In the aftermath of pandemic relief programs such as increased unemployment and nutrition benefits, greater rental assistance and the child tax credit — policies which the Biden administration allowed to expire in 2021 — Americans faced the largest one-year increase of poverty on record. According to a report from the Census Bureau published on Sept. 12, the sharpest increase in poverty affected children, as child poverty more than doubled from a record low of 5.2 percent to now 12.4 percent. This was indicated by the Supplemental Poverty Measure, which “factors in the impact of government assistance and geographical differences in the cost of living.”
In the wake of an unabated housing crisis and soaring rents, working class sections in Austria have intensified their campaign demanding long-term rent freeze and reforms in the country’s rental law. In its petition, the Communist Party of Austria (KPO) demanded the Austrian People’s Party (OVP)-Greens-led federal government to freeze rents at the current levels until 2029. The Communist Youth of Austria (KJO) endorsed this demand. Groups including the Austrian Tenants’ Association and the Austrian Trade Union Confederation (ÖGB) have also called for a freeze on rents. According to reports, persistently high inflation and a rising Consumer Price Index (CPI) led to a continuous increase in rental prices across the country.
So what we were going to talk about is really the Third World debt crisis, the new Third World debt crisis. How similar and how different is it from the one that hit the Third World back in the 1980s? What has been the specific contribution, if any, of the pandemic and the war? And what is the future of the Third World, given that in addition to all the other calamities, it is now hit with this debt crisis? Now, last time we started with a list of seven questions and we only got through the first two. So let me just go through the seven questions and then we will begin with the third question. So the first question was, what was the genesis of the 1980s debt crisis?
The contradictions of China-bashing in the United States begin with how often it is flat-out untrue. The Wall Street Journal reports that the “Chinese spy” balloon that President Joe Biden shot down with immense patriotic fanfare in February 2023 did not in fact transmit pictures or anything else to China. White House economists have been trying to excuse persistent U.S. inflation saying it is a global problem and inflation is worse elsewhere in the world. China’s inflation rate is 0.7 percent year-on-year. Financial media outlets stress how China’s GDP growth rate is lower than it used to be. China now estimates that its 2023 GDP growth will be 5 to 5.5 percent.
Corporate profits have been the biggest contributor to inflation in Europe since 2021. This is according to a study published by the International Monetary Fund (IMF). “Rising corporate profits account for almost half the increase in Europe’s inflation over the past two years as companies increased prices by more than spiking costs of imported energy”, wrote IMF economists this June. The IMF said “companies may have to accept a smaller profit share if inflation is to remain on track to reach the European Central Bank’s 2-percent target in 2025”. IMF economists Niels-Jakob Hansen, Frederik Toscani, and Jing Zhou detailed their findings in a research paper, “Euro Area Inflation after the Pandemic and Energy Shock: Import Prices, Profits and Wages”.
Today we are joined by Anne Pettifor to discuss an urgent issue of our time, that of the third world debt crisis. As we record this, this is the topic of the Summit on New Global Financing Pact called by Emmanuel Macron in Paris. And we couldn’t find a more authoritative guest for this show. Anne Pettifor does not really need any introduction, and I’m only going to give one to remind ourselves of the range of her contributions. She’s a prolific writer on issues relating to debt, finance and development, and is also an activist and has intervened in politics to great effect.
The political class in Germany is stunned by the findings of a YouGov poll published on Friday that 20% of voters would give their vote to the far-right Alternative for Germany (AfD), making it the second-strongest party behind the center-right Christian Democratic Union (CDU) (28%) and ahead of center-left Chancellor Olaf Scholz’s Social Democratic Party (SPD) (19%). There is no mistaking that it is a political earthquake. Given Germany’s proportional representative system — which is unlike the US or the UK where, too, politics is fractious but is protected by the first-past-the-pole voting system — it is reasonable to estimate that the current “traffic-light” coalition between the SPD, the Greens (who polled 15%) and the neo-liberal Free Democrats or FDP (7%) no longer has a mandate to rule, after only one and a half years in office.
We at the Nigeria Labour Congress (NLC) are outraged by the pronouncement of President Bola Tinubu removing the "fuel subsidy' without due consultations with critical stake holders or without putting in place palliative measures to cushion the harsh effects of the ‘subsidy removal’. Within hours of his pronouncement, the nation went into a tailspin due to a combination of service shut downs and product price hike, in some places representing over 300 per cent price adjustment. By his insensitive decision, President Tinubu on his inauguration day brought tears and sorrow to millions of Nigerians instead of hope. He equally devalued the quality of their lives by over 300 per cent and counting.
Multimillionaire food-writer Jamie Oliver has some advice for the one in five households, including 9.3 million adults and 4 million children currently experiencing food insecurity in the UK: check out his £1 Wonder website for ‘thrifty tips, helpful hacks and delicious recipes that won’t blow the budget’. Mind you, the energy costs are not included, access to white goods like a freezer is assumed, and you will need to put aside 2 hours and 40 minutes to cook your spag-bol. Even the BBC are at it with a page on their website dedicated to £1 meals. Like many other personalised responses to the spiraling cost-of-living crisis focused entirely on money-saving frugality, Oliver and the BBC miss the bigger picture behind food inequality across the country.
Inflation was slow throughout the second half of 2022. Yet you wouldn’t know this from newspaper headlines, statements from “experts,” or the statements and actions of the Federal Reserve. It was only in January of 2023, when the Consumer Price Index (CPI) for December 2022 was released showing an actual (very small) decline in prices for the month, that there began to be a general recognition that the relatively high rate of inflation of late 2021 and the first half of 2022 had abated. The December 2022 decline of one-tenth of 1% was later revised upward to an increase of one-tenth of 1%, but this tiny increase still brought attention to the easing of inflation.
Mainstream trade unions in Italy, including the Italian General Confederation of Labor (CGIL), the Italian Confederation of Workers’ Trade Unions (CISL), and the Italian Labor Union (UIL), organized a major demonstration in Milan on Saturday, May 13. The unions denounced the economic policies of the right-wing government led by Giorgia Meloni, including proposed cuts to public services and social welfare programs, along with lack of investment in job creation. Cadres from various political groups including the Communist Refoundation Party (PRC) also participated and expressed solidarity with workers.
On earnings calls last week, major food brands bragged about their ability to keep raising prices. Soda and snack giant PepsiCo told investors that it raised prices 16% last quarter, bringing in 18% more profit. Nestle announced a 10% price hike and Unilever said its food brands cost 13% more. In all these cases, higher prices helped food giants increase profits even as their sales decreased. Food giants keep raising prices even though well-publicized cost pressures, like fuel costs, rising wages, and supply chain disruptions, have largely subsided. On Tuesday, the Wall Street Journal landed on an explanation for persistent food inflation that many consumer groups and economists (including the Open Markets Institute) provided months ago: corporate greed.
The European Union heavily sanctioned Russia and pledged to boycott its oil, yet continues to buy it, and at an even higher price, albeit indirectly. India is importing record levels of discounted Russian crude, purchasing it in currencies other than the dollar. India then refines the Russian oil and exports fuel to Europe at a profit. Meanwhile, increasing energy costs in Europe have stoked inflation, causing workers’ wages to significantly decline. The real wages of workers in the Eurozone fell by 6.5% between 2020 and 2022. As of April, Bloomberg reported, European imports of refined fuel from India are approaching 360,000 barrels per day.
An intense three-day strike by educators in Latvia, led by the Latvian Education and Science Workers’ Trade Union (LIZDA), forced the coalition government headed by Krisjanis Karins to increase their wages. LIZDA organized a major protest march in the Latvian capital of Riga on April 24 and went on a three-day strike until April 27. Subsequently, in a meeting with the union leadership on April 25, government authorities in principle agreed to increase teachers’ pay, with additional funding of EUR 4.168 million (USD 4.59 million). On April 26, an emergency meeting of the cabinet approved the agreement for additional funds for the wage hike.
Political paralysis is snuffing out what is left of our anemic democracy. It is the paralysis of doing nothing while the ruling oligarchs, who have increased their wealth by nearly a third since the pandemic began and by close to 90 percent over the past decade, orchestrate virtual tax boycotts as millions of Americans go into bankruptcy to pay medical bills, mortgages, credit card debt, student debt, car loans and soaring utility bills demanded by a system that has privatized nearly every aspect of our lives. It is the paralysis of doing nothing about raising the minimum wage, despite the ravages of inflation, around 600,000 homeless Americans and 33.8 million people living in food insecure homes, including 9.3 million children.