollars pumped into the financial system by the Fed—to issue a further $3 billion worth of stock.

This set off a fall in the company’s shares which hit Archegos because it had made big bets on the share price continuing to rise, together with similar bets on other companies, including Chinese tech stocks, which also had started to fall.

Archegos, a so-called family firm set up in 2012 by Bill Hwang, who had been convicted of illegal share trading and forced to pay a $44 million fine, had financed his deals with funding provided by major banks using a derivative known as total return swaps.

Under this system, the banks purchased shares, in return for a lucrative fee, which they held, agreeing to pay Archegos what it would have received had it actually owned the shares. If the price went up or dividends were paid, then the bank paid a return to Archegos. But if the investment failed, then Archegos would have to pay the bank.

The extent of the leverage was extraordinary. Attracted by the fat fees from such services, the banks enabled Archegos to amplify its buying power, sometimes by as much as eight times its own capital.

When the share price of ViacomCBS and other stocks bought on behalf of Archegos began to fall sharply, the banks made a margin cal,l requiring Archegos to put up more collateral to the banks. When it was unable to do so, there was a rush for the exits as the banks then sought to sell off the stocks they held in order to try to minimise their losses.

Goldman Sachs and Morgan Stanley were first out the door and managed to escape with relatively little damage. But the Japanese investment bank Nomura and Credit Suisse were not as fast and now face losses of $2 billion and $3 billion to $5 billion, respectively. Total losses incurred by the banks that financed Archegos could reach as much as $10 billion.

The use of derivatives has proved very popular among banks in recent years because it has enabled them to obtain fees without having to report their dealings.

According to a report in the Financial Times, in 2019 global banks earned an estimated $11 billion from equity financing via the use of derivatives, including total return swaps used by Archegos, double the level in 2012. And the rate of their use has been accelerating.

The New York Times reported that there has been a sharp rise in the use of stock-related derivatives in the recent period. The amount of outstanding equity derivatives has more than doubled since 2015, rising from $50 billion to more than $110 billion in the first half of 2020, according to calculations by the Bank for International Settlements.

The implosion of Archegos as a result of a margin call draws attention to the significant expansion of this form of speculation over the past year as banks have sought to take advantage of the ultra-cheap money provided by the Fed.

The Sydney Morning Herald reported that according to the US Financial Industry Regulation Authority, margin loans have risen from $479.3 billion a year ago to more than $813 billion, outstripping even the accelerated growth in the market capitalisation of Wall Street.

The Archegos debacle has brought forward the now familiar calls following every incident of financial turmoil for greater oversight and regulation by authorities. The Securities and Exchange Commission issued what amounted to a pro forma statement that it was monitoring the situation.

Democratic Senator Elizabeth Warren, one of the party’s advocates for greater oversight, said in an emailed statement that the Archegos meltdown had “all the makings of a dangerous situation.”

“We need transparency and strong oversight to ensure that the next hedge fund blowup doesn’t take the economy down with it,” she said.

But such calls, based on the illusions promoted so assiduously by the Democrats over decades, that the capitalist financial system can somehow be regulated and made to work in the interests of society, have been exposed by long experience.

There were similar calls after the implosion of Long Term Capital Management in 1998. But then came the tech wreck of 2000-2001 and the collapse of Enron. This was followed by the sub-prime mortgage speculative bubble that sparked the global financial crisis of 2008.

The response of the Democrats in the Obama administration was to bail out the banks. The Fed, under the chairmanship of Ben Bernanke and then Democrat appointee Janet Yellen, now Treasury Secretary in the Biden administration, provided the banks, hedge funds and Wall Street speculators with trillions of dollars of essentially free money to continue the very activities that led to the 2008 crash.

And as for the Dodd-Frank legislation, introduced under the claim that it would prevent a recurrence of the 2008 collapse, the increased use of derivatives at the centre of the Archegos debacle, was the outcome of the efforts by the banks and Wall Street to get around the very minor restrictions it imposed.

As the managing principal of the financial consultancy firm Finadium, Josh Galper, told the Financial Times that the growth of the equity swap market at the centre of the Archegos operations developed as the “natural outgrowth” of the Dodd-Frank regulations.

The outcome of this process has been that rather becoming more transparent, the system has become even more opaque. The increased use of financial derivatives means that several banks can provide financing to a single client without other banks being aware of it. Consequently, if a bank thinks it can reduce its exposure by offloading it to another bank it can find that the bank is also exposed to the same fund.

The Archegos event is not a one-off isolated incident, but another indication of broader trends. It comes in the wake of the Wirecard debacle last year and Greensill meltdown earlier this year, both of which involved major banks.

Fuelled by the endless supply of money from the banks, used to finance ever-increasing speculation, the entire global financial system is heading at ever greater speed towards a disaster.

One indication of that speed came on Thursday when Wall Street’s S&P 500 index set a new record high of 4000 in the midst of the largest decline in global growth, triggered by the COVID-19 pandemic, since the Great Depression. It took 1227 trading days for the S&P to advance 1000 points from 2000 to 3000, but the advance from 3000 to 4000 was achieved in just 434.

The threat of another financial disaster—the consequences of which will far outstrip the devastation of the 2008 crisis—now hangs over the entire global economy. The answer is not calls for greater regulation to try to contain the explosive contradictions of the financial system for experience has shown that is impossible.

The only viable and realistic perspective is the fight for a socialist program—the taking of political power by the working class, ending the domination of society by the financial oligarchy, and the complete economic reorganisation of society starting with the bringing of the entire financial system into public ownership under democratic control.

Growth in class struggle in the US pits workers against the pro-capitalist trade unions

https://www.wsws.org/en/articles/2021/04/03/pers-a03.html




Tom Hall
12 hours ago







There are a number of expressions of a significant growth of the class struggle in the United States, which pose fundamental questions of perspective for the working class.

At Columbia University, 3,000 graduate students are fighting against “COVID-19 austerity” and are demanding decent pay, health and child care benefits. In Worcester, Massachusetts, more than 700 nurses have been on strike for more than four weeks against unsafe staffing ratios in the midst of the coronavirus pandemic. These ongoing strikes were joined this week by important sections of industrial workers, including 1,300 workers at steelmaker ATI in the northeast US and 1,100 miners at coal company Warrior Met in Alabama.

Left: Workers picket at the Hunts Point Market on January 19, 2021 (WSWS Media). Right: Striking Columbia graduate student workers (WSWS Media).



These struggles are a component part of a growing movement of workers internationally, including a one-day general strike against a pay-rise cap in Belgium, a four-day strike by 2,000 Amazon workers in Germany, a strike by 2,000 coal miners in Bosnia and Herzegovina over unpaid wages, and a planned walkout of primary school teachers against school reopenings as the pandemic surges in France.

This is only an initial expression of an enormous growth of social antagonisms throughout the world as a result of the ruling class response to the pandemic. The subordination of public health to the profit interests of the rich has led to more than 2.8 million deaths globally, including more than 560,000 in the United States alone. At the same time, the pandemic was used to orchestrate a historically unprecedented bailout of the rich, which is being followed by a massive restructuring of class relations to force workers to pay for it.

Every struggle of the working class raises directly the reactionary role of the corporatist trade unions, including the AFL-CIO in the US, which serve to suppress the class struggle and, when they cannot avoid a strike, to isolate and defeat it. The “unions” intervene not on behalf of the workers that they falsely claim to represent, but on behalf of management against workers.

At Columbia University, the United Auto Workers, which covers graduate students, is working to keep the strike isolated from graduate students at NYU only a few miles to the south, who are in the same local. Last month, the president of the UAW local revealed that they had planned to shut down the strike before a strike vote at NYU. The UAW is doing nothing to mobilize auto workers behind the graduate students and everything to prevent them from even knowing about the strike.

Meanwhile, the UAW is starving graduate students out on the picket line with a meager $275 weekly strike pay, in spite of the fact that the UAW controls a strike fund of $790 million.

The Massachusetts Nurses Association (MNA), the largest state organization of the National Nurses United with 123,000 members, is isolating the 700 Worcester nurses while not providing any strike pay. Instead, the MNA is forcing nurses to beg for charity: it is running a Venmo account to receive donations from the public to pay for nurses’ living expenses.

As for the ATI and Warrior Met workers, the United Steelworkers and the United Mine Workers are using the tactic of an “unfair labor practice” strike to avoid raising any concrete demands, and to allow the union to shut down the strike as soon as possible under the pretext that management is “bargaining in good faith.”

Over the past year, the executives that operate and control the AFL-CIO have played an absolutely essential role in enforcing the homicidal policy of the ruling elites. The teachers unions—the American Federation of Teachers and the National Education Association—have been instrumental in forcing a reopening of schools against overwhelming opposition from both teachers and parents. Local teacher unions have forced through reopening agreements by forcing teachers to vote on a fait accompli, as in Chicago and Los Angeles, or by not allowing them to vote at all, as in Philadelphia and Detroit.

The United Food and Commercial Workers union and its subsidiary, the Retail, Wholesale and Department Store Union, have kept meatpacking workers on the job even as more than 50,000 in the United States have become infected and at least 286 have died. In the auto industry, the UAW is not only keeping workers on the job but forcing them to work 50, 60 and even 80 hours per week, while covering up all information on the extent of infections and deaths.

The word “union” conjures up images of an organization that defends workers against the deprivations of the companies, or at least one whose fate is somehow bound up with its ability and willingness to defend workers’ standard of living. This, however, bears no relationship whatever to the present unions. They function as labor syndicates, controlled by wealthy executives whose incomes move in inverse proportion to the fate of workers.

Within every major national organization in the AFL-CIO, there are literally dozens, and in some cases hundreds, of bureaucrats at both the national and local levels who earn more than $100,000 per year, many times more than the workers in the unions. Top executives have incomes that place them in the top 5 or even top 1 percent of income earners in the US.

Stuart Appelbaum, the president of the relatively small RWDSU, which is campaigning for recognition at Amazon, made $344,464 last year, and secretary treasurer Jack Wurm made $324,022. In the RWDSU national office, there are 29 staffers who “earned” more than $100,000 last year, and the union spent more than $6 million on salaries for the national office alone.

Randi Weingarten of the AFT made $564,236 in total compensation for the fiscal year ending June 2019, according to the AFT’s IRS filings. The national office received more than $253 million in receipts and spent more than $238 million, including $43.75 million on salaries and zero dollars on strike benefits last year. Fully 234 people in the AFT national office alone made more than $100,000 during the union’s last reporting period, and 28 made more than $200,000.

The Teamsters union has more than 200 officials on its payroll making more than $100,000 a year, and ten making more than $200,000, including President James Hoffa ($387,000).

As the unions’ dues base has continuously shrunk as a result of their own betrayals, the executives have resorted to control of strike funds, pension funds and even ownership of corporate stock in order to finance and supplement their income. This directly ties the financial status of the organizations and the executives who control them to the profitability of corporate America and the performance of the stock market. They fear a movement of the working class not least because it would threaten their own financial interests.

The union bureaucracy has shared in the looting operation carried out by Wall Street during the pandemic. According to the UAW’s latest federal financial filings, for example, its assets increased by $31 million last year, and the union shelled out tens of thousands of dollars for trips to resorts and casinos for its top bureaucrats, hundreds of whom earn more than $150,000 per year. In recent years, the UAW has been exposed as an organization run by corrupt gangsters who steal workers’ dues money and accept bribes from the companies in exchange for ramming through concessions contracts.

The unions are emerging more and more as a critical instrument of bourgeois statecraft. The unprecedented intervention into the unionization campaign at Amazon by Biden and the Democrats, and even right-wing Republican Marco Rubio, reflects the intense fear within ruling circles of the growth of the class struggle, and their calculations that this can be blunted by putting workers under the guardianship of the AFL-CIO and byzantine US labor law.

Under conditions of growing commercial and military conflict between the US and its rivals China and Russia, the unions are viewed as a means of tying the working class to the capitalist state and its war preparations.

This year is the fortieth anniversary of the betrayal by the AFL-CIO of the PATCO air traffic controllers, who were fired by President Ronald Reagan in a deliberate provocation. The attack on the PATCO workers was preceded by an agreement from the AFL-CIO that it would oppose any broader mobilization of the working class to defend them. This was followed by a series of struggles that were systematically isolated and defeated with the collaboration of the unions. This was a key turning point, not just in the US but around the world, in the complete integration of the unions into the structure of corporate management.

The expansion and unification of the struggles of the working class requires the formation of rank-and-file factory and workplace committees, completely independent of the pro-capitalist trade unions. Such committees are the form through which workers can advance their own demands, including emergency measures to stop the coronavirus pandemic, an end to the unsafe reopening of schools and workplaces, with full compensation for workers and small businesses.

The World Socialist Web Site and the Socialist Equality Party will do everything in our power to promote and assist in the establishment of independent workers’ organizations, connecting the growth of the class struggle to a socialist political perspective and program. We urge workers interested in establishing such committees to contact us today.

Financial fictions: the old ones

by michael roberts



I must declare an interest. In days of old, many moons ago, I worked for an investment consultancy that advised Bill Hwang, the owner of Archegos, the ‘family office’ hedge fund that recently collapsed leaving $20bn owed to two big banks, Credit Suisse and Nomura.

Bill Hwang

Hwang was then a ‘Tiger cub’, someone that veteran hedge fund manager, Julian Robertson of the pioneering Tiger hedge fund showed favour on with ‘seed’ investment capital. After leaving Tiger, Hwang struck out on his own back in 2001 to great success. But then there was the first scandal when in 2013 Hwang was barred from the US investment business. Authorities alleged that, as part of an insider-trading scheme, his Tiger Asia Management hedge fund had violated promises it made to some of the world’s most powerful investment banks.

But no matter, Hwang, a pastor’s son and deeply religious, soon re-invented himself to do God’s work’ in financial speculation. Hwang has credited his faith with helping him get through the difficult times. After Tiger Asia’s demise, he said that he had listened to recordings of the Bible for hours.
https://thenextrecession.wordpress.com/2015/02/16/doing-gods-work-again/

On getting God’s word, he set up what is called a ‘family office’, Archegos Capital Management, and eventually built up its trading positions running into the tens of billions of dollars with Wall Street banks, including some of the ones his old firm was accused of cheating. Hwang’s downfall came last week when he was unable to meet margin calls on derivatives trades, known as equity swaps, that he had struck with several investment banks. These instruments gave speculators the option to gain from stock positions without having to own the underlying shares himself. As Marx put it some 150 years ago in Capital, “Profit can be made purely from trading in a variety of financial claims existing only on paper…. Indeed, profit can be made by using only borrowed capital to engage in (speculative) trade, not backed up by any tangible asset.”

It seems that Hwang had borrowed billions of swaps from different banks to maximise his ‘leverage’ in betting on the stock market, without telling each bank how much he had borrowed. The Archegos Capital debacle has exposed the hidden risks of the lucrative but opaque equity derivatives business through which banks empower hedge funds to make outsize bets on stocks and related assets. “We have a fundamental problem in the reporting of holdings of synthetic equity that is not secret and is not new,” said Tyler Gellasch, a former SEC official and executive director of Healthy Markets, an advocacy group. “If there are five different banks providing financing to a single client, each bank may not know it, and may instead think it can sell its exposure to another bank if they run into trouble — but they can’t, because those banks are already exposed.”

When Archegos’ bets went south, Hwang could not meet his commitments to these banks and several were left holding the baby. As Marx said in Capital, “In every stock-jobbing swindle everyone knows that some time or other the crash must come, but everyone hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety.” In this case, Goldman Sachs and Morgan Stanley got out of Whang first and Credit Suisse and Nomura did not.

The Archegos story is an old-style financial meltdown. Yes, the financial instrument involved, equity swap derivatives, is a new form of financial asset (or what Marx called ‘fictitious capital’), invented in the last 25 years. And the setting up of a ‘family office’, which is not subject to the same financial regulations (such as they are) for modern hedge funds, has become a new way of avoiding scrutiny. Hedge funds are speculative financial vehicles basically for betting (with mostly borrowed money) on the movement in the prices of stocks, bonds, commodities, and on the ‘derivatives’ of these ad infinitum. Betting companies when advertising on TV must keep saying ‘please bet responsibly’, as the regulators demand (with little effect, of course). But with ‘family offices’, usually funded by mega-rich global family fortunes, it’s even worse. There are no controls or warnings at all.

In a report issued a year ago, business school Insead noted that the number of single family offices had grown by 38 per cent between 2017 and 2019, to reach more than 7,000. Assets under management stood at some $5.9tn in 2019, the report estimated. That compares with $3.6tn in the global hedge fund industry, according to HFR. These ‘family offices’ can do what they want with their assets, without regulation. Rich families place a growing share of their wealth in these types of structures. On average, they control assets worth $1.6bn apiece, according to another 2020 study by UBS, and a handful can stretch into hundreds of billions of dollars. Typically, each family office has two or three offices, often in hubs like Singapore, Luxembourg and London. Chief executives are paid something in the order of $335,000 a year, according to the Insead report.

In the Archegos example, it seems that only the mega investment banks have suffered and not the man and woman in the street. So we may have no sympathy for them. But indirectly, we all get hit because banks are using funds, also often borrowed, to speculate in this way rather than providing a proper banking service for people. Banks lend with strict conditions on mortgages or loans to small businesses, but it seems with no control at all to the likes of Archegos, where banks can make big money if all goes well. But as one equity derivatives trader put it, equity total return swaps are “a classic case of picking up nickels in front of a steamroller… You can pick up those nickels all day. That steamroller moves pretty slowly. But if you trip, boy, do you get run over.”

In the case of the Woodford financial scandal in the UK, there has been a direct hit to people in the ‘real world’. It is more than 18 months since the implosion of Neil Woodford’s investment fund business sparked the biggest British investment scandal for a decade. More than 300,000 individuals who entrusted their hard-earned savings to the famed ‘stock picker’ are still waiting to recoup the money. Many have had to delay retirement after nursing tens of thousands of pounds of losses. The UK’s Financial Conduct Authority, the supposed financial regulator, failed miserably to spot the Woodford crash. Woodford was once lauded as “the man who can’t stop making money” and “Britain’s Warren Buffett”. But great stock speculator was forced to suspend trading in his £3.7bn flagship Equity Income fund after failing to cope with a surge of investors reclaiming their cash. Investors stand to lose up to £1bn — more than a quarter of the fund’s value at suspension.

Neil Woodford

Then there is Greensill. This was a ‘fintech’ bank set up by former Morgan Stanley and Citibank executive, Lex Greensill. It specialised in 'supply-chain financing", ie buying the invoices of companies owed money by overseas suppliers at a discount, to collect the debts later at a profit. Supply chain financing is just a fancy modern name for the age-old practice of factoring, whereby suppliers sell at a discount the debts their customers owe them to a financier who collects the full amount in due course. Lex Greensill’s revolutionary innovation was to realise that these debts could be packaged into investment funds — much as the big investment banks turned subprime mortgages into securities before the 2008 financial crisis.

Greensill took deposits to invest in its apparently lucrative operation from companies and local councils, offering high rates and finding funds and loans for clients when big banks would not lend. It sprouted fast and took on exposure in loans worth $143bn by 2019 with ten million customers. In particular, it provided funding for metals magnate Sanjeev Gupta, who owns the third biggest steel compnay in the UK.

Sanjeev Gupta

But Greenshill went bust because it could no longer find sufficient financing for its ever-expanding loan commitments and high deposit rates. Gupta's steel workers could now lose their jobs and German local councils could take a $500m hit.

The scandal is still unfolding as it seems Greensill never had sufficient funding to take on the huge liabilities (debts) that the likes of Gupta’s steel companies had. Worse, it also seems that Gupta’s companies were using invoices to raise loans from Greensill that were issued by other parts of the corporate complex – in other words, claiming potential receipts as collateral to Greensill that were really debts owed by other parts of the company! Meanwhile Gupta’s group company was receiving state-backed emergency Covid loans to tide its businesses over during the pandemic. Thus Gupta completed the purchase of a £42m London townhouse. Gupta is now believed to be in Dubai. The UK government under Boris Johnson may well be forced to ‘nationalise’ Gupta’s Liberty Steel to save the business. It has drawn up a contingency plan to run Liberty Steel using public money while searching for a buyer. So this financial meltdown will be resolved with the British public paying up, similar to how the Treasury supported British Steel in 2019 at a cost to taxpayers of nearly £600m.

So nothing has changed from when Marx wrote about “a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation.”

In the rise of finance, “All standards of measurement, all excuses more or less still justified under capitalist production, disappear.” …. since property here exists in the form of stock, its movement and transfer become purely a result of gambling on the stock exchange, where the little fish are swallowed by the sharks and the lambs by the stock-exchange wolves.

What is new are the forms of these swindles. There has been a huge rise in what is called ‘shadow banking’, ie lending and funding by non-banks (NBFI), which has expanded hugely since the end of the GFC and is now nearly half of all financial 'assets'. Our new financial moralist, former Bank of England governor, Mark Carney, warns that : “more than £20 trillion of assets are held in funds that promise daily liquidity to investors despite investing in potentially illiquid underlying assets.” Carney reckons that funds like those run by the disgraced manager Neil Woodford “are built on a lie and could pose a threat to the global economy. These funds are holding assets that are hard to sell in a hurry – while allowing investors to take their money out on demand – are a mounting risk to the financial system.”
https://thenextrecession.wordpress.com/2021/03/15/mark-carney-value-or-price/

https://www.fsb.org/.../global-monitoring-report-on-non.../

Back to Marx here. “The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, from enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling.” So the finance sector carries on just as before, engaging in speculation and regulators cannot and do not stop them.
https://thenextrecession.wordpress.com/2018/10/06/regulation-does-not-work/

As global stock markets hit new all-time highs and central banks continue to provide almost unlimited supplies of credit money into the financial sector, in the second part of this discussion of financial meltdowns, I shall review some new financial fictions and their inevitable meltdowns.