Saturday, 4 July 2015

Put An End To This Unthinkability

Paul Krugman joins Joseph Stiglitz in calling for a No vote in the Greek referendum:

It has been obvious for some time that the creation of the euro was a terrible mistake.

Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink.

Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic.

But the situation in Greece has now reached what looks like a point of no return.

Banks are temporarily closed and the government has imposed capital controls — limits on the movement of funds out of the country.

It seems highly likely that the government will soon have to start paying pensions and wages in scrip, in effect creating a parallel currency.

And tomorrow the country will hold a referendum on whether to accept the demands of the “troika” — the institutions representing creditor interests — for yet more austerity.

Greece should vote “no,” and the Greek government should be ready, if necessary, to leave the euro.

To understand why I say this, you need to realize that most — not all, but most — of what you’ve heard about Greek profligacy and irresponsibility is false.

Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. 

Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply.

If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.

So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.

And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket.

Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive.

This is what happened, for example, in Canada in the 1990s, and to an important extent it’s what happened in Iceland more recently.

But Greece, without its own currency, didn’t have that option.

So have I just made the case for “Grexit” — Greek exit from the euro? Not necessarily.

The problem with Grexit has always been the risk of financial chaos, of a banking system disrupted by panicked withdrawals and of business hobbled both by banking troubles and by uncertainty over the legal status of debts.

That’s why successive Greek governments have acceded to austerity demands, and why even Syriza, the ruling leftist coalition, was willing to accept the austerity that has already been imposed.

All it asked for was, in effect, a standstill on further austerity.

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being.

The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.

But they shouldn’t, for three reasons.

First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever.

Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done.

Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence.

Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done.

These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way.

This isn’t about analysis, it’s about power — the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable.

So it’s time to put an end to this unthinkability.

Otherwise Greece will face endless austerity, and a depression with no hint of an end.

If You're Not OXI

You're a moron.

Friday, 3 July 2015

See No EVEL

That a particular law might apply directly in England alone, such levying some or other charge here and nowhere else, would not make it "England-only". That suggestion would be beneath illiterate. And it frequently is.

The only such legislation is ecclesiastical, and not even very much of that. Anything to do with bishops affects the House of Lords. Anything to do with church repairs might have Barnett implications, depending on who was being required to foot the bill. Only the authorisation of forms of service for use in the Church of England would ever qualify.

Let the EVEL provision be enacted. Barring the DUP from voting against liberal, Romish or liberal-Romish liturgical innovations would constitute the sum total of its application. No other England-only legislation exists.

Don't Bet On Betty

As soon as Labour lost, it was clear that Andy Burnham was going to stand for Leader, and probably win.

Yet a junior member of his frontbench team, a person whom etiquette demanded ought to sign his nomination papers and campaign for him, pre-emptively went on television and announced her candidacy.

Her lack of trade union or local government background could not have been more obvious.

Accordingly, her frontbench career must be over, and she needs to prepare to stand down from Parliament in 2020, so as to avoid the indignity of deselection at the insistence of the National Executive Committee.

She is not going to win (she might very well come fourth), and her candidacy at all, against her boss, has been ill-mannered.

With Yvette Cooper also a trade union leader's daughter, the old industrial and municipal rules are back, and the fact that Kendall broke them because she did not know them only makes her transgression even worse.

John Woodcock is rapidly becoming the present age's John Stonehouse, Woodrow Wyatt or Dick Taverne; an outlier for the Outer Right's departure from the Labour orbit after what it will doubtless identify as a watershed moment in September.

Middle Eastern Matters

Mary Dejevsky on why bombing Syria was a bad idea two years ago, and it still is.

Peter Oborne on why David Cameron got IS so wrong.

David Morrison and Peter Oborne on how the United States manufactured Iran's nuclear threat.

Harmless EVEL

Of course, Labour now has no more partisan interest in this than the Conservatives have. Arguably, given the smallness of the Government's majority, it has even less.

But EVEL would be a judgement call by the Speaker on each occasion. And except on legislation relating purely to the internal affairs of the Church of England, the Speaker would in every case rule that the matter in hand was not "exclusively English".

For the perfectly good reason that, except for legislation relating purely to the internal affairs of the Church of England, nothing that comes before the House of Commons is "exclusively English". Other than in ecclesiastical affairs, "English-only measures" do not exist.

This provision may as well be adopted, if that would keep people sweet, or at least quiet. It would never, because it could never, be used.

Thursday, 2 July 2015

Why Don't The Tories Do Economics?

George Osborne is the latest in a long line of Conservative Chancellors to be taken seriously by no proper economist on earth.

It will not make a jot of difference, because past Conservative Chancellors are treated as economic gurus, no matter how rubbish they were at the job.

Nigel Lawson is, even though he presided over one recession, he caused another, he resigned in protest that Thatcher was not then yet prepared to join the ERM, and he now openly admits that his Big Bang contributed significantly to the Crash a generation later.

If he had lived, then even Tony Barber, with a reasonable claim to have been the worst Chancellor ever, would have been so revered. His party has to tell itself that the Heath Government was "brought down by the miners", rather than by millions of people's votes against its stagflationary incompetence.

Next to that kind of record, Osborne's will look positively sparkling. Against the record of a proper Chancellor, of course, it will dazzle rather less.

But no one ever makes that comparison. Labour has been accused of having "left chaos" since time immemorial, and that has always been taken entirely at face value by the most partisan press in the world.

Newspapers are, and ought to be, political everywhere. Holding firmly to an ideology or to a broader set of principles will ordinarily mean supporting a particular political party, at least most of the time.

In Britain, however, we have something else. Almost our entire national newspaper market simply supports whatever the Conservative Party happens to say, for no other reason than that the Conservative Party happens to say it.

As soon as that party adopts a policy, then that policy is self-evidently the distilled quintessence of common sense, even if it is the opposite of what was the policy the previous day, and even if it has already been screamed down as utter lunacy when it was Labour policy, which it might very well still be.

Every leading Conservative figure is a titanic statesman of brilliant intellect and impeccable character, while every other politician is a joke or worse. And so it goes on, and on, and on, and on, and on.

Even David Axelrod was shocked, and it is difficult to imagine that that happens awfully often.

But why don't Tories care about economics? Of course, they rarely read even the simplest of books very much, if at all. They are not the right-wing intellectuals of the Continent or of the American Old Right.

The reason here, however, also goes much deeper, and yet it is strikingly simple.

Whereas people who grow up poor grow up wondering why they are poor, people who grow up rich do not grow up wondering why they are rich.

Oh, well, since by the miracle of Iain Duncan Smith it is now impossible to grow up poor in Britain, we may expect such questions never again to occur to anyone, thus keeping the Conservative Party in office until the End of Days.

As Much Political As Financial

Seumas Milne writes:

It’s now clear that Germany and Europe’s powers that be don’t just want the Greek government to bend the knee. They want regime change.

Not by military force, of course – this operation is being directed from Berlin and Brussels, rather than Washington.

But that the German chancellor Angela Merkel and the troika of Greece’s European and International Monetary Fund creditors are out to remove the elected government in Athens now seems beyond serious doubt

Everything they have done in recent weeks in relation to the leftist Syriza administraton, elected to turn the tide of austerity, appears designed to divide or discredit Alexis Tsipras’s government.

They were at it again today, when Tsipras offered what looked like almost complete acceptance of the austerity package he had called a referendum on this Sunday. 

There could be no talks, Merkel responded, until the ballot had taken place. There’s no suggestion of genuine compromise.

The aim is apparently to humiliate Tsipras and his government in preparation for its early replacement with a more pliable administration.

We know from the IMF documents prepared for last week’s “final proposals” and reported in the Guardian that the creditors were fully aware they meant unsustainable levels of debt and self-defeating austerity for Greece until at least 2030, even on the most fancifully optimistic scenario.

That’s because, just as the earlier bailouts went to the banks not the country, and troika-imposed austerity has brought penury and a debt explosion, these demands are really about power, not money.

If they are successful in forcing Tsipras out of office, a slightly less destructive package could then be offered to a more house-trained Greek leader who replaced him.

Hence the European Central Bank’s decision to switch off emergency funding of Greece’s banks after Tsipras called the referendum on an austerity scheme he had described as blackmail.

That was what triggered the bank closures and capital controls, which have taken Greece’s crisis to a new level this week as it became the first developed country to default on an IMF loan.

The EU authorities have a deep aversion to referendums, and countries are routinely persuaded to hold them again if they give the wrong answer.

The vote planned in Greece is no exception. A barrage of threats and scaremongering was unleashed as soon as it was called.

One European leader after another warned Greeks to ignore their government and vote yes – or be forced out of the eurozone, with dire consequences.

Already the class nature of the divide between the wealthier yes and more working-class no camps is stark.

The troika’s hope seems to be that if Tsipras is defeated by fear of chaos, Syriza will split or be forced from office in short order.

The euro elite insists it is representing the interests of Portuguese or Irish taxpayers who have to pick up the bill for bailing out the feckless Greeks – or will be enraged by any debt forgiveness when they have been forced to swallow similar medicine.

The reality is the other way round. Not only has no German or any other EU taxpayer taken any loss bailing out Greece.

The real fear in Brussels and Berlin is not that people in countries such as Spain and Portugal who have taken the brunt of eurozone austerity will oppose relief for ravaged Greece – but that they’ll want an end to austerity and their own debts written off as well.

That’s what they call “moral hazard”. But it has nothing to do with morality and everything to do with a dysfunctional currency union, a destructive neoliberal economic model enforced by treaty and an austerity regime maintained to ensure a return to profitability on corporate terms.

That’s why Merkel and the ECB mandarins want Greece’s surrender. Upstart democratic governments that challenge austerity must be crushed: the real risk of contagion is as much political as financial.

This is, after all, a system where unelected institutions and other states have the power to override elected governments – in fact to impose not only policies but effectively governments too, as we may be about to see in Greece.

Anti-democratic firewalls are built into Europe’s institutions. The achilles heel of Syriza has been its simultaneous commitment to ending disastrous austerity and remaining in the euro. That has reflected Greek public opinion.

But there was never going to be an honourable compromise with the creditors, or much mileage in trying to persuade the authorities they were good Europeans

 For the euro elite, the dangers of Grexit are outweighed by the risk that larger states could follow a successful Greek stand against austerity.

Tsipras and Syriza’s determination to stay in the eurozone come what may has seriously weakened Greece’s hand.

The economic dislocation of jumping off the euro train would doubtless be severe in the short term, though the costs of permanent austerity would almost certainly be greater thereafter. 

But Syriza insiders say there is little preparation for what anyway may be forced on them. The relentless pressure of the EU bureaucracy demands a strong and clear-headed response.

Right now, for example, that means the Athens government immediately taking control of its banks, currently shutting down all transactions.

The worst outcome of this crisis would be for Syriza to implement the austerity it was elected to end. A yes vote in next weekend’s referendum, if it goes ahead, would probably lead to the government’s fall, and almost certainly new elections.

But even a no vote, which would offer the best chance for Greece, would need to be followed by more radical measures if the government was going to strengthen its negotiating hand or prepare the ground for euro exit.

The real risk across Europe is that if Syriza caves in or collapses, that failure will be used to turn back the rising tide of support for anti-austerity movements such as Podemos in Spain, or Sinn Féin in Ireland [only on one side of the Border, and merrily implementing austerity on the other side], leaving the field to populists of the right.

Either way, any Greek euro deal that fails to write off unrepayable debt or end the austerity squeeze will only postpone the crisis. If the Syriza government survives, it will have to change direction.

Its fate, and its chaotic confrontation with the eurozone’s overlords, is going to shape all of Europe’s future.

Liberalism and Catholic Education

Adrian Pabst giving the first keynote speech of the Porta Fidei conference held in Carlisle on Saturday.

A splendid start to a splendid day.

The Lanchester Review: Constellations, by Nick Payne

Reviewed by Ian Oakley.

The Lanchester Review: How the Struggle of British Fathers Was Born in the Labour Party

Matt O'Connor explains.

Neither Cornered Nor Stoned

Never gave up its identity, so still going strong.

The long ago Labour Government did not close down the Catholic adoption agencies.

They closed themselves down.

Slam Duncan

I have to applaud the genius of Iain Duncan Smith, who has abolished child poverty simply by abolishing the concept in the relevant statistics.

If you don't ask the question, then you can't be given the answer.

Sometimes, I sincerely wish that I had never gone to university. I might still have been as creative a thinker as Iain Duncan Smith.

The Daesh To Disaster

He had been in Libya. Of course. Thank you so very, very much, David Cameron. 

Ed Miliband didn't help, as I said at the time. But you, David Cameron, did it. 

I am horrified that Labour might support the bombing of targets in Syria, which the Americans are already doing to no effect.

By the time of the 2020 Election, the opposition to this intervention will have been proved right.

The Leader of the Labour Party will need to be someone who had been right all along.

Wednesday, 1 July 2015

Smashing

Even without troubling the plates, I ought to have got in a bottle of ouzo.

Whatever you have, pour yourself a glass, and raise it to Greek independence.

Private Charity, Public Benefit

In England, the commercial school sector inspects itself. Based on the members of the present Government, it would not appear to be very good. But no one really knows.

Therefore, let the condition of a commercial school's continuing charitable status be its having been adjudged satisfactory or better by Ofsted, using the same criteria as for state schools, with the reports published, and with the value-added measure applied, thereby requiring those schools to have demonstrated how they had improved pupils' abilities.

Andy Burnham, over to you.

But Apparently Not

Andy McSmith writes:

More than £215,000 of the vast sums that the Conservative Party poured into marginal seats in the run-up to the general election came from the mysterious United and Cecil Club.

In the Register of Members’ Interests, 51 Tory MPs declared donations to their constituency parties from the club, ranging from £1,000 to £10,000, in the first three months of this year.

Most beneficiaries are new MPs, though there are a few who won their seats in 2010 by narrow margins.

The three whose parties received £10,000 each were sitting MPs Kris Hopkins and David Morris and Ben Howlett, who took Bath from the Lib Dems.

United and Cecil is a members’ association with only one known purpose – to collect and disburse donations to the Conservative Party.

On the Election Commission registry, its address is given as a £2m private house near Slough.

Most of the MPs who have benefited from it give its address as a stables near Windsor, run by Tim Lord, former chief executive of the Tobacco Manufacturers’ Association.

A few give its address as Munslows, an accountants’ firm in High Holborn, London, and one entry suggests it is based in the same building as the Carlton Club, a short walk from Parliament.

United and Cecil has no contact details and its membership list is not public.

It does not need to declare its sources of money as it comes in individual donations below £7,500.

Given the clamour the Tories raise about Labour’s union donations, you might think they would have qualms about being funded by a secretive organisation, but apparently not.

Frank

During a dispute among the exiled Russian Orthodox in Paris, one side once referred to the other side as "les orthodoxes latino-francs". As Professor Andrew Louth of Durham put it to me, "That is certainly one way to make friends and influence people." Ed West writes:

During the period of the crusades Greeks would refer to western Europeans by the generic term ‘Frank’, derived from the name of the leading barbarian tribe of the west.

The word still lives on as a name for white people in Urdu and Hindi – Firangi – as well as Thai and Vietnamese, for whom US soldiers were called Farang (or ‘black Farang’ for African-American troops).

According to Norman Stone’s history of Turkey, the word for syphilis in Turkish is likewise derived from Frank (it was also called ‘the French disease’ in 15th century Italy).

‘Frank’ is a useful term that really needs to be brought back to illustrate the great divide between the Greeks and their opponents in this current crisis, the people of what is sometimes referred to as ‘core Europe’, roughly the boundaries of Charlemagne’s empire – France, Germany, the Low Countries and northern Italy.

As Greece collapses, why I am looking at maps of 9th century Europe?

Because at the heart of the current tragedy is the inability of the ruling class to appreciate that history and culture matter (and because I’m weird, obviously).

The European Union was cobbled together on the premise that people are basically the same everywhere and therefore open borders would simply reduce costs and larger states would produce economies of scale.

But people across Europe, let alone outside it, really are different.

As this blog by Michael Story illustrates, because the ‘internationalised class’ tend to meet and socialise with people who are like them, they ignore how unusual people like them are.

He writes:

If everyone you meet from around the world has been screened to leave only the most sober, rational and future oriented people, then your heuristic sense of what people are like will be way off.

If you were an economist looking at Greece’s joining the Euro, you would examine their national data, plans for reform and economic growth and conclude that it might be a good idea- the Greek economists you are dealing with seem very sensible, there’s every reason to think that the proposed reform might work.

‘But what you’d be ignoring is that the non-economist Greeks might have a very different view.

‘This is the key finding from a fascinating study about a game in which players can profit by cooperating and punish players on their team who do not cooperate. 

What the researchers found is that cooperation and willingness to punish non-cooperators was highest in, well exactly the countries that you’d predict.

But most interestingly, in some parts of the world players actually chose not just to ignore those who were free-riding, but actively punish their own team-mates who were cooperating the most (the red bars).’

In Greece, for example.

What the paper shows is that people in different parts of the world act in very different ways, and these social norms have an impact on institutions – and the economy.

As Michael concludes:

‘Back in 2008, these researchers unearthed something crucial- that culture is actually pretty important.

Not just the culture at the top but particularly in democracies, the culture throughout society.

If Greek game players are not just willing to avoid contributing, but to actively punish those who try to help the team, what chance has the country of righting itself?

This is the sort of lesson that has to be relearned by the elite- that people are different, and you can ignore it at your peril.’

Trying to build a polity that includes both Greeks and Franks is obviously fraught with problems, because their cultural norms are so different.

Union barely works even in Italy, which has a vast gulf in culture between the north and the south (which was Greek-speaking for a lot longer than it has been ‘Italian’).

Across the whole of Europe it’s a hopeless idea.

As game theory shows, joining together corrupt and non-corrupt political cultures makes the latter behave more like the former.

Partly because such cultural differences were wilfully ignored, the Greek people are going through hell. But not to worry, for some enterprising Londoner aims to rescue the country by raising €1.6bn through crowdsourcing.

So far they’ve got about  €25,000, which is quite impressive, but with seven days to go they’ve some work to do.

The problem is that, as much as I like the Greeks and love Greek culture and civilisation, the country is 69th on Transparency International’s Corruption Index (tied with those other non-Frankish countries, Bulgaria and Romania), so I may well spend my money on a bottle of ouzo for all the good it will do the poor Hellenes.

A Painful Yet Obvious Admission

Simon Shuster writes:

A few years ago, when Greece was still at the start of its slide into an economic depression, the Nobel prize-winning economist Joseph Stiglitz remembers discussing the crisis with Greek officials.

What they wanted was a stimulus package to boost growth and create jobs, and Stiglitz, who had just produced an influential report for the United Nations on how to deal with the global financial crisis, agreed that this would be the best way forward.

Instead, Greece’s foreign creditors imposed a strict program of austerity. The Greek economy has shrunk by about 25% since 2010. The cost-cutting was an enormous mistake, Stiglitz says, and it’s time for the creditors to admit it. 

“They have criminal responsibility,” he says of the so-called troika of financial institutions that bailed out the Greek economy in 2010, namely the International Monetary Fund, the European Commission and the European Central Bank. 

“It’s a kind of criminal responsibility for causing a major recession,” Stiglitz tells TIME in a phone interview.

Along with a growing number of the world’s most influential economists, Stiglitz has begun to urge the troika to forgive Greece’s debt – estimated to be worth close to $300 billion in bailouts – and to offer the stimulus money that two successive Greek governments have been requesting.

Failure to do so, Stiglitz argues, would not only worsen the recession in Greece – already deeper and more prolonged than the Great Depression in the U.S. – it would also wreck the credibility of Europe’s common currency, the euro, and put the global economy at risk of contagion.

So far Greece’s creditors have downplayed those risks. In recent years they have repeatedly insisted that European banks and global markets do not face any serious fallout from Greece abandoning the euro, as they have had plenty of time to insulate themselves from such an outcome.

But Stiglitz, who served as the chief economist of the World Bank from 1997 to 2000, says no such firewall of protection can exist in a globalized economy, where the connections between events and institutions are often impossible to predict.

“We don’t know all the linkings,” he says. Many countries in Eastern Europe, for instance, are still heavily reliant on Greek banks, and if those banks collapse the European Union faces the risk of a chain reaction of financial turmoil that could easily spread to the rest of the global economy.

“There is a lack of transparency in financial markets that makes it impossible to know exactly what the consequences are,” says Stiglitz. “Anybody who says they do obviously doesn’t know what they’re talking about.”

Over the weekend the prospect of Greece abandoning the euro drew closer than ever, as talks between the Greek government and its creditors broke down. Prime Minister Alexis Tsipras, who was elected in January on a promise to end austerity, announced on Saturday that he could not accept the troika’s “insulting” demands for more tax hikes and pension cuts, and he called a referendum for July 5 to let voters decide how the government should handle the negotiations going forward.

If a majority of Greeks vote to reject the troika’s terms for continued assistance, Greece could be forced to default on its debt and pull out of the currency union.

Stiglitz sees two possible outcomes to that scenario – neither of them pleasant for the European Union.

If the Greek economy recovers after abandoning the euro, it would “certainly increase the impetus for anti-euro politics,” encouraging other struggling economies to drop the common currency and go it alone.

If the Greek economy collapses without the euro, “you have on the edge of Europe a failed state,” Stiglitz says. “That’s when the geopolitics become very ugly.”

By providing financial aid, Russia and China would then be able to undermine Greece’s allegiance to the E.U. and its foreign policy decisions, creating what Stiglitz calls “an enemy within.”

There is no way to predict the long-term consequences of such a break in the E.U.’s political cohesion, but it would likely be more costly than offering Greece a break on its loans, he says.

“The creditors should admit that the policies that they put forward over the last five years are flawed,” says Stiglitz, a professor at Columbia University.

“What they asked for caused a deep depression with long-standing effects, and I don’t think there is any way that Europe’s and Germany’s hands are clean.

“My own view is that they ought to recognize their complicity and say, ‘Look, the past is the past. We made mistakes. How do we go on from here?’”

The most reasonable solution Stiglitz sees is a write-off of Greece’s debt, or at least a deal that would not require any payments for the next ten or 15 years.

In that time, Greece should be given additional aid to jumpstart its economy and return to growth.

But the first step would be for the troika to make a painful yet obvious admission: “Austerity hasn’t worked,” Stiglitz says.

Davos Woman

W. James Antle III writes:

Listen to Martin O’Malley’s campaign stump speech and you would think he was running against a candidate named Goldman Sachs.

Jim Webb insists the Democratic Party “could do better with white working people.” Bernie Sanders describes himself as a democratic socialist.

Are the Democrats ready for Hillary?

The polling makes the question seem absurd. In four of the last five national polls of Democratic voters, the former secretary of state has taken at least 60 percent of the vote.

Even drops in Clinton’s ratings for honesty and overall favorability haven’t seemed to dent her support among the party rank-and-file.

In a late May CNN/ORC poll, Clinton was at 61 percent among liberals to Sanders’ 18 percent.

Senator Sanders and Vice President Joe Biden—who is unlikely to run—were the only alternatives breaking into the double digits.

Former Maryland Governor O’Malley, the declared Clinton challenger who most looks like a president, barely registered at 1 percent.

Ask the question another way: are Democrats ready for a return to neoliberalism?

Hillary may seem like a dove compared to Lindsey Graham or Marco Rubio, but she is more hawkish than Barack Obama.

You would be hard pressed to find a foreign intervention with bipartisan support that she has opposed since her youthful advocacy against Vietnam.

As secretary of state, she helped lead the country into yet another war of choice, this time in Libya.

What about neoliberal economics?

Despite her feminist background and stated desire to smash a glass ceiling on her own, it is difficult to untangle Hillary Clinton from her husband’s legacy.

Taken together, the Clintons have not really been known for their assaults on the 1 percent.

Democrats know this—which is why there was a constituency for the futile effort to draft Sen. Elizabeth Warren into the presidential race—but they take heart in the fact that the Clinton of 2016 isn’t running as a centrist.

In fact, she was using Warren-like rhetoric about corporate America as far back as her first presidential campaign.

Clinton called for a 90-day foreclosure moratorium and a five-year freeze on subprime adjustable rate mortgages in 2007, both positions that put her to the left of Obama.

Clinton certainly isn’t making many feints toward social conservatism.

She has endorsed gay marriage, issuing a statement with her husband praising a Supreme Court decision gutting the Defense of Marriage Act that he signed into law and that she supported for over a decade

 Hillary Clinton once told Newsweek abortion is “wrong.” She now calls for changing “religious beliefs and structural biases” that stand in the way of access to abortion.

During her first run for president, Clinton opposed drivers’ licenses for illegal immigrants. Today she supports them and is trying to outflank President Obama on deferred deportations.

Clinton’s campaign announcement video featured symbols of ascendant cultural liberalism even more prominently than the candidate herself.

Hillary Clinton is not Bill, progressives tell themselves. Moreover, Bill Clinton ran for president in a different time.

The Democratic Party had enduring political liabilities that made it possible to lose national elections even to politicians as lacking in charisma and electoral success as George H.W. Bush—before 1988, Bush had never managed to get elected to more than a House seat, which he held for two terms, without Ronald Reagan.

The Democrats’ perceived weakness on crime and foreign policy, their weirdness on cultural issues, and their presumed hostility to economic growth created a need for “New Democrats” to win presidential elections.

That’s why Bill Clinton was more supportive of war, Wall Street, deregulation, and the death penalty than your average liberal.

Those Sister Souljah moments distancing the Democratic nominee from the political liabilities of liberalism are no longer necessary.

The economic and ideological climate is different. The issues that drove the Democrats to neoliberalism are less salient, insofar as they remain important at all.

Demographics have changed to the point that the coalition behind George McGovern—which even Clintonite Democrats like Paul Begala not long ago dismissed as “eggheads and African Americans”—can now win national majorities.

Yet burrowed deep within the most progressive circles of the Democratic Party there is a sense of unease with the Clintons’ coziness with Wall Street.

Already there has been a New York Times best-selling book explaining, as the subtitle puts it, “How and why foreign governments and businesses helped make Bill and Hillary rich.”

Where Republican readers see potential high crimes and misdemeanors, principled progressives should at least sense danger.

Liberals generally detest the influence of special-interest money on politics. They speak of the Supreme Court’s Citizens United decision expanding permissible corporate political spending in terms conservatives reserve for Roe v. Wade.

If there were ever to be some insuperable wall between finance and government, the Clintons would not build that.

The Clinton Foundation, the gigantic nonprofit base for Hillary and Bill outside of government, has done plenty of bona fide charitable work, including some ambitious projects other less well-funded entities would have been hard pressed to undertake.

But as Richard Kim observed in The Nation, it is also a “global plutocrats’ social club,” a “Davos on the Hudson where corporate executives pledge millions for the privilege of rubbing elbows with celebrities and world leaders.”

The Clinton Global Initiative, founded in 2005, in particular thrives off corporate connections, accumulating tens of billions of dollars in pledges.

“For corporations, attaching Clinton’s brand to their social investments offered a major p.r. boost,” wrote Alec MacGillis in a detailed New Republic piece.

“As further incentive, they could hope for a kind word from Clinton the next time they landed in a sticky spot.”

The Clintons have partnered with Walmart, Goldman Sachs, Michael Bloomberg, Lloyd Blankfein of Goldman Sachs, and Tom Golisano of Paychex.

The big three soda makers—Coca-Cola, PepsiCo, and the Dr Pepper Snapple Group—announced their commitment to help cut the sugary soft drink calories Americans consume through the Clinton Global Initiative.

“This is huge,” Bill Clinton boasted to the New York Times “I’ve heard it could mean a couple of pounds of weight lost each year in some cases.”

The Clintons also won a commitment from Coca-Cola to “economically empower five million women entrepreneurs by 2020,” in what the Clinton Foundation described as a “refreshing investment in women entrepreneurs.”

One needn’t find fault in any of these lofty objectives to ask if the links between the Clintons and corporations have really loosened since the 1990s.

People from far more privileged backgrounds than the Clintons, such as the Kennedys and the Rockefellers, have entered politics as self-styled champions of the poor and the working class. Bill Clinton comes from genuine poverty.

But the Clintons, as the old saying goes, have done well by doing good.

Their combined net worth is $55 million. Despite their poor-mouthing—regular references to Bill’s relative lack of wealth when he was elected president and the Clintons’ debt upon leaving office—whatever riches the Clintons once lacked, they have more than made up for in time.

The Clintons have even practiced a form of trickle-down economics. Some of the people around them have become quite wealthy too.

To cite just one example, former longtime Clinton aide Doug Band, whose initial duties included carrying bags and fetching Diet Cokes, was ultimately able to afford $8.8 million in Manhattan real estate holdings.

(Band’s relationship with the family crumbled as he worked his Clinton connections too aggressively even for the former president’s comfort.)

In the realm of policy, too, as opposed to pay-to-play, it is not clear that the Clintons’ neoliberalism has waned.

Former Bill Clinton Treasury Secretary Larry Summers—a Third Way Democratic Leadership Council-type if there ever was one—has been advising Hillary Clinton.

His task? According to the New York Times, working with 200 experts to help the would-be 2016 Democratic nominee figure out “how to address the anger about income inequality without overly vilifying the wealthy.”

All this follows a great deal of commentary about how Hillary Clinton will win over the working class in next year’s presidential election.

She did well with working-class white Democrats in the 2008 primaries, winning places like Kentucky and West Virginia by landslide margins.

She was, of course, running against Obama, the candidate of “eggheads and African Americans.”

This might have had at least as much to do with her appeal as her penchant for downing drinks in front of the television cameras at blue-collar pubs.

Nevertheless, the Clinton dynasty was built by appealing to ordinary Americans who believe the system should reward people who “work hard and play by the rules.”

Even the welfare-reform proposals that irritated some Democrats to the Clintons’ left were premised on a working-class-friendly desire to shift resources from the indolent to the hard-working, deserving poor—making welfare a “second chance, not a way of life.”

More recently, however, Democratic candidates for the House won a scant 34 percent of the working-class white vote in 2014.

Democrats competing in key Senate races didn’t do much better, even in Iowa, a rare state where Obama managed to win whites without a college education in both 2008 and 2012.

“If Democrats can’t figure out how to appeal to today’s working-class voters, then they don’t deserve to lead,” Bill Clinton’s 1992 pollster Stan Greenberg told the Los Angeles Times Ruy Teixeira, a demographer known for his confident predictions about the Democrats’ long-term electoral prospects, put it in less moralistic terms.

“Democrats, to win regularly, not just the presidency but other levels of government, they need to do better among … noncollege whites than they’ve been doing,” he told National Journal last year. “You can’t … just rely on the coalition of the ascendant.”

Not all Democrats agree.

The noncollege white men who have been the biggest problem for the party in recent years are shrinking as a share of the electorate while minority voters are growing.

The latter delivered Obama a second term while many of the former either stayed home or voted Republican.

That’s good news for a party that hasn’t won the white vote in a presidential election since 1964—though when Democrats have won the presidency, they have at least been competitive with those voters while winning supermajorities of most minority voting blocs.

“The vote of a tattooed 20-something hipster in Des Moines is no less helpful than that of the 60-something farmer who lives a hundred miles north,” the liberal writer Paul Waldman observed in the Washington Post late last year.

The Democrats’ decline among working-class whites clearly hurts the party at the congressional level, however.

Minorities are concentrated in urban areas where the white working class is more broadly distributed. These white voters helped deliver Congress to the GOP in 2010 and 2014.

And it makes Democrats very dependent on high turnout among the “coalition of the ascendant” at the presidential level, something that only Obama has so far been able to deliver.

That’s why Hillary Clinton’s vaunted appeal to the white working class is one of her selling points.

Geoff Garin, a Democratic pollster who worked for Clinton’s 2008 campaign, told the that she “demonstrated a significant ability to not only win votes from working-class white women but to connect with them on a personal level.”

Perhaps.

But now effectively running with rather than against Obama, her numbers among working-class voters have returned to levels more typical of a 2010s Democrat.

According to a Wall Street Journal NBC News poll, Clinton went from a slight 43 percent to 44 percent deficit among whites without college degrees to being viewed positively by just 32 percent, with 48 percent having a negative view, in 2014.

Observing that working-class whites have been alienated by “an increasingly urban, culturally cosmopolitan” Democratic Party, National Journal’s Alex Roarty argues, “The most pressing need for Clinton, however, might be devising an economic agenda and message able to convince some of those voters to back Democratic candidates.”

Is there any candidate less equipped to do this than the Hillary Clinton of 2016?

The Clintons are the anti-Buchananites: culturally liberal, economically and politically globalist, hawkish on foreign policy, representing what Irving Kristol called the New Class to a far greater extent than they stand for anyone in Middle America.

Even Bill Clinton’s legacy is as much NAFTA and GATT, financial deregulation, and a not terribly Keynesian approach to economics—“Rubinomics” held that increased tax revenue would stimulate the economy by reducing the federal budget deficit and lowering interest rates—as welfare reform and an expanded earned income tax credit.

He was the last Democratic presidential candidate to win in places like Arkansas, Louisiana, and West Virginia, but he also cemented the party’s status among socially progressive upscale whites.

Despite her campaign’s hope to win over working-class “waitress moms”—a typically condescending description dreamed up by political consultants—Hillary Clinton represents all this without the charm.

She speaks for a strange new liberalism where the rich and the politically powerful rub elbows and exchange favors, where the rewards flow to the most affluent parts of the Democratic coalition while the inner cities remain worse off than the neighborhoods of the noncollege whites who have abandoned the party.

That might still be enough to beat a Republican.

But progressives may find once again that even in victory, they can only lose with a politician like Clinton.

Monday, 29 June 2015

On This Rock

Tu es Petrus, et super hanc petram aedificabo Ecclesiam Meam. 

Considering the claims that the See of Rome makes, then, while individual Popes might be or have been charlatans or lunatics, the institution itself is either telling the truth in making those claims, or else it is indeed the Antichrist, and any professing Christian who does not submit to Rome on Rome’s own terms must believe it to be so.

Who will call good evil by pointing to the Papacy’s defence and promotion of metaphysical realism, of Biblical historicity, of credal and Chalcedonian orthodoxy, of the sanctity of human life, of Biblical standards of sexual morality, of social justice, and of peace, and by then saying, “Behold, the Antichrist”? That is the question.

Ah, Faith of Our Fathers. Father Faber was the son of the Rector of Stanhope, and, like a striking number of Tractarian or Tractarian-influenced converts, his ancestry was largely Huguenot (as is part of mine, although another side is Highland Catholic).

So his “fathers chained in prisons dark” were not quite as his thoroughly rousing hymn would suggest.

The Lanchester Review: Blairism Is No Solution To Labour’s Identity Crisis

Richard Cotton makes a powerful case.

Fundamentally Speaking

On Saturday, at a conference on Catholic education, I heard a very distinguished speaker explain, among many other things, that there was still a Protestant fundamentalist adoption agency in this country, acting fully in accordance with its principles.

The Catholic agencies had long ago stopped mentioning the Faith, although they had been founded to stop the placing of Catholic orphans with Protestant families who often even changed their Irish names.

As soon as they stopped insisting that they would place children only with practising Catholics who adhered to Catholic principles, then they had no defence against, for example, being required to place children with same-sex couples, who would now include David Cameron's same-sex married couples.

But the Protestant fundamentalists had continued to insist that they would place children only with Protestant fundamentalists, and they are still doing so, untroubled by the present Conservative Government, by the previous Coalition, or by the Labour Government that is blamed for having closed down the Catholic adoption agencies.

It did not. Effectively, they closed themselves down. If they had stuck to their founding principles decades before, then that Government would have left them alone. That is not a guess. The record proves it.

In the pub afterwards, my friend and I were discussing the ridiculous list of "British values" bequeathed to England's grateful schools by Michael Gove. Political systems that are not values. Values shared with scores of other countries. You know how it goes.

But as my friend said to me, this kind of thing, "led to people like us hiding in priest holes for hundreds of years." Quite so.

Within living memory, Catholics had worse relations with the British State than were enjoyed by the Muslims of, among other places, the Arab world and the Indian Subcontinent.

Any teenager or undergraduate who had attended that conference, which also heard a Labour MP express his deepening scepticism about the EU, would have been a prime target for identification as having exhibited "radicalised behaviour".

Well, frankly, I hope that any teenager, any undergraduate or anyone else who attended that conference was indeed radicalised by it. I certainly was.

Grecian Earned

In 1953, Germany's debts were cancelled by a range of countries.

Including Greece.

Just saying.

Let's Not Lose Our Marbles

Britain's, and especially London's, museums express Britain's, and especially London's, global role and character.

In whatever context it might be uttered, "They should be sent back to where they came from" is not a sentiment in keeping with that role or character.

Cobblers On The Cobbles

Coronation Street is now a top quality sitcom, but that is what it is. The only things missing are the laughter track and the "You have been watching" at the end.

In coming weeks, the Dobbs and Tinker clans are going on a camping trip where they will run into a "wilderness explorer" played by Paddy McGuinness, who had never acted until his mate, Peter Kay, cast him the sublime Phoenix Nights, and who is best-known for presenting a game show.

Of course, Corrie has always been rich in humour. But this is something else. This is about the centralisation of ITV. To the London media, "the North" means two things: Manchester and comedy.

Thus, Channel 4 billed the superb recent police procedural No Offence as a "comedy drama", when in fact it contained no more jokes or funny situations than would occur in real life, and much of it was very dark indeed. Brilliantly so, in fact.

How about a competition to find the best idea for a one-off drama, and the best idea for a one-off documentary, from within the working class, most obviously defined as the social groups C2DE, in the area covered by each of the 12 ITV regions? It is just a pity that there is only one ITV region in Wales.

The winners would be broadcast in two regular primetime spots, one for drama and one for documentaries, over 12 weeks. Not necessarily on ITV. But that network does happen to have the regional boundaries in place, and, apart from the Welsh thing, those do happen to be singularly suitable to this task. It would certainly put the BBC to shame.

This exercise could be repeated annually. As could be a competition to find the best idea for a one-off drama, and the best idea for a one-off documentary, from within the rural communities in the area covered by each of the 12 ITV regions. The ITV London region extends well into the Home Counties, so this would be perfectly feasible.

Again, the winners would be broadcast in two regular primetime spots, one for drama and one for documentaries, over 12 weeks.

Long-Term Economic Plan

On the train from Newcastle to Carlisle on Saturday, I marvelled, as I have done in the past, at the fact that every town in the Tory part of Northumberland had a railway station.

But not in the old mining, and still solidly Labour-voting, south east corner, where half the county's population lives.

And certainly not in County Durham, where a town the size of, for example, Consett, has not had a railway station since as long ago as 1955.

Yet Consett was a major steel town in those days, and Durham at large was a major mining county. It is generally supposed that everyone had expected that those things would always remain the case.

But the record of Beeching and before hints at something else.

Coal, steel and rail were known as the Triple Alliance, especially with reference to their respective trade unions during the three industries shared heyday.

Trains, like tracks, are made of steel, and they used to run on coal; they still do run on the electricity that is largely produced by the burning of coal, even though we do insist on importing it even while sitting on vast reserves of it.

Likewise, cutting off the coalfields and the steel towns by taking away their railway connections was a slow but inexorable way of killing them. 20 or 30 years later, they were "in the middle of nowhere". They had not always been so.

Moreover, just as the loss of the railways was fatal to heavy industries whose goods were not appropriate to other means of transport, so, in turn, the loss of those industries was fatal to the railways.

Reshaping, indeed, Dr Beeching. Reshaping, indeed.

But now that it looks as if no local authority in this country is ever going to permit fracking, the case has become even more pressing for a return to the coal that, unlike anything approaching enough shale gas, we know for a fact is there.

And thus the case for the only realistic means of transporting it, and for the industry that is necessary to build and maintain that means.

Signal to the Banks and Financiers

Here:

We call on David Cameron to support the organisation of a European conference to agree debt cancellation for Greece and other countries that need it, informed by debt audits and funded by recovering money from the banks and financial speculators who were the real beneficiaries of bailouts (Greek leader calls last ditch referendum on bailout, 27 June).

We believe there must be an end to the enforcing of austerity policies that are causing injustice and poverty in Europe and across the world.

We urge the creation of UN rules to deal with government debt crises promptly, fairly and with respect for human rights, and to signal to the banks and financiers that we won’t keep bailing them out for reckless lending.

Frances O’Grady General secretary, TUC
Len McCluskey General secretary, Unite the Union
Paul Kenny General secretary, GMB
Manuel Cortes General secretary, TSSA
Sarah-Jayne Clifton Director, Jubilee Debt Campaign
Paul Mackney Chair, Greece Solidarity Campaign
Nick Dearden Global Justice Now
Owen Epsley War on Want
James Meadway New Economics Foundation
Ann Pettifor Prime Economics
Diane Abbott MP
Dave Anderson MP
Richard Burgon MP
Jeremy Corbyn MP
Jonathan Edwards MP
Roger Godsiff MP
Harry Harpham MP
Carolyn Harris MP
George Kerevan MP
Ian Lavery MP
Clive Lewis MP
Rebecca Long-Bailey MP
Caroline Lucas MP
John McDonnell MP
Liz Mcinnes MP
Rachael Maskell MP
Michael Meacher MP
Grahame Morris MP
Kate Osamor MP
Liz Saville-Roberts MP
Cat Smith MP
Chris Stephens MP
Jo Stevens MP
Catherine West MP
Hywel Williams MP

Austerity Will Not Cut The Deficit

Michael Meacher writes:

Osborne’s 8 July budget will be forced through in the teeth of all economic experience.

The history of the last 70 years demonstrates one conclusion irrefutably: austerity is the wrong way to cut deficits.

After the second world war had dramatically drained Britain’s wealth and left the country with colossal debts amounting to 260% of GDP, these huge deficits were easily tamed by fast economic growth in the post-war years.

President Clinton achieved a similar turnaround in the US after he inherited an enormous deficit in 1992 and ended his 8-year presidency with none, largely due to rapid economic growth.

Again, the Swedish high budget deficit was successfully brought down during 1994-8 by a policy of fairly fast economic growth.

Even in the US in recent years, despite the political deadlock and a largely non-functional Congress, the US has achieved a far bigger and faster recovery from recession than Europe, again as a result of the priority given to growth by Obama.

What is striking about these previous periods of large deficits is that debt was not a significant political issue. The public were not scared by the size of the public debt.

For every year between the mid-1940s and the mid-1960s the debt was far, far higher than at any time since 2008, during which time it hasn’t peaked beyond 80% of GDP.

Yet there was no panic, indeed it was a time of huge confidence as the foundations of the Welfare State were being laid.

Had the British public been as acutely frightened by their leaders about the debt ration in the post-war period as they are being panicked now by Osborne, the welfare state, the inspiration not only of Europe but of the whole world from China and Singapore to Brazil and Mexico, would never have been born.

Equally remarkably, when Harold Macmillan as new prime minister in July 1957 told the British people that they had “never had it so good”, the size of the government debt at that time was 120% of GDP, far far higher than the debt ratio of about 70% in 2010 when Gordon Brown was accused of mortgaging Britain’s future by profligacy.

So why the vastly different reaction to public debt in those previous times compared with today?

The answer is that Osborne has been skillful at framing an (untrue) narrative to suit his political purposes while Labour has utterly failed to offer a (true) counter-narrative to Osborne’s fetish with austerity.

Osborne has successfully manipulated the issue of austerity to provide the excuse to achieve his real aim of shrinking the State, squeezing the public sector and privatising almost all public assets.

Labour on the other hand has been all over the place between the Blaitite rump who largely support Osborne, a shadow chancellor who never stamped his mark on a credible alternative policy, and a Left whose calls for growth were ostentatiously ignored.

Labour now desperately needs one central theme: Austerity won’t cut the deficit, but growth will.

Containment Has Not Worked

The incomparable Patrick Cockburn writes:

Effective action to prevent further attacks by Isis-inspired gunmen requires a recognition of the failure of the policy of containment of Isis pursued over the last year by the US, Britain and their allies.


In the aftermath of an atrocity like Sousse, it would be naïve to expect David Cameron to admit to this failure and to recommend new and more effective policies.

Unsurprisingly, he expressed defiance towards Isis, commiseration with its victims and pledged a “full spectrum response” to the massacre.

There was waffle about Isis “attacking our way of life and what we stand for, so we have to stand united with those that share our values”.

But nowhere in Mr Cameron’s interview with the BBC or speech in the House of Commons was there much sign of understanding what he is up against.

What has really changed since 9/11 and 7/7 is that today terrorist attacks are promoted by a powerful state based in northern Iraq and eastern Syria that has an army more powerful than most members of the UN.

It was all very well for Mr Cameron to insist that the UK had carried out 300 air strikes and this is more than any other country aside from the US which has carried out 6,000.

What he did not address was the fact that despite these airstrikes Isis last month defeated the Iraqi army at Ramadi and the Syrian army at Palmyra.

Making an issue of the fact that the BBC refers to “Islamic State” suggests that Mr Cameron has not really grasped the seriousness of developments in Iraq and Syria over the last year.

Mr Cameron has played a part in opening the door to Isis by joining the campaign to overthrow Muammar Gaddafi in Libya, which has led to that country collapsing into anarchy which provides fertile soil for Isis to take root and grow.

This in turn is contributory cause to Isis expanding in Libya. 

There is no sign that Mr Cameron or any of the Western powers have learned any lessons from what happened in Libya.

When Saudi Arabia started bombing Yemen earlier this year its actions were backed by the US, Britain and other powers, though a predictable result of this air campaign has been to weaken the Yemeni army, the one institution holding the country together, and lead to Isis becoming an influence there for the first time.

Al-Qaeda in the Arabian Peninsula (AQAP) that used to be penned into remote villages has become a power across south Yemen.

Talk by Cameron of combatting “the narrative of the terrorists” shows a lack of seriousness on the part of the government.

What it really needs to do is find effective local partners in the Middle East which means better relations with Iran and the coalition it leads, which is fighting Isis, at the risk of offending the Sunni states like Saudi Arabia, Turkey and the Gulf monarchies whose sympathies are with the Sunni communities in which Isis has taken root.