Tuesday, July 5, 2016
Sunday, June 12, 2016
Lawrence Summers is a super-star of bourgeois economics. He has held leading positions at the World Bank, the US Treasury Department, and most recently in the Obama Administration. Besides teaching and administrative posts, he has consulted and worked for financial institutions. His advice has been sought by governments and corporations. And he doesn’t shy away from contrarian positions.
Since the 2008 crash, mainstream economists have retracted their worst fears to now characterize the event as an unusually sharp downswing in the business cycle. Of course economists were then scrambling to explain the virtual collapse of the financial sector, the panic, and the evaporation of trillions of nominal dollars.
At the time, there was a general despair, a widespread sense of impending doom. But with fading memory, economists have reconstructed the event as a severe, but manageable (and managed) periodic adjustment to the normal course of capitalism.
In the wake of the crash, commentators have acknowledged a slow “recovery,” but nonetheless concur that the global economy is back on course.
Summers dissents from this view, as he should.
For Summers, stubbornly weak productivity, long-term low, negative interest rates, sluggish growth, deflationary episodes and other economic shortcomings are signs of something chronically wrong with the global economy, something more systemic than the ordinary business cycle. He sees the economy caught in a rut (to borrow an expression from a Bloomberg Businessweek article), a rut of “secular stagnation.” Now “secular stagnation” is an old term Summers appropriates from Great Depression era economist Alvin Hansen, who saw the period after the 1929 crash as one of chronic economic malaise.
In a period of serious intellectual denial, injecting Hansen’s observation into the current discussion is a radical move. It challenges the notion that the economy is healthy; it challenges the notion that the economy is self-correcting (given a little tune up!); and it challenges the notion that the current course of monetary manipulation (ultra-low interest rates) will be sufficient stimulus to overcome the inertia of eight years of low, faltering growth.
Summers, instead, argues that “secular stagnation” is the new normal-- a kind of stunted-growth equilibrium. For the world economy, this means insufficient growth to raise living standards, attack inequality, support investment, and maintain and improve infrastructure. As for capturing and describing the current state of the global economy, Summers’ snapshot is not too far off the mark: global economic activity has been tepid since the twenty-first century crash.
But as it stands, it’s just a snapshot-- a perhaps accurate observation-- and not a theory. Of course it’s a far more accurate depiction of the world economy than that of most of his colleagues who see recovery unfolding. To assert a theory, Summers needs an independent variable-- a cause or set of causes-- that account for the prevalence of “secular stagnation.” He needs an explanatory account that reveals how “secular stagnation” came to plague the global economy.
He believes he has located that independent variable, the cause of “secular stagnation,” in an insufficient demand for goods and services and an accompanying propensity to save rather than invest.
Explanations of this sort are not new, either. They became common after the Great Depression and under the influence of John Maynard Keynes’ work. Since that time, Say’s Law, the purported universal law that the supply of all goods and services will find a market-clearing level of demand, has been discarded by nearly all economists (of course Marx challenged Say’s Law nearly a century before! And Malthus before him!). Academic economists, as well as many latter-day Marxists, fell under the spell of “underconsumptionism”-- the view that capitalist crises are generated by an imbalance between what the economy produces and what its consumers want or can afford. Accordingly, they attributed economic downturns to the lack of sufficient demand to support existing supply or the growth of supply.
Further, adherents to this theory attributed the post-World War II decades of relative economic stability to capitalist managers “solving” the problem of imbalance through various mechanisms: the welfare state, military spending, a contract between capital and labor, capitalist planning, state intervention, etc. All of these presumptive solutions to economic disruptions (or capitalist crisis) pre-suppose that the problem to be solved is insufficient demand.
This theory is attractive on several accounts. First, it is easy to understand: it recognizes a potential disparity within capitalism between the productive potential of the economy and the purchasing potential of consumers who are also exploited workers, a disparity that intuitively looks like a plausible problem for capitalism’s smooth operation.
Secondly, it is agreeable to all those who defend capitalism: for every shortfall in demand, there is a potential policy prescription that can inject demand into the economy in keeping with any and every political stripe. From war and military spending to massive government welfare or infrastructure spending, for fascism to left social democracy, there exists a remedy to insufficient demand. Until the stubborn “stagflation” of the 1970s, nearly all the politico-economic/ideological wars were fought over the best, most efficient, or socially just solutions to the problem of demand (including, I repeat, among many Marxists).
Thirdly, the “underconsumptionist” theory locates dysfunction-- crisis-- on the surface of the capitalist system and not in its deep structure. The analytic tools of bourgeois economics frame the dynamics of the system strictly in terms of the interaction of supply and demand. And these tools are most convenient and self-assuredly orthodox.
A Marxist Alternative
Marxism searches deeper into the structure of capitalism for its well spring; Marxism rejects the tools of bourgeois economics; Marxism understands capitalism, not as a system that might suffer disruptions, but one that must encounter crisis.
Thus, Marx and subsequent Marxist thinkers probed deeper into the capitalist mechanism to locate the fundamental process that powers capitalist production and reproduction. He discovered that fundamental process in accumulation, the socially and legally sanctioned distribution of a growing quantity of society’s wealth into the hands of those possessing or controlling the material means of production. Capitalism runs smoothly if and only if the process of accumulation functions well. Essential to its function is a robust exploitation of workers, the creators of society’s wealth; that is the “how” of accumulation. And, of course, the “what” of accumulation is profit or surplus value; that portion of society’s expanding wealth that ends up in the hands of the capitalists.
Thus, in our necessarily simplified account of accumulation and its central role in Marx’s theory of crisis, the harbingers of crisis are to be found in weak profits or impediments to exploitation. Unlike the episodic, periodic, and random economic disruptions caused by economic “overheating,” imbalances, corruption, or non-economic factors, systemic crises originate in the accumulation process. The necessity of capitalist crisis springs from the limitless acquisition of profits invariably outstripping the limited opportunities for investment and the further generation of profits. As Maurice Dobb explained, paraphrasing Marx: “...precisely because capitalist production is production for profit, 'overproduction of capital' becomes possible in the sense of a volume of capital accumulation which is inconsistent with the maintenance of the former level of profit.”
Systemic crises (e.g. 1929, 2008) usually arrive at a time of hyper-accumulation, with demand and investment bolstered by heightened borrowing. To accommodate a growing mass of capital (accumulated profits) in a context of limited or lower-yielding investment opportunities, greater risk is taken on. Excessive debt, precarious risk, and the prospect of even more debt and risk, is the recipe for a crash, a feature of systemic capitalist crisis. Either risk aversion sets in, leading to stagnation or economic retreat, or debt and risk continue growing toward unsustainable heights.
In the historic instances of systemic crisis, there is no evidence that a crash-- a severe economic decline-- is consistently preceded by or concurrent with a similar marked decline in demand. If the “underconsumptionist” theory were credible, a persistent or sharp decline in demand would be a causal antecedent of the crisis.
There was, however, an oversupply of capital seeking dwindling yield opportunities in the 2007-2008 bust. Many mainstream commentators noted the “search for yield” in the preceding period. It is this pressure on the rate of profit that signals the danger and potential for crisis. Of course the crisis-- the downturn-- reduces demand as a result of declining activity and unemployment; insufficient demand ensues, but does not cause a crisis. Summers’s demand-based causal explanation of what he calls “secular stagnation” fails to fit the facts.
That is not to deny, however, that generating new and greater demand-- stimulus-- plays a role in arresting the worst effects of economic decline. The 2009 stimulus packages (especially the massive investment programs in the PRC) generated enough activity to halt the further decline of global capitalism. However, it failed to correct the flaws in the accumulation process, flaws that are again coming into deepening crisis mode today: declining rates of productivity and profits, negative interest rates driving investors from safe havens, bloated debt (automobiles, student loans), and risky investment.
The history of the New Deal taught that public investment, as a remedy for private sector stagnation, can only substitute for the accumulation process and not restart it. The unexpected downturn of 1937-38 demonstrated that earlier public sector stimulation did not put capitalism back on its feet and, without further public investment, the system would again falter. And only war preparation and the turn to a form of wartime state capitalism absorbed the unemployed and revitalized the accumulation process by war’s end.
Lawrence Summers stands apart from his colleagues who promote a pollyanna-ish story of economic recovery and prosperity. They tout an artificially ginned up stock market and a debt-inflated automobile bubble as signs of success, when the signs indicate the opposite. Mainstream economists hold their breath as profit rates, productivity gains, and employment growth steadily decline.
Summers, the alarmist, knows better. He sees a faltering economy, but his analysis, and prescriptions are faulty. The bromides sidestep the fundamental failure of the global economy, a failure embedded within the system and not resolvable short of replacing the system. Summers’ proposal of massive public investments in US infrastructure, green energy, and education are worthy demands. Rousing a political movement to fight for these demands would be a welcome development. It would take some of the sting out of capital’s imposed hardships as well. But it would not repair the accumulation process. It would not “fix” capitalism.
Thursday, May 19, 2016
Mainstream liberalism and its champions are part of the barren, bleak cultural and intellectual terrain left by decades of right-wing ascendency and left-wing retreat.
Discarding New Deal liberalism and its goal of guaranteeing minimal living standards, a measure of social warfare, and some class mobility, liberalism accepted the supremacy of the market and its blessing of the inevitability of inequality. The new gospel of liberalism announces that economic growth and market forces will provide for all if government only “incentivizes” the private sector. This ideology was embraced by the New Democrats who won the Democratic party during and after the Reagan years.
At the same time, the social base of the Democratic Party shifted, in the post-Watergate era, away from poor and working class voters, its traditional base through most of the twentieth century, toward professionals and middle strata in urban centers and suburban bedroom communities. Issues that troubled this increasingly dominant and influential segment pushed aside the New Deal and Great Society concerns: housing and de facto segregation, public education and educational inequality, institutional racism and sexism, deeply rooted poverty and its consequent social dysfunctions, jobs, union representation, health care, public assets and services, etc.
In place of these concerns, liberals and the Democratic Party emphasize obstacles that may obstruct the full realization of the “American Dream.” The liberal agenda today addresses “glass ceilings,” lifestyle choices, and other issues that impact the safety, security, and freedom of the middle and upper-middle strata. Those falling below these markers are offered second-class schools, second-class health care, second-class neighborhoods, and second-class services. Modern liberals have shrewdly obscured this shift by creating an artificial class-- the “middle class”-- that purports to include hospital workers, food service workers, and sweatshop workers in the same class with doctors, lawyers, and financial managers. For those left out of this broad, meaningless class, the Democratic Party offers the fruits of volunteerism and charitable giving as expressed in its 2012 platform.
It is, therefore, no surprise that there is a growing distance between liberals and the Democratic Party, on one side, and the vast majority of US working and poor people who have been battered and made insecure by the economic crisis that came to a head in 2008. The 2016 primary elections and the rise of both Bernie Sanders and Donald Trump demonstrate this divide, though mainstream liberals are dismissive of both.
A recent column by long-time The Nation columnist, Katha Pollitt (Why Didn’t Bernie Get Me, May 23-30, 2016) illustrates this widening division. It must be said that Pollitt is a long-standing liberal and one who, in the past, often supported the Old Democrats over the new breed. She concedes as much in a February column revisiting her past electoral choices. But as with other liberal pundits, the causes of the past do not fuel the passions of the present.
In an election year that has brought out the pitchforks and has seen insurgents take aim at the heart of the establishment of both political parties, Pollitt is oddly remote from the contests. In the opening paragraph of her commentary, she confesses “...I neglected to read the instructions on my absentee ballot, which clearly stated that it had to be post marked [by?] the day before the actual primary, and thus missed my chance to vote...” Apparently the stakes in the primary were not of any great consequence to Pollitt, at least not enough to focus her attention on casting a vote.
She goes on to explain why Bernie Sanders didn’t get the vote that she didn’t cast. First and foremost, Senator Sanders suffers from the affliction claimed of all those seeking to redirect the Democratic Party: a lack of “electability.” It’s truly a wonder how pundits can always diagnose this affliction in candidates that they do not like. It’s particularly a wonder with Bernie Sanders, who appears to be more “electable” against the likely Republican candidate than Hillary Clinton in virtually every poll taken.
But polls mean nothing, when your gut tells you something different. Especially if you warm up a tasteless stew of age-contempt, Red-baiting and fear-mongering: “I just don’t believe Americans are ready for a 74-year-old self-described socialist with a long far-left CV who would raise their taxes by quite a lot. By the time the Republicans get a hold of him, he’d be the love child of Rosa Luxemburg and the Ayatollah Khomeini, and then it’s hello, President Trump.”
I’m sure this snide remark would get an amused titter at liberal cocktail parties.
But for Pollitt, the real complaint is lack of a commitment to women’s rights. At the same time, she acknowledges that Sanders supports a “laundry list” of “causes dear to the heart of… feminists.” Further, she notes that Sanders “has a good voting record on those issues in Congress.”
So where lie his failings of commitment?
“There were all those little tells,” she says. Pollitt’s “tells” are those slights and nuances for which academic liberals have coined the term “micro-offenses.” Though Senator Sanders’ record is unimpeachable, Pollitt is skeptical of his heart. Because his word choice may have been, on occasion, questionable, because his staff may be gender and racially unbalanced, because some of his supporters may be brutish males, Pollitt can’t be sure of his sincerity.
This, coupled with a large dose of Trump-dread, denied Bernie Sanders the vote that Katha Pollitt forgot to cast, despite the fact that “... in important ways his politics are closer to mine [Katha Pollitt’s] than Hillary Clinton’s are, and his campaign for the White House is inspiring.”
This is liberalism without a soul, a personal politics that calculates “micro-offenses” with the same weight as the life-and-death issues that millions of poor and working class women and men face daily.
Katha Pollitt and other liberals, including Bernie Sanders, could further demonstrate that their commitment to women’s rights transcends a narrow, parochial vision or political opportunism by standing with others-- women and men-- against the coup in Brazil that stripped the country’s first woman President, Dilma Vana Rousseff of her position. A cabal of men organized this coup-- no doubt with US encouragement-- to deny her the term of service which she earned in the last elections. This outrage has yet to draw the attention of the US liberal mainstream.
Likewise, the vindictive indictment of Christina Kirchner, the ex-president of Argentina, on trumped-up charges has been largely met with indifference on the part of US liberals and feminists.
Where are you, Katha Pollitt and Bernie Sanders?
Friday, April 29, 2016
Fortunately, young activists have failed to learn the lessons accepted by many who have preceded them. For example, they fail to respect Hillary Clinton as the wife of “the first Black president.” Young African Americans have held her to the same standards applicable to white politicians who display racist code words. They do not accept that when Hillary or Bill lecture youth on Black “social predators” or defend Bill’s policies leading to the mass incarceration of Blacks that the Clintons are speaking as members of the family-- Uncle Bill and Aunt Hillary. Consequently, the power couple has been roughed up on the campaign trail when faced with reminders of earlier racial transgressions.
Therefore, it was necessary last week for the first real Black President to intercede with a lesson on the proper etiquette when addressing the wielders of power. While in London, Obama attended a town hall meeting of young people, and explained:
Too often what I see is wonderful activism that highlights a problem but then people feel so passionately and are so invested in the purity of their position that they never take that next step and say, ‘How do I sit down and try to actually get something done?’
Curiously, “getting something done…” would seem to be the task for legislators, for elected officials and not the activists “highlighting” problems. But Obama elaborates, drawing on his own experience as a “community organizer”:
You can’t just keep on yelling at them and you can’t refuse to meet because that might compromise the purity of your position… The value of social movements and activism is to get you at the table, get you in the room and then start trying to figure out how is this problem going to be solved.You then have a responsibility to prepare an agenda that is achievable, that can institutionalize the changes you seek, and to engage the other side, and occasionally to take half a loaf that will advance the gains that you seek, understanding that there’s going to be more work to do, but this is what is achievable at this moment.
Embedded in this lecture for young activists are the modern liberal values of deference to power, compromise, and incrementalism. These values are not the values that have inspired the more profound changes that have markedly advanced life in the US. These are not the values that inspired Thomas Paine, John Brown, Frederick Douglass, Eugene Debs, or Martin Luther King. These are not the values that demanded a Bill of Rights, ended slavery, built a labor movement, and ended institutional segregation. Demands, and not polite requests, inspired these fundamental improvements in the lives of the many. In fact, it was the opponents of change, in every case, who preached quietly sitting at the “table,” preparing an “agenda” and accepting “half a loaf.”
Activists need only reflect on the last seven years of the Obama administration to see the fruits of civil discourse, trusting power, and gaining polite access: endless wars, declining living standards, growing debt, housing crises, escalating racism, and eroded civil liberties-- in short, more of the same.
The liberal activist playbook has succeeded in accomplishing one thing for Obama and those who will follow him: it has successfully corralled many idealistic, energetic advocates for change, tamed them, and kept them firmly in the grip of the Democratic Party.
And Obama knows that holding serve, guaranteeing that his party and its corporate, pro-business candidate (Hillary Clinton) will gain the presidency, will require that another generation of young activists is similarly co-opted. The post-Sanders campaign to assimilate Sanders’ youthful followers is already underway, with party loyalists ginning up the “Stop Trump” hysteria.
While liberal angst over Trump will sway many, it’s important to remind the left that though Trump is a clownish Mussolini/Berlusconi-like reprobate, he is, in essence, an opportunist with no core ideology beyond power and attention. For that reason, he has alarmed the corporate elites who rule the Republican establishment. They fear his unpredictability and maverick views. He is shattering the unity of the party. The left should welcome that development.
Of course there should be no doubt as to which class Clinton wholeheartedly and reliably represents. If there was any doubt, the recent comments by ultra-conservative billionaire Charles Koch should have dispelled that notion. His carefully worded statements legitimized Clinton as an option in a field of unreliable conservative candidates whose unimpeachable corporate fealty is in question-- Clinton is the more corporate candidate. While liberal apologists scramble to prove that Koch did not endorse Clinton, they miss the point: she could be more acceptable than her rivals (because she is a proven corporate politician).
The big question remaining is what becomes of the admirable fire and brimstone conjured by the aging pied piper of social democracy, Bernie Sanders. As with earlier insurgencies fought within the Democratic Party and contained by the Democratic Party, this youthful movement may well be absorbed into the party. History and the left’s inability to cut the cord with the Democrats suggest that it will. After all, to effectively break the bondage imposed by the corporate Democrats only two options are available: shake loose the iron grip that corporate power maintains over the Democratic Party or reject two-party politics and build an independent movement. The former is popular, but a pipe dream; the latter is difficult, but the only viable option.
However, hope resides in a younger generation that both suffers greater burdens than any generation since the Great Depression and is largely oblivious to the scare-tactics of anti-Communism. The latest of several polls shows a significant and growing interest in socialism and an even greater rejection of capitalism. The Harvard University study of young adults between 18 and 29 found that 51% do not support capitalism. With the same group of respondents, 33% supported socialism. Of older respondents, a majority of support for capitalism could only be found among those fifty years old or older.
In a 2011 Pew Research Center poll, 49% of 18 to 29 year-olds had a positive view of socialism, a higher percentage than those with a positive view of capitalism.
Reporting the Harvard Survey in the Washington Post, author Amy Cavenaile is rankled by these results. She searches far and wide for an authority or a poll result that can diminish these findings. Accordingly, she finds Frank Newport, the editor-in-chief of Gallup, who opines: “Young people could be saying that there are problems with capitalism, contradictions… I certainly don’t know what’s going through their heads.”
Further disturbing to the author and other pundits, young people do not identify socialism with government regulation or government spending-- the establishment’s vulgar characterization of socialism-- but with “Basic necessities, such as food and shelter [and healthcare], are a right that the government should provide to those unable to afford them.”
Clearly, the seemingly unassailable truth of a few decades ago-- “there is no alternative”-- fails to resonate with recent generations. Shaping and sharpening a realizable vision of socialism for the latest generations is the most critical task before us.
Saturday, April 16, 2016
Intercept reports via Extra! that CBS CEO Les Moonves is ecstatic over the revenues flowing into entertainment coffers from the primary campaigns (I've never seen anything like this, and this is going to be a very good year for us.”). Moonves, the entertainment mogul, understands better than most the triumph of entertainment over substance, posture over issues; CBS and the other mega-corporations peddle reality television and tabloid news. So it's not surprising to see him hail the current electoral season's antics as special (“Man, who would have expected the ride we're all having right now? ...Who would have thought that this circus would have come to town?”). For Moonves and his ilk the more inanity and sensationalism, the more money flows into corporate coffers (“You know, we love having all 16 Republican candidates throwing crap at each other. It's great. The more they spend, the better it is for us...”).
But lost to many in the explosion of vulgarity and outrageousness is the strong and strengthening connection between the dominance of money-- big money-- and the increasing irrelevance of bourgeois democracy. Every election cycle ups the ante-- from millions to billions-- in competitions contested around increasingly marginal issues and massive doses of insincerity. Bourgeois democracy is to genuine people's democracy as “reality” television shows Survivor and Duck Dynasty are to the reality of working peoples' lives. The campaigns are driven not by political import, but by competitive entertainment value.
Of course the losers in this charade are working people, the poor, and minorities. Their representatives and institutions are dominated by liberals largely content with a slightly more humane, less nasty capitalism, though, sadly, elected liberals seldom deliver even that for them.
The capitulation to this bankrupt ideology of the traditional support system for working class and poor people-- unions, religious institutions, the Democratic Party, ethnic organizations, etc.-- explains, in no small part, the desperate turn to Trump. Tepid, aloof liberalism breeds desperate options like the outlandish Trump when conditions deteriorate sharply and no radical options appear available.
The always sharp Doug Henwood offers the “...proof that Democrats, especially liberal Democrats, are the cheapest dates around-- throw them a few rhetorical bones, regardless of your record, and they'll be yours to take home and bed.” (from his new book, My Turn, as quoted in the NYRB, 4-7-16)
No candidates promote this cynical behavior more consistently than the Clintons and their “New” Democrat acolytes.
That the Democratic Party selection process has been fixed against party insurgency since the overturn of the McGovern party reforms and the McGovern defeat of 1972 should be obvious to everyone. Nonetheless, the party's operatives and loyalist zombies will answer that the system forgoes undesirable electoral landslides like the one occurring in 1972. What they don't say is that McGovern lost overwhelmingly because these same party stalwarts failed to campaign for McGovern and mounted a stealth campaign to give away the election rather than support a leftward swing. In fact, the system is designed to stifle any inner-party rising like the one currently mounted by Bernie Sanders.
The fact that the other party felt no similar need to stack the deck accounts for the current anti-Trump hysteria in the Republican Party.
Consider the deck-stacking that makes a Sanders' victory just short of impossible: 719 super delegates loom over the process, a group made up largely of reliably centrist party hacks ready and willing to block insurgencies. Should the hacks stand as a bloc, they make it possible for a preferred candidate to win roughly 40% of the contested delegates and still gain the nomination.
The Democratic Party establishment strengthens the super delegate bloc by favoring proportional apportionment in the primaries over winner-take-all. Without the possibility of taking all of the votes in a large state, an insurgent candidate loses the opportunity to counter the super delegate bloc with a boost from delegate-rich states. While proportional representation formally appears more democratic, it actually and paradoxically denies fair representation in the face of a loaded, undemocratic bloc of delegates. The road becomes much steeper.
The party fixers organize the primaries so that the generally more conservative states speak early and often in the primary season, favoring the perception of a more conservative electorate and forestalling any momentum gained by a left insurgent. Demonstrating this advantage, the party elite's favorite Hillary Clinton enjoyed early victories in Southern states that the Democratic Party has no chance of winning in a general election, but leaving the mistaken impression that she was more “electable.”
Amazingly, Democratic Party zealots and apologists deny that their party's primaries are structurally fixed, that they are effectively undemocratic.
But the voters seem to sense this fact: Pew Research Center telephone polls show that the election has drawn the highest political interest of the last five Presidential campaigns (85%). But the same respondents show the second lowest confidence (36%) in the primary system of elections dating back to 1996.
Sanders supporters, recognizing the stacked deck presented by the super delegate system, have been contacting the super delegates to sway their votes or, at least, convince them to stay neutral until the convention. The party hacks (largely staffers and elected officials) have reacted with indignation, as reported by The Wall Street Journal. How dare rank-and-file Democrats reach out directly to their party's leadership!
But counting on the gullibility of voters is not limited to Democratic Party operatives. Nobel laureate economist and darling of liberals and the soft left, Paul Krugman, added his magisterial voice to the stop-Bernie crowd. In a recent NYT column (4-8-16), he addresses a key tenet of Sanders' campaign: “Let's consider bank reform. The easy slogan is 'Break up the Banks'... But were big banks at the heart of the financial crisis and would breaking them up protect us from future crises?”
For most people, the answer would be a decided “yes.” But astonishingly, Krugman disagrees.
“Many analysts concluded years ago that the answers to both questions are no. Predatory lending was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial; the crisis itself was centered not on big banks but on ‘shadow banks’ like Lehman Brothers that weren't necessarily that big. And the financial reform that Barack Obama signed in 2010 addressed these problems.”
Seldom will a reader encounter four sentences with more hair-splitting, nit-picking spin and deflection than in Krugman's disputation. Furthermore, it would be difficult to find a more misleading and flimsy apology for the big banks.
Rather than address the Krugman claims in detail, it is enough to attend to the AP news story (4-11-16) following only days after the NYT column. Writer Eric Tucker records the $5 billion settlement by Goldman Sachs against charges made by the Federal government. The settlement “holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail.” Tucker notes that JP Morgan Chase settled similar charges for $13 billion, Bank of America $16.6 billion, Citibank $7 billion, and Morgan Stanley $3.2 billion. Tucker wisely attributes these negotiated settlements to big bank activity “kicking off the recession in late 2007...” Krugman preferred to blame the dead-- two banks that were “executed” for their bad behavior.
But that's where you are taken when you shill for Hillary Clinton.
As the electoral season winds down and moves inexorably towards a stage managed, more elite-satisfying finale, it might be a good moment to reflect upon the future. How do we turn these regular exercises into real contests? How do we escape the two-party trap with its relentless rightward drift? How do we inject class and race into the superficialities of the bourgeois political process? How do we create a political force that can contest on behalf of working people and their allies without surrendering independence to a ruling class party? How do we break the two-party monopoly?
If we continue to ignore these questions, we will find the left even further marginalized watching an unfolding “drama” with a predictable outcome.
Thursday, March 31, 2016
US President Barack Obama came to Havana with a cautiously crafted, calculated message to the people of the world, the people of the US, and the people of Cuba.
To the people of the world, Obama was signaling, on his part, a new posture towards the Republic of Cuba. His expressed desire to remove the blockade and to open up relations must be taken at face value and welcomed. How far he intends to pursue this goal and with how much energy is to be seen. That it is part of a carefully cultivated “Obama Doctrine” blossoming in the last year of his Presidency should be apparent.
In his confessional series of interviews with Jeffrey Goldberg for The Atlantic, he makes his posture towards Latin American anti-imperialism clear:
“When I came into office, at the first Summit of the Americas that I attended, Hugo Chávez”—the late anti-American Venezuelan dictator—“was still the dominant figure in the conversation,” he said. “We made a very strategic decision early on, which was, rather than blow him up as this 10-foot giant adversary, to right-size the problem and say, ‘We don’t like what’s going on in Venezuela, but it’s not a threat to the United States.’ ”
Obama said that to achieve this rebalancing, the U.S. had to absorb the diatribes and insults of superannuated Castro manqués. “When I saw Chávez, I shook his hand and he handed me a Marxist critique of the U.S.–Latin America relationship,” Obama recalled. “And I had to sit there and listen to Ortega”—Daniel Ortega, the radical leftist president of Nicaragua—“make an hour-long rant against the United States. But us being there, not taking all that stuff seriously—because it really wasn’t a threat to us”—helped neutralize the region’s anti-Americanism.
If we substitute “anti-imperialism” for “anti-Americanism” (tellingly, Obama doesn't count Latin America as America), we can see that the Obama Doctrine is a more clever and, therefore, more insidious policy to maintain US dominance in the region; overt tolerance coupled with covert intervention promises more success than an earlier strategy of saber-rattling and brute force.
To the people of the US, Obama was underscoring what he hopes to be perceived as his foreign policy legacy, an opening to Cuba that will stand with Nixon's rapprochement with the Peoples Republic of China and Reagan's overtures to Gorbachev's USSR. Like Reagan's move, Obama's Cuba trip was a charm offensive meant to sell the image of a benign super power putting aside long-standing differences in order to “open up” opportunities for business and bring Cuba back into the Western fold. But unlike his predecessors, Obama presses his initiative late in his term, leaving the heavy lifting to those who will follow. The fact that he never tackled the Helms-Burton act early in his service (and a host of other promises and expectations) when he inherited a super-majority in the legislative branch demonstrates both a slug-like caution and a shallowness of conviction, a less flattering part of his legacy.
To the Cuban people, Obama brought to Havana a caricature of past relations and the attitude of a friendly big brother. He made his point of selling market reforms, outside investors, and Western-style “democracy,” wrapping it with a ribbon of smarmy good-neighborliness.
While the Western media and liberals saw this as a moment of Obama's greatness and magnanimity, one man saw it differently. Charged with protecting Cuban sovereignty and dignity for the last fifty-six years, Fidel Castro Ruz wrote from retirement, reminding the world that while Cuba seeks normal country-to-country relations with the US, it neither forgets nor forgives the transgressions of the past. Nor does it trust the promises of the future.
In a not-too-subtle reminder-- direct enough for even the planners and speech writers in the State Department-- Fidel quotes Antonio Maceo, Afro-Cuban leader of the mambises in the liberation struggle against Spain: “Whoever attempts to appropriate Cuba will reap only the dust of its soil drenched in blood, if he does not perish in the struggle.”
Fidel offers “brother Obama” a history lesson in the long and relentless effort to overthrow the Cuban revolution by its “neighbor” to the North. Nor will he allow the neighbor to the north to shrug off the Cold War as merely a past misunderstanding. He reminds Obama that the Cold War battle lines in Africa divided colonialism and Apartheid from African liberation. Without embarrassing Obama with the fact that the US stood with those opposing African liberation, Fidel revisited Cuba's intense, principled and long support for Africa's freedom.
In contrast to the truncated, simplistic, and self-serving account of the struggle for racial equality in the US offered by Obama (“But people organized; they protested; they debated these issues; they challenged government officials. And because of those protests, and because of those debates, and because of popular mobilization, I’m able to stand here today as an African-American and as President of the United States. That was because of the freedoms that were afforded in the United States that we were able to bring about change.”), Fidel reminded the US President that the Revolutionary government “swept away racial discrimination” in Cuba and persistently fought manifestations of racism. Unlike in the US, the Cuban people fought racism along with their government, not against the government's promotion of it; where racism persists in Cuba, it is in spite of the government, not because of it.
Fidel, with a Marxist dedication to historical context, understandably views US overtures with some skepticism, doubting that the changes mark an epiphany from the long-standing policy of defeating the revolution. But as one its leaders and staunchest defenders, he makes his position clear: “No one should be under the illusion that the people of this dignified and selfless country will renounce the glory, the rights, or the spiritual wealth they have gained with the development of education, science, and culture... We do not need the Empire to give us anything.”
Cubans should be filled with pride that they enjoy the wisdom and vigilance of one of the last century's greatest revolutionary leaders. We should all be appreciative of the exceptional commitment to truth and principle of this warrior for socialism and peace.
Saturday, March 19, 2016
Most US Presidents use their retirement to construct their interpretation of events transpiring during their service. They prefer to distance their more candid, more personal observations from the people, places, and activities that occupied their incumbencies. The mythology of the magisterial presidency demands that nothing tarnish the contrived imagery of sobriety, civility, and selfless governance. Therefore, it is uncommon for a President to air differences and confidences while still in office. That reticence makes President Obama’s recent comments, as told to Atlantic writer Jeffrey Goldberg (The Obama Doctrine, April, 2016), even more interesting.
Now Goldberg is no leftist. His commentary accompanying his interviews shows him to be a reliable consumer and purveyor of the official, self-serving Washington line on good guys and bad guys, freedom-lovers and freedom-haters. For Goldberg, Ghaddafi, Assad, Hugo Chavez, Putin, and the others who defied US diktat personify evil, while despots who toe the US line get a free pass. The fact that Obama does not unqualifiedly endorse this simplistic picture makes the interview most interesting.
For the vast majority of the entertainment-driven, scandal-seeking media, Obama’s openly expressed disdain for those US allies that he labeled “free riders” served as blood-soaked red meat. They relished the gossipy blast at putative friends like Hollande, Cameron, Erdogan, and the Saudis. But they never stopped to develop the implications of his remarks, refusing to frame the comments in the context of a new balance of power and shifting alliances.
For a time, the Obama administration has been moving away from the triumphant unilateralist (one dominant super power) position emerging from the demise of the Soviet Union. Obama would like us to believe that this is part of a rational, measured policy that he describes as “realist” and “internationalist”—a rejection of both “isolationism” and “liberal interventionism.” In fact, it is a move imposed by events: the endless, unwinnable wars, the intensification of nation-state rivalries, economic stagnation, and the resultant international instability. The Obama foreign policy vision reflects these new realities more than it shapes them.
Obama was vetted and anointed by significant sectors of the ruling class, and subsequently elected because his youth, dynamism, différence, and “hope/change” slogan fit the needs of a country wounded by economic crisis, political dysfunction, and military blunders. Just as James Carter emerged as a clean, pure and decidedly different candidate to legitimize the Presidential myth after the Nixon fiasco, Obama was the best option to clean up the Bush mess. Obama obliquely concedes this when he characterizes himself as a “retrenchment” President.
He embraced the responsibility with gusto, attempting to replace open military aggression and occupation with bombs, drones and special forces. The goal of advancing US national interests (really, capitalist interests) is addressed best, he believes, with care and deliberation: “We have to choose where we can make a real impact.” Or as he put more crudely, “We don’t do stupid shit.”-- An obvious allusion to the foreign policy of his predecessor.
But it is not only the hyper-militarized foreign policy of the Bush administration that Obama rejects; it is also the shrewd, cynical Clintonesque foreign policy of “liberal interventionism” that he opposes.
Liberal interventionism-- sometimes known as “humanitarian interventionism”-- is the doctrine that disguises US regime change, aggression, and meddling as inspired by the promotion of human rights. Whether it's aiding in the dismantling of Yugoslavia, noxious policies against Cuba or Venezuela, saber-rattling in the South China Sea, threats to the Democratic People's Republic of Korea, a coup in Ukraine, or the wholesale dismantling of the state of Libya, the US hides its moves behind a hypocritical appeal to the cause of encouraging human rights and democracy. The self-serving US doctrine of exporting human rights and democracy is a US counterpart to the British Empire's previous mission of civilizing the non-European peoples; both are a transparent cover for imperial design.
Within the Obama Administration, the chief proponents of liberal interventionism were Hillary Clinton, Samantha Power, Susan Rice, Ben Rhodes, and Antony Blinken, according to Jeffrey Goldberg.
When not sitting on an opportunistic fence, John Kerry will side with the “humanitarians.”
Goldberg traces Obama's “realist” foreign policy position to a speech the then senator made before an anti-war rally:
“I suffer no illusions about Saddam Hussein,” he said. “He is a brutal man. A ruthless man … But I also know that Saddam poses no imminent and direct threat to the United States or to his neighbors.” He added, “I know that an invasion of Iraq without a clear rationale and without strong international support will only fan the flames of the Middle East, and encourage the worst, rather than best, impulses of the Arab world, and strengthen the recruitment arm of al-Qaeda.”
Certainly Obama deserves some credit for anticipating the strong and enduring resistance to an unprovoked invasion and occupation of a sovereign country. But it's important to note that it is not a defense of Iraq's sovereignty and right of self-determination that anchors his argument, but a calculation. Obama, like all bourgeois politicians, has not abandoned the imperialist project; he has only sought to improve it-- a point lost on those worshiping him in the run-up to the 2008 election.
The decisive event spurring Obama to settle accounts in The Atlantic interviews is the overthrow of Ghadaffi and the destruction of the Libyan state. It has become impossible to see the US, NATO, and Gulf states' war on Libya as anything more than a criminal enterprise and a strategic disaster. Obama is unconcerned about the criminality, but troubled by the debacle as a blemish on his record. Thus, he goes to great lengths to push responsibility onto his allies (Sarkozy, Cameron, etc.) and the liberal interventionists in his administration:
“...as tragic as the Libyan situation may be, it’s not our problem. The way I looked at it was that it would be our problem if, in fact, complete chaos and civil war broke out in Libya. But this is not so at the core of U.S. interests that it makes sense for us to unilaterally strike against the Qaddafi regime. At that point, you’ve got Europe and a number of Gulf countries who despise Qaddafi, or are concerned on a humanitarian basis, who are calling for action. But what has been a habit over the last several decades in these circumstances is people pushing us to act but then showing an unwillingness to put any skin in the game.”
Since we know from the Tony Blair phone transcripts (see my Journalists or Courtesans?) that on February 25, 2011-- barely two weeks after most journalists date the beginnings of the Libyan “uprising”-- the US and NATO were already threatening armed intervention, Obama's proclaimed reluctance to act seems less than convincing. But his determination to deflect the blame is certainly apparent. Despite his slipperiness, the fact is that the US vigorously bombed the Libyan government into defeat.
Goldberg notes Obama's reflections:
“When I go back and I ask myself what went wrong,” Obama said, “there’s room for criticism, because I had more faith in the Europeans, given Libya’s proximity, being invested in the follow-up,” he said. He noted that Nicolas Sarkozy, the French president, lost his job the following year. And he said that British Prime Minister David Cameron soon stopped paying attention, becoming “distracted by a range of other things.” Of France, he said, “Sarkozy wanted to trumpet the flights he was taking in the air campaign, despite the fact that we had wiped out all the air defenses and essentially set up the entire infrastructure” for the intervention. This sort of bragging was fine, Obama said, because it allowed the U.S. to “purchase France’s involvement in a way that made it less expensive for us and less risky for us.” In other words, giving France extra credit in exchange for less risk and cost to the United States was a useful trade-off—except that “from the perspective of a lot of the folks in the foreign-policy establishment, well, that was terrible. If we’re going to do something, obviously we’ve got to be up front, and nobody else is sharing in the spotlight.”
With the Libyan fiasco as a backdrop, one understands Obama's subsequent hesitancy to bomb the hell out of Assad's Syria. Goldberg (and others) make much of Obama's turn away from his “red line” ultimatum on Syria: “History may record August 30, 2013, as the day Obama prevented the U.S. from entering yet another disastrous Muslim civil war...”
But the truth is far more complicated. The rebuff of Cameron's partnership by the UK parliament, US opinion polls, Merkel's disapproval, and intelligence hesitance all played a large role in causing Obama to throw the question of war into Congress's reluctant lap. Rather than defying “Washington's playbook” and rebuffing his own liberal interventionists, the President got cold feet.
Nonetheless, in this election season, Obama's uncharacteristic criticisms of his Administration mates do not bode well for the post-Obama era. Hillary Clinton, the presumptive next President, departs little from the “Washington playbook” on Obama's reckoning, seemingly willing to unleash the bombers at the slightest provocation. In this, she differs little from the Republican bullies. Only Sanders, with little chance to win the nomination, shows some leaning toward Obama's “realism,” his “enlightened” imperialism.
Obama's pull-back from the Syrian intervention left many allies confused, angry, even disgusted. It brought many existing frictions to a new, more damaging level. The old Washington consensus-- a euphemism for complete and servile Washington hegemony-- has been unraveling for some time. The rise of new economic powers and power blocs, the scramble for recovery and advantage after the trough of the economic crisis, and the US continuing engagement in costly, multiple wars sharply challenges US dominance.
Obama's backing away from overt action in Syria and recent rapprochement with Iran left the Jordanian leadership unhappy. Similarly, Turkey's Erdogan, who Obama considers a failure and an “authoritarian,” now challenges US leadership and authority in the region.
But the long-standing Saudi relationship is nearly fractured; festering differences only deepened with the Syrian and Iranian moves. Criticism of Saudi actions in Yemen, the US jettisoning of Mubarak, and the oil wars preceded the current hostility. With US energy production nearing self-sufficiency, the Saudi grip on Obama's foreign policy was loosened. One might speculate that Saudi Arabia's decision not to put a floor on falling oil prices constituted a response to the new-found independence. The US responded by removing the ban on exporting US energy resources. For a recent account appreciative of Obama's candor regarding Saudi Arabia in these interviews see the always perceptive commentator on Middle Eastern affairs, Patrick Cockburn, writing in Counterpunch.
Goldberg's interviews show clearly a growing exasperation with the US's traditional Middle Eastern allies and a yearning for new, more promising relations on the part of Obama. Israel and Saudi Arabia-- traditional loyal cops for US aims-- often defy US orders, adding to what Obama calls the post-Libyan “mess.”
Obama makes it clear that he he would like to get past his Middle Eastern mess, a task that he was elected to perform. He would like to focus on his Asia pivot. He would like to shift his attention to dampening Chinese influence and strengthening US economic links with other Asian countries-- the policy of isolating the PRC embodied in the Trans-Pacific Pact.
He acclaims his “restraint” in South and Central America as a formula for patient, but effective regime change, a formula that he hopes to exercise in his new relationship with Cuba.
If we take the Obama interviews as a kind of candid valedictory, we can say that he bitterly regrets failing to fulfill his mission of restoring a stability to the Middle East favorable to US corporate interests. We also can say that, after Libya, he came to the conclusion that tolerating the liberal interventionists in their knee-jerk military responses to advancing US imperial designs is a recipe for further entanglements and costly “messes.” He has arrived at an alternative, measured, “rational” imperialism in its stead, an imperialism that reflects the rise of new regional and international powers, the weakening of US hegemony, and the need to not be drawn into unconditional alliances.
Others have seen the Obama valediction for what it is: a step away from the New American Century war hawks and their “liberal” counterparts who hide their war mongering behind human rights. The Wall Street Journal responded to The Obama Doctrine with a scathing attack issued by Global View columnist, Bret Stephens (Barack Obama Checks Out, 3-15-16). Stephens agitatedly charges Obama with giving interviews to Goldberg “...that are.. gratuitously damaging to long standing US alliances, international security and Mr. Obama's reputation as a serious steward of the American interests...” Harsh words, indeed.
But even more troubling is the pack of rabid candidates seeking a chance to replace Obama. Neither Hillary Clinton nor any of the Republican candidates shares Obama's professed sobriety in pursuing imperial goals. All see military might and its ready exercise as the fulcrum of foreign policy. None share Obama's preference for drones and special operations over mass bombings and overt military operations. None would call out the “free-riders” and trouble makers. If one of them becomes President, we are back to the cowboy imperialism of Bush, the younger. Obama-imperialism is bad enough.