Chris Hedges's Blog, page 112

Iran Adds Advanced Centrifuges in Latest Nuclear Deal Breach

TEHRAN, Iran — Iran on Monday broke further away from its collapsing 2015 nuclear deal with world powers by doubling the number of advanced centrifuges it operates, linking the decision to U.S. President Donald Trump’s withdrawal from the agreement over a year ago.

The announcement — which also included Iran saying it now has a prototype centrifuge that works 50 times faster than those allowed under the deal — came as demonstrators across the country marked the 40th anniversary of the 1979 U.S. Embassy takeover that started a 444-day hostage crisis.

By starting up these advanced centrifuges, Iran further cut into the one year that experts estimate Tehran would need to have enough material for building a nuclear weapon — if it chose to pursue one. Iran long has insisted its program is for peaceful purposes, though Western fears about its work led to the 2015 agreement that saw Tehran limit its enrichment of uranium in exchange for the lifting of economic sanctions.

Tehran has gone from producing some 450 grams (1 pound) of low-enriched uranium a day to 5 kilograms (11 pounds), said Ali Akbar Salehi, the head of the Atomic Energy Organization of Iran. Iran now holds over 500 kilograms (1,102 pounds) of low-enriched uranium, Salehi said. The deal had limited Iran to 300 kilograms (661 pounds).

Visiting Iran’s underground Natanz enrichment facility, Salehi dramatically pushed a button on a keyboard to start a chain of 30 IR-6 centrifuges as state television cameras filmed, increasing the number of working centrifuges to 60.

“With the grace of God, I start the gas injection,” the U.S.-trained scientist said.

The deal once limited Iran to using only 5,060 first-generation IR-1 centrifuges to enrich uranium by rapidly spinning uranium hexafluoride gas. An IR-6 centrifuge can produce enriched uranium 10 times faster than an IR-1, Iranian officials say.

Salehi also announced that scientists were working on a prototype he called the IR-9, which worked 50-times faster than the IR-1.

As of now, Iran is enriching uranium up to 4.5%, in violation of the accord’s limit of 3.67%. Enriched uranium at the 3.67% level is enough for peaceful pursuits but is far below weapons-grade levels of 90%. At the 4.5% level, it is enough to help power Iran’s Bushehr reactor, the country’s only nuclear power plant. Prior to the atomic deal, Iran only reached up to 20%.

Iranian President Hassan Rouhani will announce further steps away from the accord sometime soon, government spokesman Ali Rabiei separately said Monday, suggesting Salehi’s comments could be followed by additional violations of the nuclear deal. An announcement had been expected this week.

Iran has threatened in the past to push enrichment back up to 20%. That would worry nuclear nonproliferation experts because 20% is a short technical step away from reaching weapons-grade levels of 90%. It also has said it could ban inspectors from the United Nations’ nuclear watchdog, the International Atomic Energy Agency.

The Vienna-based IAEA declined to comment on Iran’s announcement. The IAEA previously said Iran planned to build two cascades, one with 164 IR-2M centrifuges and another with 164 IR-5 centrifuges. A cascade is a group of centrifuges working together to more quickly enrich uranium.

Iran broke through its stockpile and enrichment limitations to try to pressure Europe to offer it a new deal, more than a year since Trump unilaterally withdrew America from the accord. But so far, European nations have been unable to offer Iran a way to help it sell its oil abroad as it faces strict U.S. sanctions.

Salehi again expressed Iran’s ability to step back if a deal is made.

“If they return to their commitments, we also will go back to our commitments,” he said.

U.N. Secretary-General Antonio Guterres called on the Iranians to implement the 2015 nuclear deal, a spokesman said.

“It was a very significant diplomatic achievement,” U.N. deputy spokesman Farhan Haq said. “He regrets any steps away from that agreement by any of the parties.”

Maja Kocijancic, a spokeswoman for the European Commission, urged Iran “to reverse such steps without delay and to refrain from any further measures that would undermine the nuclear deal.”

The White House in a statement, noting the 40th anniversary of the hostage crisis, said the U.S. “will continue to impose crippling sanctions” until Iran changes its behavior. The U.S. also imposed new sanctions Monday on members of Supreme Leader Ayatollah Ali Khamenei’s inner circle.

Meanwhile Monday, demonstrators gathered in front of the former U.S. Embassy in downtown Tehran to mark the takeover. The resulting hostage crisis saw Islamist students seize the post in response to U.S. President Jimmy Carter allowing Iran’s autocratic leader, Shah Mohammad Reza Pahlavi, to receive medical care in the U.S. While some hostages found freedom amid the crisis, 52 Americans were held for 444 days until U.S. President Ronald Reagan’s inauguration in Jan. 1981.

“Thanks to God, today the revolution’s seedlings have evolved into a fruitful and huge tree that its shadow has covered the entire” Middle East, said Gen. Abdolrahim Mousavi, the commander of the Iranian army.

However, this year’s commemoration of the embassy seizure comes as Iran’s regional allies in Iraq and Lebanon face widespread protests. The Iranian Consulate in Karbala, Iraq, a holy city for Shiites, saw a mob attack it overnight. Violence there killed three people and wounded 19, Iraqi officials said.

Trump retweeted posts by Saudi-linked media showing the chaos outside the consulate. The violence comes after the hard-line Keyhan newspaper in Iran reiterated a call for demonstrators to seize U.S. and Saudi diplomatic posts in Iraq in response to the unrest.

The collapse of the nuclear deal coincided with a tense summer of mysterious attacks on oil tankers and Saudi oil facilities that the U.S. blamed on Iran. Tehran denied the allegation, though it did seize oil tankers and shoot down a U.S. military surveillance drone.

The U.S. has increased its military presence across the Mideast, including basing troops in Saudi Arabia for the first time since the aftermath of the Sept. 11, 2001 terror attacks. Both Saudi Arabia and the neighboring United Arab Emirates are believed to be talking to Tehran through back channels to ease tensions. Rouhani recently sent a letter to both Bahraini and Saudi leaders on regional peace and security, said Rabiei, the Iranian government spokesman.

___

Gambrell reported from Dubai, United Arab Emirates. Associated Press writers Deb Riechmann in Washington and Samuel Petrequin in Paris contributed to this report.

Is the Run on the Dollar Due to Panic or Greed?

What’s going on in the repo market? Rates on repurchase (“repo”)  agreements should be about 2%, in line with the Federal Reserve funds rate. But they shot up to over 5% on Sept. 16 and got as high as 10% on Sept. 17. Yet banks were refusing to lend to each other, evidently passing up big profits to hold onto their cash—just as they did in the housing market crash and Great Recession of 2008-09.

Because banks weren’t lending, the Federal Reserve Bank of New York jumped in, increasing its overnight repo operations to $75 billion, and on Oct. 23, it upped the ante to $120 billion in overnight operations and $45 billion in longer-term operations.

Why are banks no longer lending to each other? Are they afraid that collapse is imminent somewhere in the system, as with the Lehman collapse in 2008?

Perhaps, and if so, the likely suspect is Deutsche Bank. But it looks to be just another case of Wall Street fattening itself at the public trough, using the funds of mom-and-pop depositors to maximize bank profits and line the pockets of bank executives while depriving small businesses of affordable loans.

Why the Repo Market Is a Big Deal

The repo market allows banks and other financial institutions to borrow and lend to each other, usually overnight. More than $1 trillion in overnight repo transactions collateralized with U.S. government debt occur every day. Banks lacking available deposits frequently go to these markets to fund their loans and finance their trades.

Legally, repos are sales and repurchases; but they function like secured overnight or short-term loans. They work like a pawn shop: The lender takes an asset (usually a federal security) in exchange for cash, with an agreement to return the asset for the cash plus interest the next day, unless the loan is rolled over. The New York Fed currently engages in two types of repo operations: overnight repurchase agreements that unwind the next business day, and 14-day repurchase agreements that unwind after 14 days.

The Fed restarted its large-scale repo operations in September, when borrowing rates shot up due to an unexpectedly high demand for dollars. The Fed said the unusual demand was due largely to quarterly tax payments and Treasury debt settlements. Other factors proposed as contributing to the cash strains include regulatory change and a decline in bank reserves due to “quantitative tightening” (in which the Fed shrunk its balance sheet by selling some of its quantitative easing (QE) acquisitions back into the market), as well as unusually high government debt issuance over the last four years and a flight into U.S. currency and securities to avoid the negative interest rate policies of central banks abroad.

Panic or Calculated Self-Interest?

The Fed’s stated objective in boosting the liquidity available to financial markets was simply to maintain its “target rate” for the interest charged by banks to each other in the Fed funds market. But critics were not convinced. Why were private capital markets once again in need of public support if there was no financial crisis in sight? Was the Fed engaged in a stealth “QE4,” restarting its quantitative easing program?

The Fed insisted that it wasn’t, and financial analyst Wolf Richter agreed. Writing on Wolfstreet.com on Oct. 10, he said the banks, and particularly the primary dealers, were hoarding their long-term securities in anticipation of higher profits. The primary dealers are the 24 U.S. and foreign broker-dealers and banks authorized to deal directly with the U.S. Treasury and the New York Fed. They were funding their horde of long-term securities in the repo market, putting pressure on that market, as the Fed said in the minutes for its July meeting, even before repo rates blew out in mid-September. Richter contended:

“They’d expected a massive bout of QE, and perhaps some of the players had gleefully contributed to, or even instigated the turmoil in the repo market to make sure they would get that massive bout of QE as the Fed would be forced to calm the waters with QE, the theory went. This QE would include big purchases of long-term securities to push down long-term yields, and drive up the prices of those bonds. … Prices were high and yields were low, a sign that there was heavy demand. But the dealers were holding out for even higher prices and even lower yields. … Massive QE, where the Fed buys these types of Treasury securities, would accomplish that. But that’s exactly what the Fed said it wouldn’t do.”

What the Fed was doing instead, it said, was reviving its “standing repo facility”—the facility it had used before September 2008, when it abandoned that device in favor of QE and zero-interest rate policy. But it insisted that this was not QE, expanding the money supply. Overnight repos are just an advance of credit, which must be repaid the next day. While $165 billion per month sounds like a lot, repo loans don’t accumulate; the Fed is just making short-term advances, available as needed up to a limit of $165 billion.

In the website Wall Street on Parade on Oct. 28, Pam and Russ Martens pointed to another greed-driven trigger to the recent run on repo. The perpetrator was JPMorgan Chase, the largest bank in the U.S., with $1.6 trillion in deposits. To quote David Henry on Reuters: “Publicly-filed data shows JPMorgan reduced the cash it has on deposit at the Federal Reserve, from which it might have lent, by $158 billion in the year through June, a 57% decline. … [T]he data shows its switch accounted for about a third of the drop in all banking reserves at the Fed during the period.”

This $158 billion drawdown in JPMorgan’s reserve account is evidently what necessitated the Fed’s $165 billion in new repo offerings. But why the large drawdown?

Henry attributed it to regulatory changes that increased the bank’s required reserves, but according to the Martens, something more was involved. “The shocking news,” they write, is that “[a]ccording to its SEC filings, JPMorgan Chase is partly using [f]ederally insured deposits made by moms and pops across the country in its more than 5,000 branches to prop up its share price with buybacks.” Small businesses are being deprived of affordable loans because the liquidity necessary to back the loans is being used to prop up bank stock prices. Bank shares constitute a substantial portion of the pay of bank executives.

According to Thomas Hoenig, then-vice chair of the Federal Deposit Insurance Corporation, in a July 2017 letter to the Senate Banking Committee:

“[If] the 10 largest U.S. Bank Holding Companies [BHCs] were to retain a greater share of their earnings earmarked for dividends and share buybacks in 2017 they would be able to increase loans by more than $1 trillion, which is greater than 5 percent of annual U.S. GDP.

“Four of the 10 BHCs will distribute more than 100 percent of their current year’s earnings, which alone could support approximately $537 billion in new loans to Main Street.

“If share buybacks of $83 billion, representing 72 percent of total payouts for these 10 BHCs in 2017, were instead retained, they could, under current capital rules, increase small business loans by three quarters of a trillion dollars or mortgage loans by almost one and a half trillion dollars.”

Hoenig was referring to the banks’ own capital, rather than to their deposits, but the damage to local credit markets is even worse if deposits also are being diverted to fund share buybacks. Banks are not serving the real economy. They are using public credit backed by public funds to feed their own private bottom lines.

The whole repo rigmarole underscores the sleight of hand on which our money and banking systems are built, and why it is time to change them. Banks do not really have the money they lend. To back their loans, they rely on their ability to borrow from the reserves of other banks, generated from their customers’ deposits. If those banks withhold their deposits in the insatiable pursuit of higher profits, the borrowing banks must turn to the public purse for liquidity. The banks could not function without public support. They should be turned into public utilities, mandated to serve the interests of the people and the productive economy on which the public depends.

U.S. Tells U.N. It Is Pulling Out of Paris Climate Deal

WASHINGTON — The United States has told the United Nations it has begun the process of pulling out of the landmark 2015 Paris climate agreement.

Secretary of State Mike Pompeo said Monday that he submitted a formal notice to the United Nations. That starts a withdrawal process that does not become official for a year. His statement touted America’s carbon pollution cuts and called the Paris deal an “unfair economic burden” to the U.S. economy.

Nearly 200 nations signed the climate deal in which each country provides its own goals to curb emissions of heat-trapping gases that lead to climate change.

“In international climate discussions, we will continue to offer a realistic and pragmatic model — backed by a record of real world results — showing innovation and open markets lead to greater prosperity, fewer emissions, and more secure sources of energy,” Pompeo said in a statement.

With a hand-delivered letter, the U.S. is the first nation to pull out of the deal. Agreement rules prevented any country from pulling out in the first three years after the Nov. 4, 2016, ratification.

President Donald Trump has been promising withdrawal for two years, but Monday was the first time he could actually do it.

Trump’s decision was condemned as a reckless failure of leadership by environmental experts, activists and critics such as former New York City Mayor Michael Bloomberg.

“Donald Trump is the worst president in history for our climate and our clean air and water,” said Michael Brune, the executive director of the Sierra Club. “Long after Trump is out of office, his decision to withdraw the United States from the Paris Agreement will be seen as a historic error.”

The agreement set goals of preventing another 0.9 degrees (0.5 degrees Celsius) to 1.8 degrees (1 degree Celsius) of warming from current levels. Even the pledges made in 2015 weren’t enough to prevent those levels of warming.

The deal calls for nations to come up with more ambitious pollution cuts every five years, starting in November 2020. Because of the expected withdrawal, the U.S. role in 2020 negotiations will be reduced, experts said.

Climate change, largely caused by the burning of coal, oil and gas, has already warmed the world by 1.8 degrees (1 degree Celsius) since the late 1800s, caused massive melting of ice globally, triggered weather extremes and changed ocean chemistry. And scientists say, depending on how much carbon dioxide is emitted, it will only get worse by the end of the century, with temperatures jumping by several degrees and oceans rising by close to 3 feet (1 meter).

Trump has been promising to pull out of the Paris deal since 2017, often mischaracterizing the terms of the agreement, which are voluntary. In October, he called it a massive wealth transfer from America to other nations and said it was one-sided.

That’s not the case, experts said.

For example, the U.S. goal — set under President Barack Obama — had been to reduce carbon dioxide emission in 2025 by 26% to 28% compared with 2005 levels. This translates to about 15% compared with 1990 levels.

The European Union’s goal was to cut carbon pollution in 2030 by 40% compared with 1990 levels, which is greater than America’s pledge, said Rob Jackson, a Stanford University professor and chairman of the Global Carbon Project. The United Kingdom has already exceeded that goal, he said.

“The U.S. agreement is not a tax on the American people. There is no massive wealth transfer,” said Climate Advisers CEO Nigel Purvis, who was a lead State Department climate negotiator in the Clinton and George W. Bush administrations. “In fact, the agreement obligates no country to make any financial payments.”

Pompeo said U.S. net greenhouse gas emissions dropped 13% from 2005 to 2017 “even as our economy grew over 19 percent.”

Then, in 2018, carbon dioxide emissions increased 2.7%, according to the Energy Information Administration, mostly due to extreme weather and the economy. This could lead to more nations turning their back on efforts to slow down an ever warming world, experts said.

“The Trump administration’s abandonment of action on climate change gives other countries an excuse not to act either. They ask — if the richest country, the one that has contributed the most to the load of greenhouse gases in the atmosphere, isn’t willing to act, why should we?” said Michael Gerrard, who heads Columbia Law School’s climate change legal center. “If someone other than Donald Trump is elected, he or she will almost certainly rejoin Paris, and the rest of the world will welcome us back with open arms.”

Noam Chomsky: ‘We’re Actually Facing a Constitutional Crisis’

Noam Chomsky may be 91 years old, but the man who The Intercept’s Mehdi Hasan calls “the most cited author alive” is in no danger of slowing down. As a linguist and activist, Chomsky has spoken out against American imperialism and for leftist causes since the 1960s. While he continues to do so during the Trump administration, that doesn’t mean his opinions can be pigeonholed — he’s equally tough on Democrats who fail to stand up to President Donald Trump and for progressive policies as he is on Republicans who prop up his presidency.

Chomsky may have a long history with these issues, but that history allows for nuance and for him to occasionally change his mind. He spoke with Hasan on the Deconstructed podcast, covering everything from withdrawing American troops in Syria, the odds that Trump will actually be impeached, the radicalization of the Republican Party, Bernie Sanders and much more.

When it comes to Syria, Chomsky is opposed to Trump’s decision to withdraw American troops. As he explained to Hasan, “A small U.S. contingent with the sole mission of deterring a planned Turkish invasion, which was obvious, is not imperialism.” Quite the opposite, he continues, “It’s protecting the Kurds from an expansion of the atrocities and massacres that [Turkish President Recep Tayyip] Erdogan has been carrying out both within Turkey itself and in the areas of Syria that he’s already conquered.”

On impeachment, Chomsky is frustrated that it took Trump asking Ukraine to investigate the Bidens before the Democrats would consider impeachment. “We’re actually facing a constitutional crisis,” Chomsky explained, referring to our current political moment.

However, “they’re going after Trump not on his major crimes but because he went after a leading Democrat,” he points out, before relating the situation back to Richard Nixon, asking, “Does that remind you of anything? Yes. Watergate. They didn’t go after Nixon on his major crimes. They were off the record. It was because he had attacked the Democratic Party.”

Chomsky is also suspicious that the impeachment inquiry will actually result in removing Trump from office. If anything, he explains, it will only make him stronger among his base:

What’ll happen is probably the House will impeach, goes to the Senate. The Republican senators are utterly craven. They’re terrified of Trump’s voting base. So they’ll vote to turn down the impeachment request. Trump will come along, say I’m vindicated. Say it was the Deep State and the treacherous Dems trying to overturn the election. Oh, vote for me.

He also believes that the current direction of the Republican Party shouldn’t come as a surprise:

That’s part of the problem of the Republican Party. Its primary constituency is extreme wealth and corporate power. Those are the ones they serve.

It’s increasingly becoming the case that a very small sector of voters, maybe 20% or so, who are white, often white nationalist, Christian, often evangelical, traditional, older, less educated, rural, can actually run the country.

As for the 2020 Democratic candidates, Chomsky is lukewarm toward Elizabeth Warren and more enthusiastic about Bernie Sanders:

I think [Warren] seems to me quite honest. I think many of her plans are perfectly reasonable. She’s working with quite serious economists, some of them friends. But she doesn’t pretend to be, to try, to hoping to institute radical institutional changes. Sanders does. Furthermore, she has not organized a mass political movement which Sanders did. And it’s had a lot of effect. That’s how you get people in Congress like [Rep. Alexandria] Ocasio-Cortez and others because of this movement.

Listen to the full interview here.

 

Appeals Court Agrees Trump Tax Returns Can Be Turned Over

NEW YORK — President Donald Trump’s tax returns can be turned over to New York prosecutors by his personal accountant, a federal appeals court ruled Monday, leaving the last word to the Supreme Court

The decision by the 2nd U.S. Circuit Court of Appeals in Manhattan upholds a lower court decision in the ongoing fight over Trump’s financial records. Trump has refused to release his tax returns since he was a presidential candidate, and is the only modern president who hasn’t made that financial information public.

In a written decision, three appeals judges said they only decided whether a state prosecutor can demand Trump’s personal financial records from a third party while the president is in office.

The appeals court said it did not consider whether the president is immune from indictment and prosecution while in office or whether the president himself may be ordered to produce documents in a state criminal proceeding.

“We hold that any presidential immunity from state criminal process does not bar the enforcement of such a subpoena,” 2nd Circuit Chief Judge Robert A. Katzmann wrote.

According to the decision, a subpoena seeking Trump’s private tax returns and financial information relating to businesses he owns as a private citizen “do not implicate, in any way, the performance of his official duties.”

“We are not faced, in this case, with the President’s arrest or imprisonment, or with an order compelling him to attend court at a particular time or place, or, indeed, with an order that compels the President himself to do anything,” the 2nd Circuit said. “The subpoena at issue is directed not to the President, but to his accountants; compliance does not require the President to do anything at all.”

Several weeks ago, U.S. District Judge Victor Marrero in Manhattan tossed out Trump’s lawsuit seeking to block his accountant from letting a grand jury see his tax records from 2011.

Manhattan District Attorney Cyrus R. Vance Jr. sought the records in a broader probe that includes payments made to buy the silence of two women, porn star Stormy Daniels and model Karen McDougal, who claim they had affairs with the president before the 2016 presidential election. Trump has denied them.

Danny Frost, a spokesman for Vance, declined to comment.

The lawyer who argued the case on Trump’s behalf before the appeals court did not immediately respond to a message seeking comment.

During oral arguments, Trump’s lawyer told the 2nd Circuit that Trump is immune from state criminal law even if he shoots someone because he’s president.

Vance’s attorneys have argued that Trump is not above the law while the president’s lawyers have said the Constitution prohibits states from subjecting the U.S. president to criminal process while he is in office.

In the subpoena to Trump’s longtime accountant, Vance’s lawyers call for financial and tax records of entities and individuals, including Trump, who engaged in business transactions in Manhattan.

The 2nd Circuit noted that Trump has not been charged with a crime, but his lawyers have acknowledged that he could be criminally prosecuted after he leaves office.

“Even assuming, without deciding, that a formal criminal charge against the President carries a stigma too great for the Constitution to tolerate, we cannot conclude that mere investigation is so debilitating,” the appeals court said. “There is no obvious reason why a state could not begin to investigate a President during his term and, with the information secured during that search, ultimately determine to prosecute him after he leaves office.”

Trump’s lawyers have said the probe by Vance, a Democrat, is politically motivated.

U.S. Justice Department lawyers in Washington also urged the 2nd Circuit to reverse the findings of the lower court, saying Vance must prove “particularized need” for the records before they are released to a grand jury.

Vance’s investigation comes as the president faces impeachment hearings initiated by House Democrats after the president tried to get Ukraine’s leader to investigate his political rival Joe Biden.

The GM Strikes Set the Stage for a Nationwide Workers’ Revolt

Signs of a resurgent American labor movement are all around us, with no better example than the 40-day General Motors strike that began Sept. 16 and lasted well through October. While GM recovered after filing for bankruptcy in 2009, with the help of its workers and government bailouts, many of the American company’s employees have not felt the impact despite a booming economy.

After the 2008 financial crisis, autoworkers allowed adjustments to their contracts to help the automotive company get back on its proverbial feet, including “pay caps, a two-tier pay scale and [allowing] GM to hire temporary workers who wouldn’t have job security or benefits.” A decade later, to signal that they have grown tired over working conditions that do not reflect the company’s billions in profits, 49,000 autoworkers in GM plants across the U.S. went on a strike led by the United Auto Workers (UAW) union. The walkout became the largest and longest strike at the auto giant in several decades.

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As labor reporter Steven Greenhouse told Amy Goodman on DemocracyNow! during the protests, “The workers are saying, you know, ‘What gives? We, the workers, we, the U.S. taxpayers, saved GM. So why is it closing important plants in the U.S., like the Lordstown plant [in Ohio], while keeping plants running in Mexico that make the same thing?’ So, they just — I think it’s basically a sense of … ‘We helped you. We went the extra mile for you, GM. And now we want you to be fair to us.’ It’s really a strike over fairness and being treated with the respect they feel that they deserve.”

According to UAW, GM wages have not kept up with inflation, but last year it gave its CEO, Mary Barra, a whopping $22 million, while also being exempt from paying federal taxes. Planned plant closures in the U.S., proposed changes in their health care plans and an ever-increasing number of temp workers also added to autoworkers’ many grievances. The protests made headlines all over, with many labor activists showing their solidarity with the historic walkout. Several 2020 Democratic presidential hopefuls such as Bernie Sanders, Elizabeth Warren and Joe Biden also showed their support, with all three frontrunners, among others, joining the picket line.

So what did the strikers win on Oct. 25 after weeks of a walkout that had many of them dipping into their own savings to get by? In short, a lot, according to the Guardian:

“They did pretty well,” said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, based in Ann Arbor, Michigan. “They got more money. They got a pathway to regular employment for temporary workers. They defended their health care” when GM was seeking to sharply increase the premiums the United Automobile Workers (UAW) members paid.

The GM workers also received an $11,000 signing bonus, and the automaker agreed to essentially end its two-tier wage system by folding the lower tier into the top tier within four years. All those workers, lower-tier and top, will earn $32 an hour at contract’s end – some lower-tier workers now earning less than $20 an hour.

Dziczek added that the UAW failed to win any additional job security measures and failed to achieve one of its primary goals: reopening an assembly plant in Lordstown, Ohio. The union did, however, persuade GM to reverse plans to close its Detroit-Hamtramck plant, which had been scheduled to close in January. GM plans to invest $3 billion in overhauling that plant.

This, however, isn’t the first (and most likely not the last) time that GM employees used protests to negotiate with their employer. A piece in Jacobin tells the story of the first time, in 1936, GM workers went on strike to protest dire labor conditions.

Back in 1936, workers at GM’s plants in Flint, Michigan had it rough. They were subject to constant speedups in production, taking a toll on their bodies and spirits. … The average worker was taking home about $900, about half of what the federal government determined was necessary to provide for a family of four that year. Rather than pay their workers adequate wages, GM spent money on detectives hired to spy on workers and root out union organizers. The company also conscripted the Black Legion — a right-wing vigilante group that had broken from the KKK and counted as its enemies Jews, Catholics, blacks, and labor unions — to intimidate troublemaking workers. (This wasn’t GM’s only tie to fascists: in 1935, it supplied the Third Reich with military vehicles.)

The newly minted UAW took note of the dissatisfaction in Flint, and seized the opportunity and began organizing workers into the union.

While the labor movement was weakened in subsequent years, most notably under President Ronald Reagan who sought to break up unions, in recent years as unemployment has plummeted and the U.S. economy surged, workers are becoming increasingly conscious of the inequality plaguing the nation as corporate bosses reap the great majority of the benefits of their labor. The GM strike is only one of many strikes that have been taking place across the U.S. in recent years, including teachers and fast-food workers in states like Illinois, Kansas, Ohio and more.

With their recent strike, GM workers not only obtained better work contracts for themselves while setting the tone for negotiations throughout the auto industry, they also set an example for other American workers struggling against the same issues they faced. For continuing the rekindling of the U.S. labor movement through their activism and setting the stage for a nationwide workers’ revolt, the GM strikers are our Truthdiggers of the month.

Hundreds of Millions of Us Now Live in Danger of Flooding

Researchers have taken a closer look at estimates of coastal land height – and found that the numbers of people already at risk from sea level rise driven by global heating have multiplied threefold.

More than 100 million people already live below the high tide line, and 250 million live on plains that are lower than the current annual flood heights. Previous estimates have put these numbers at 28 million, and 65 million.

And even if the world takes immediate drastic action and reduces greenhouse gas emissions by the end of the century, at least 190 million people will find themselves below sea level.

If the world’s nations continue on the notorious business-as-usual track and go on burning ever greater volumes of fossil fuels, then around 630 million will, by the year 2100, find themselves on land that will be below the expected annual flood levels.

Protection in question

“These assessments show the potential of climate change to reshape cities, economies, coastlines and entire global regions within our lifetime,” said Scott Kulp of Climate Central, who led a study published in the journal Nature Communications.

“As the tideline rises higher than the ground people call home, nations will increasingly confront questions about whether, how much, and how long coastal defences can protect them.”

At the heart of the new research is a revised estimate of what constitutes sea level, and how it should be measured. Individuals and communities find out the hard way how the highest tides can rise to poison their farmlands with salt and wash away the foundations of their homes.

But the big picture – across nations and regions worldwide – is harder to estimate: for decades researchers have relied on satellite readings, confirmed by flights over limited spaces with radar equipment.

“There is still a great need for . . . more accurate elevation data. Lives and livelihoods depend on it”

But space-based readings by Nasa’s radar topography programme tend to be over-estimates, the researchers argue. That is because the technology measures the height of the first reflecting surface the radar signal touches. In open country, this may not matter. But forests and high buildings in densely-peopled cities distort the picture.

In parts of coastal Australia, and using a new approach, the researchers found that satellite readings delivered over-estimates of 2.5 metres. So global averages in the past have over-estimated, by around 2 metres, the elevation of lands that are home to billions.

Research of this kind helps clarify the challenge that faces governments, civic authorities and private citizens: communities grow up along low-lying coasts and estuaries because these provide good land, reliable water supplies and easy transport. But the catch with flood plains is that, sooner or later, they flood.

The repeated evidence of a decade of climate science is that floods will become more devastating, more frequent and more prolonged for a mix of reasons.

Multiple risks

Soils will subside because of the growing demand for groundwater and for clays and stone for bricks and mortar; because global average temperatures will rise and oceans expand as they warm; glaciers will melt and tip more water into the sea to raise ocean levels; and tropical cyclones will become more intense to drive more destructive storm surges.

Researchers have already warned that sea level rise could be accelerating, to bring more flooding to, for instance, the great cities of the US coasts, while some cities can expect ever more battering from Atlantic storms.

Coastal flooding is likely to create millions of climate refugees even within the US, and the worldwide costs of coastal flooding could reach $1 trillion a year by the end of the century.

The latest study confirms that the hazards are real, and may have so far been under-estimated. The researchers calculated that, in parts of China, Bangladesh, India, Vietnam and Thailand, places now home to 237 million people could face coastal flooding every year by 2050 – a figure 183 million higher than previous estimates.

U.S. coasts threatened

The same study highlights faulty estimates of ground elevation even in the richest and most advanced nations. In some parts of the crowded coastal cities of New York, Boston and Miami, for instance, the researchers believe satellite readings have over-estimated ground height by almost five meters. They say their new approach reduces the margin of error to 2.5 cms.

Right now, around a billion people live on lands less than 10 meters above high tide levels. Around 250 million live within one meter above high tide.

“For all of the critical research that’s been done on climate change and sea level projections, it turns out that for most of the global coast we didn’t know the height of the ground beneath our feet,” said Benjamin Strauss, president and chief scientist of Climate Central, and co-author.

“Our data improves the picture, but there is still a great need for governments and insurance companies to produce and release more accurate elevation data. Lives and livelihoods depend on it.”

Why Was a Mother Charged Nearly $1 Million for a Premature Birth?

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Lauren Bard opened the hospital bill this month and her body went numb. In bold block letters it said, “AMOUNT DUE: $898,984.57.”

Last fall, Bard’s daughter, Sadie, had arrived about three months prematurely; and as a nurse herself, Bard knew the costs for Sadie’s care would be high. But she’d assumed the bulk would be covered by the organization that owned the hospital where she worked: Dignity Health, whose marketing motto is “Hello humankindness.”

She would be wrong.

Bard, 30, had been caught up in an unforgiving trend. As health care costs continue to rise, employers are shifting the expense to their workers — cutting back on what they’ll cover or pumping up premiums and out-of-pocket costs. But a premature baby, delivered with gaspingly high medical claims, creates a sort of benefits bomb, the kind an employer — especially one funding its own benefits — might look for a way to dodge altogether.

Bard, distracted by her daughter’s precarious health and her own hospitalization for serious pregnancy-related conditions, found this out the hard way. Her battle against her own employer is a cautionary tale for every expectant parent.

Bard’s saga began, traumatically, when she gave birth to Sadie at just 26 weeks on Sept. 21, 2018, at the University of California, Irvine Medical Center in Southern California. Weighing less than a pound and a half, tiny enough to fit into Bard’s cupped hands, Sadie was rushed to the neonatal intensive care unit. Three days after her birth, Bard called Anthem Blue Cross, which administers her health plan, to start coverage. Anthem and UC Irvine’s billing department assured her that Sadie was covered, Bard said.

But Dignity’s plan, like many, requires employees to enroll newborns within 31 days through its website, or they won’t be covered — something Bard said she didn’t know at the time.

Meanwhile, believing that everything with her health benefits was on track, Bard spent nine of those first 31 days recovering in her own hospital bed and then had to return to the emergency room because of a subsequent infection. She spent as much time as she could in the neonatal intensive care unit, where Sadie, in an incubator, attached to tubes and wires, battled a host of critical ailments related to extremely premature birth. At times, doctors gave her a 50-50 chance of survival.

“Right from birth she was a fighter,” Bard said.

Then, eight days past the 31-day deadline, UC Irvine’s billing department alerted Bard to a problem with Sadie’s coverage. Anthem was saying it could not process the claims for the baby, who was still in the NICU.

Bard, an emergency room nurse at St. Bernardine Medical Center in San Bernardino, called Dignity’s benefits department and made a sickening discovery. Sadie wasn’t enrolled in its health plan. It was too late, she was told, she could no longer add her baby.

Dignity bills itself as the fifth-largest health system in the country, with services in 21 states. The massive nonprofit self-funds its benefits, meaning it bears the cost of bills like Sadie’s. And it doesn’t appear to be short on cash. In 2018, the organization reported $6.6 billion in net assets and paid its CEO $11.9 million in reportable compensation, according to tax filings. That same year, more than two dozen Dignity executives earned more than $1 million in compensation, records show.

Dignity is also a religious organization that says its mission is to further “the healing ministry of Jesus.” Surely, Bard remembering thinking, they would show her compassion.

With the specter of the bills hanging over her, Bard said she literally begged Dignity to change its mind in multiple phone calls, working her way up to supervisors. She thought she’d enrolled Sadie by calling Anthem she told them. It was an innocent mistake.

The benefits representatives told her information about the 31-day rule was in the documents she received when she was hired. It didn’t matter that it was six years earlier, long before she dreamed of having Sadie, she said. The representative also told her it wasn’t just Dignity’s decision, the Internal Revenue Service wouldn’t allow them to add the baby to the plan.

Under Dignity’s plan, Bard could have two written appeals. She got nowhere with either of them. “IRS regulations and plan provisions preclude us from making an enrollment exception,” Dignity wrote in its Nov. 30, 2018, response to her first appeal.

IRS officials said they can’t talk about specific cases because of privacy issues and could not comment in general in time to meet ProPublica’s deadline.

Dignity rejected Bard’s second written appeal in a July 8 letter, saying the deadline was included in a packet sent nine days before Sadie’s birth. But at that time, Bard had already been admitted to the hospital because of complications. Dignity’s letter said it “cannot make an exception to plan provisions.”

But the federal regulator of Dignity’s plan said such plans can, in fact, make exceptions. An official with the federal Labor Department, which regulates self-funded health benefits, told ProPublica that plans can make concessions as long as they apply them equally to participants. Plus, federal law allows plans to treat people with “adverse health factors” more favorably, the official said.

Bard scrambled, futilely, to see if any publicly funded insurance plan would be able to cover the costs. Meanwhile, the bills began arriving: $206 in November, $1,033 in January, $523 in February and $69,362 in April, with the biggest yet to come. Sadie had spent 105 days in the hospital and had several surgeries — and the bills would be Bard’s alone.

Sadie’s total hospital tab was nearing $1 million and climbing when ProPublica first spoke to Bard. “I’ll either work the rest of my life or file for bankruptcy,” she said.

Bard said she and her fiancé — Sadie’s father, Nathan Benton — considered delaying their wedding so he wouldn’t be legally saddled with the bills as well.

The looming debt, and her employer’s rejection, sent Bard reeling when she was already suffering from postpartum depression. She went back to her job while worrying that she might lose her home in Norco. She wept and beat herself up again and again about missing the deadline: How could she not think of something like that? She should’ve known. She should’ve been on top of it more.

Anthem declined to comment for this story. UC Irvine, where Bard said the care was excellent, said that cases like Bard’s are unusual but may happen in 1% to 2% of births. The hospital tries to work with patients when they get stuck with the bills, a UC Irvine spokesman said.

With the appeals exhausted, the $898,000 bill landed. Bard could see right away that handling it the typical way, with a payment plan, was not going to work. If she chipped away at it at $100 a month, settling the obligation would take more than 748 years. “It would take so long I’d be dead,” Bard said.

Bard could see no way out. On Oct. 7, she posted a photograph of the $898,000 bill on Facebook. “When Dignity Health (the company I work for) screws you out of your daughter’s insurance…” she wrote.

A week later, ProPublica, which had been flagged to Bard’s case while reporting about health insurance excesses, contacted a Dignity media representative.

The next day, Bard got a call from the senior vice president of operations for Dignity Southern California, who apologized and said she’d heard about the situation from the organization’s media team and would help. Two days later, Dignity added Sadie to the plan, retroactive to her birth date. It would cover the bills.

Dignity officials told ProPublica that they’d learned about Bard through her Facebook post. Bard said she doubts Dignity would have reversed course without the questions from ProPublica.

Dignity said in a statement that it would review how it could better educate new parents about the enrollment requirement. But Bard still wants to know why her employer would make her suffer through such an ordeal. In a letter Bard received last week, the Dignity benefits department said it had received additional information that caused it to reverse course, but it appears to be the same information that Bard had been telling it all along.

“We based this new decision on certain extenuating and compelling circumstances, which, in all likelihood prohibited you from enrolling your newborn daughter within the Plan’s required 31-day enrollment period,” the letter said.

Bard recognizes a dark irony in her Christian employer’s behavior, and it’s made her skeptical. She urged the benefits department to change its process so other employees don’t also have their benefits denied. Dignity needs to put its own ideals into practice, she told ProPublica. “You can’t put on this facade,” Bard said. “You have to live it. You have to walk the walk.”

Bard said she and Benton still don’t know the final total for Sadie’s care. But they sometimes call the sassy and dimpled 1-year-old, who is healthy and reaching developmental milestones, their “million-dollar baby.”

Has your employer wrongly denied your health benefits? Please share your story with reporter Marshall Allen at marshall.allen@propublica.org. Have you worked in health insurance or employer-sponsored health benefits? ProPublica is investigating the industry and wants to hear from you. Please complete our brief questionnaire.

Bernie Sanders Takes Aim at Elizabeth Warren’s Medicare for All Plan

Sen. Bernie Sanders said Sunday that his plan to finance Medicare for All is “much more progressive” than the pay-for released last week by his 2020 Democratic presidential rival Sen. Elizabeth Warren, who called for a head tax on employers and new levies on the wealthy as key parts of her proposal to fund a comprehensive single-payer system.

In an interview with ABC News, Sanders warned Warren’s proposed head tax—which she terms an “employer Medicare contribution”—could harm workers’ wages and suppress job growth.

“I think that that would probably have a very negative impact on creating those jobs, or providing wages, increased wages and benefits for those workers,” Sanders said. “So I think we have a better way, which is a 7.5% payroll tax, which is far more I think progressive, because it’ll not impact employers of low-wage workers but hit significantly employers of upper-income people.”

“The function of healthcare is to provide healthcare to all people, not to make $100 billion in profits for the insurance companies and the drug companies,” said the Vermont senator. “So, Elizabeth Warren and I agree on that. We do disagree on how you fund it. I think the approach that [I] have, in fact, will be much more progressive in terms of protecting the financial well-being of middle income families.”

In a white paper (pdf) released in April after the introduction of the Medicare for All Act of 2019 in the Senate, Sanders proposed a 7.5% payroll tax on employers that would exempt the first $2 million in payroll “to protect small businesses.”

On Friday, Matt Bruenig of the left-wing People’s Policy Project think tank similarly argued that a payroll tax would be significantly more progressive than Warren’s proposed head tax.

“Under the 8 percent employer-side payroll tax, the employer taxes paid for a worker earning $15,000 per year is $1,200, while the employer taxes paid for a worker earning $200,000 per year is $16,000,” Bruenig wrote. “Under the $9,500 employer-side head tax, the employer taxes paid is $9,500 for both workers.”

Sanders’ remarks to ABC were his first public comments on Warren’s 9,000-word proposal. The Vermont senator said he spoke to Warren on the phone after she released her plan last Friday.

Asked about Sanders’ criticism of her plan, Warren said Sunday that “Bernie may have a different vision of how to pay for it, but let’s be really clear: Bernie and I are headed in exactly the same direction.”

“And that is the $11 trillion that families are going to pay over the next 10 years in out-of-pocket medical costs will go away,” said the Massachusetts senator. “Bernie and I, we’re out there for strengthening America’s middle class. I love it.”

Criticize But Don’t Demonize China

GUANGZHOU, China — This week, the Berggruen Institute’s 21st Century Council met with Chinese President Xi Jinping in Beijing and then gathered in this city-region of 22 million inhabitants for the fourth “Understanding China” conference. The theme this time was China’s plans for the next phase of “reform and opening up” and what the Chinese leader calls “the new globalization.”

In his opening remarks, Xi framed the discussion. “You can’t understand China,” he said, “unless you understand its path to development, which is linked to globalization. China will never close its opening to the world.”

Zhu Min, a former deputy managing director of the International Monetary Fund, laid out China’s reading of where things are headed amid the trade turmoil with the U.S. He noted that the 25 percent tariffs across around 90 percent of China’s exports to America are at a level unprecedented even in the 1930s.

Yet, the U.S. trade deficit has nonetheless increased while China’s trade volume has further expanded. China’s exports, Zhu reported, have actually risen as “trade is redistributed” to Mexico, Canada, Vietnam and Europe. China’s economy is still growing at more than 6 percent — less than the double-digit growth of the early days of “reform and opening up,” but across an economy that is several times larger. And that growth, his analysis shows, is a result of the recomposition of the economy in which consumption accounts for more than half of GDP, while services are growing and manufacturing shrinking.

However, Zhu warned, the trade war has had a greater negative impact on global growth because of the uncertainties that abound. Since companies cannot plan ahead with confidence and organize reliable supply chains with any certainty, investment has stalled. Falling investment, he emphasized, has always been a leading indicator of a coming global recession.

Ernesto Zedillo, the 21st Century Council president and former president of Mexico, came out swinging at America’s unilateral imposition of tariffs, calling them illegal under World Trade Organization rules. He urged Europe and the rest of the WTO members to band together to press for their removal and punish the U.S. Otherwise, we will return to “the law of the jungle” in which the most powerful nations pursue advantages over all others instead of a “rules-based system” that’s fair for all.

Zhu acknowledged that there was no turning back to the previous tone and tenor of U.S.-China relations after the “Trump bump,” not least because the leading Democratic contenders for the American presidency harbor many of the same anti-China sentiments as the current administration. We are headed, he said, into a paradigm shift — a “new normal” — that will be very different from the past three decades.

In my remarks, I argued that this new normal would be characterized by a protracted “duality” in relations in which conflict and cooperation will coexist. Though there is likely to be some deal in the coming weeks or months over conventional trade in commodities like soybeans, the most consequential issue — the race for technological dominance — will not be resolved anytime soon, if ever.

The central project of modern China, and in particular Xi’s “national rejuvenation,” is to never again fall behind the West in technological achievement, as it did in the 19th and early 20th centuries, which invited imperial domination. Yet, today’s information technology, especially artificial intelligence, is not just another factor of production like machine tools. It is about the use of data and the control of information and free expression. Though the West is itself engaged in an internal debate over privacy and surveillance capitalism, there is nonetheless a sharp political and cultural divergence over core values between East and West.

At the same time, accelerating climate change demands common urgent action that will have to be taken up by “networks of the willing” even though the U.S. has formally withdrawn from the Paris climate accord.

Conflict is therefore as inexorable as cooperation is imperative.

What this entails in practice is a “partnership of rivals” around the convergent interest of climate action even as relations deteriorate in other realms. Cooperation on climate cannot mean that the West should remain silent on Beijing’s erosion of autonomy in Hong Kong or on the “reeducation camps” for Muslim Uighurs. The West must call China out on those issues, but by taking a stand, not taking sides. We should criticize, not demonize, China.