Thursday, October 29, 2009


"We lost the fight, we didn't lose the argument" Noemi Klein

David Seaton's News Links
If you don't speak Spanish, the video featured above will probably seem like a spirited rendition of gibberish, but in fact the song "La Muralla" (The Wall) is one of the battle hymns of Salvador Allende's Chile.

The words of this song were written by the Afro-Cuban poet Nicolás Guillen and set to music by the Chilean folksingers Quilapayún.

Quilapayún and Victor Jara sang the songs that still identify the Salvador Allende period.

In the video, "La Muralla" is sung by the post-Allende Chilean folk group "Ventiska", and "the special guest star", singing lead (the old guy with the beard) Ricardo Venegas, is one of the original Quilapayún. 

When Pinochet lowered Chile into the "night and fog" of the torture chamber, the mass grave and the Chicago School of Economics, the members of Quilapayún managed to escape, but Victor Jara didn't... he was arrested, tortured and killed. 

The song, "La Muralla" became an instant classic. It is sung at every memorial to Salvador Allende (they fall on September 11th) and in itself has become a hymn of the Spanish speaking left, both in  all of Latin America and Spain itself. In any concert where it is sung it brings the audience to their feet.

To anyone who lived through that period in the Spanish language it brings back memories of a time when young people believed that a better world was possible and were ready to sacrifice their lives to make it happen. Thanks to the Chicago School of Economics and the CIA, many of them did.

Now that George W. Bush, Milton Friedman, Alan Greenspan, Ronald Reagan and Margret Thatcher have crashed and burned it is time for the left to crawl out of the rubble, dust itself off and get busy.

The left has been buried under the rubbish that neoconservatism has dumped on it for so long that many people, including (especially?) many people of the left have forgotten what the left is.

This is where poetry can help.

Poetry exists in the place where the heart and the mind speak fluently to each other.

Guillen's verses express in a very few words what the left is about: human beings joining together to defend their humanity and all the simple, humble things that make life human, against the people, things and situations that make being human impossible. "Solidarity" is a clumsy word for brotherhood.

The song expresses these ideas, but more than anything else it expresses the emotion that is felt when these ideas are put into practice

I've translated Guillen's poem into English as best I can, unfortunately in the process I've destroyed the cadences of its beautiful Spanish.

The Wall – Nicholas Guillen
To make this wall, bring me all the hands:
From the Blacks, their black hands, from the Whites, their white hands.

A wall to go from the sea to the mountains, from the hills to the sea,
all the way to the horizon...
- Knock, knock!
- Who’s there?
A rose and a carnation ...
- Open the wall!
- Knock, knock!
- Who’s there?
The Colonel’s sword ...
- Close the wall!
- Knock, knock!
- Who’s there?
The dove and the bay leaf ...
- Open the wall!
- Knock, knock!
- Who’s there?
The scorpion and the centipede ...
- Close the wall!

The heart of a friend, opens the wall;
the poison and the dagger, closes the wall;
the myrtle and mint, opens the wall;
the tooth of the serpent, closes the wall;
the nightingale in the flower, opens the wall ...

Let's raise a wall
joining all our hands;
The Blacks, their black hands
The Whites, their white hands.
A wall to go from the sea to the mountains, from the hills to the sea,
all the way to the horizon...
Here it is in Spanish just in case anybody wants to sing along:

Para hacer esta muralla,
tráiganme todas las manos:
Los negros, su manos negras,
los blancos, sus blancas manos.
una muralla que vaya
desde la playa hasta el monte,
desde el monte hasta la playa, bien,
allá sobre el horizonte.

—¡Tun, tun!
—¿Quién es?
—Una rosa y un clavel...
—¡Abre la muralla!
—¡Tun, tun!
—¿Quién es?
—El sable del coronel...
—¡Cierra la muralla!
—¡Tun, tun!
—¿Quién es?
—La paloma y el laurel...
—¡Abre la muralla!
—¡Tun, tun!
—¿Quién es?
—El alacrán y el ciempiés...
—¡Cierra la muralla!

Al corazón del amigo,
abre la muralla;
al veneno y al puñal,
cierra la muralla;
al mirto y la yerbabuena,
abre la muralla;
al diente de la serpiente,
cierra la muralla;
al ruiseñor en la flor,
abre la muralla...

Alcemos una muralla
juntando todas las manos;
los negros, sus manos negras,
los blancos, sus blancas manos.
Una muralla que vaya
desde la playa hasta el monte,
desde el monte hasta la playa, bien,
allá sobre el horizonte...
That ought to get it. DS

Wednesday, October 28, 2009

What I like about a long war in Afghanistan, or why America desperately needs a quaqmire

Possibly the world's most valuable political analyst?
We simply do not have the Afghan partners, the NATO allies, the domestic support, the financial resources or the national interests to justify an enlarged and prolonged nation-building effort in Afghanistan.(...) The locals sense they have us over a barrel, so they exploit our naïve goodwill and presence to loot their countries and to defeat their internal foes. Thomas L. Friedman - NY Times
David Seaton's News Links
My dad once told me about an interesting fellow he worked with in a large rug company. When the CEO was choosing new rug lines this guy's input was vital because... he was always wrong:  not sometimes, always.

If this man saw some new prototype just in from the design department and showed any enthusiasm for it, experience had taught the top management that nobody anywhere would ever buy it and conversely if he thought the proposed product was a dog, they would go into  night shifts to flood the market with the rug.

My father considered his colleague to be a veritable phenomenon of nature and one of the most valuable men in his organization.

My father assured me that to be always wrong is as rare and wonderful as to be always right. His wise words have stayed with me.

Among political analysts, Thomas L. Friedman is that man.

Just to refresh my reader's memory, lets have a little peek at his record on Iraq:

During the lead up to the war he said,
"The way you get that compliance out of a thug like Saddam is not by tripling the inspectors, but by tripling the threat that if he does not comply he will be faced with a U.N.-approved war."
After no WMD were found he said,
"The stated reason for the war was that Saddam Hussein had developed weapons of mass destruction that posed a long-term threat to America. I never bought this argument… The WMD argument was hyped by George Bush and Tony Blair to try to turn a war of choice into a war of necessity."
"The right reason for this war, as I argued before it started, was to oust Saddam's regime and partner with the Iraqi people to try to implement the Arab Human Development report's prescriptions in the heart of the Arab world. That report said the Arab world is falling off the globe because of a lack of freedom, women's empowerment, and modern education. The right reason for this war was to partner with Arab moderates in a long-term strategy of dehumiliation and redignification."
Finally in August of 2006 he wrote,
"Whether for Bush reasons or Arab reasons, democracy is not emerging in Iraq, and we can’t throw more good lives after good lives"
His scrambling to maintain some reputation as an analyst and pundit led him to a series of statements that have come to be known as the "Friedman Unit", a period of six months, where if his suggestions were followed, everything would turn out fine. Here is a sample of Friedman units ripped from Wikipedia:
"The next six months in Iraq... are the most important six months in U.S. foreign policy in a long, long time" November 30, 2003.

"What we're gonna find out... in the next six to nine months is whether we have liberated a country or uncorked a civil war." October 3, 2004.

"I think we're in the end game now.... I think we're in a six-month window here where it's going to become very clear" September 25, 2005.

"I think the next six months really are going to determine whether this country is going to collapse" December 18, 2005.

"I think that we're going to know after six to nine months whether this project has any chance of succeeding" January 23, 2006

"I think we are in the end game. The next six to nine months are going to tell whether we can produce a decent outcome in Iraq." March 2, 2006

"we're going to find out... in the next year to six months - probably sooner - whether a decent outcome is possible" May 11, 2006.
Today his message is:
Let’s finish Iraq, because a decent outcome there really could positively impact the whole Arab-Muslim world, and limit our exposure elsewhere. Iraq matters.
His reason seems to be because:
My last guiding principle: We are the world. A strong, healthy and self-confident America is what holds the world together and on a decent path. A weak America would be a disaster for us and the world. 
So now from 
"democracy is not emerging in Iraq, and we can’t throw more good lives after good lives"·
We arrive at "we can't throw more good lives after good lives in Afghanistan" because...
"Iraq matters".
In my opinion this is all shorthand for, "if the US armed forces are tied down in Afghanistan, we wont be able to use them anywhere else".

Where might that "anywhere" be?

My bet would be against Iran.

A lot of perspicacious analysts have always thought that in invading Iraq the real object was Iran. That is why Afghanistan was considered such a boring distraction. You probably remember how all the neocons  in those euphoric days were talking up, "real men go to Tehran". 

All the neocons have ever really cared about is Iran because it is Israel's bête noire and Thomas L. Friedman is the smiling face of neoconnerie.

With the United States armed forces enmeshed  and maxed out in  Afghanistan, a full scale war with Iran? ... fuggedaboutit.

The Russians know it, the Chinese know it, the Iranians know it,  and 
most of all the Israelis know it.

So the bright side of the war in Afghanistan  is that a war with Iran would be a total disaster with hundreds of thousands of dead and might cause a worldwide depression as oil prices skyrocket and would only serve Israel's and a few corrupt sheik's interests, certainly not America's. And as Friedman says,

"We simply don’t have the surplus we had when we started the war on terrorism"
So, if a low intensity endless quagmire-nightmare is the only thing standing between the USA and the abyss of war with Iran, the only excuse we can hand AIPAC for not going to war with Iran, then the president is right, Afghanistan is the "good" war.

Thomas Friedman, like my dad's colleague, is  the most reliable bellwether that America is on the right track in Afghanistan.

So Mr. President, send the troops, the more the merrier: Afghanistan is the best excuse we'll ever have for blowing off the Israelis and hey, we are still fighting terrorism, aren't we? DS

Monday, October 26, 2009

India holds up a mirror for America to see itself

  "Evil requires the sanction of the victim." Ayn Rand"
 David Seaton's News Links
The other day in my perusings I stumbled upon this troubling jewel
Not only do Indians perform more Google searches for (Ayn) Rand than citizens of any country in the world except the United States, but Penguin Books India has sold an impressive number of copies -- as many as 50,000 of Atlas Shrugged and The Fountainhead each since 2005, a number comparable to sales there by global best-seller John Grisham. And that's not counting the ubiquitous pirated copies of her works that are hawked at rickety street stalls, sidewalk piles, and bus stations -- an honor that Rand, a fierce defender of intellectual property rights, probably would not have appreciated. Foreign Policy
To put this information into some perspective I would ask you to read a paragraph from Wikipedia:
The World Bank estimates that 456 million Indians (42% of the total Indian population) now live under the global poverty line of $1.25 per day (PPP). This means that a third of the global poor now reside in India.(...) India has a higher rate of malnutrition among children under the age of three (46% in year 2007) than any other country in the world.
Now into that context, to see what Indians are so eagerly googling, let's mix in the following sayings of Ayn Rand, which though few, hopefully give the full flavor of her "Objectivist" philosophy:
"Evil requires the sanction of the victim."

If any civilization is to survive, it is the morality of altruism that men have to reject.

I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine.

Civilization is the progress toward a society of privacy. The savage's whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.

It only stands to reason that where there's sacrifice, there's someone collecting the sacrificial offerings. Where there's service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master.

Money is the barometer of a society's virtue. 
Now you may ask yourself, what possible attraction could this sort of paen to sociopathic selfishness have for the countrymen of that paragon of selflessness, Mahatma Gandhi? How can you revere one and also revere the other?

You can't. Rand is in, Gandhi is out.

How is this put together?

Again from Wikipedia:
A disproportionally large share of poor are lower caste Hindus. According to S. M. Michael, Dalits constitute the bulk of poor and unemployed. Many see Hinduism and its subsidiary called caste system as a system of exploitation of poor low-ranking groups by more prosperous high-ranking groups. In many parts of India, land is largely held by high-ranking property owners of the dominant castes that economically exploit low-ranking landless labourers and poor artisans, all the while degrading them with ritual emphases on their so-called god-given inferior status.
"Dalit" is a politically correct term for "untouchable"; to put this into clearer focus, let's hear from Mahatma Gandhi on the subject:
Removal of untouchability means love for, and service of, the whole world and thus merges into Ahimsa. Removal of untouchability spells the breaking down of barriers between man and man and between the various orders of Being."
Now it is obvious that the Dalits (untouchables) and the rest of India's 456 million poor, living on less than $1.25 a day, are not the ones who are googling Ayn Rand, isn't it? It would be safe to assume, I imagine, that the googlers belong to what the paragraph above calls the "more prosperous high-ranking groups".

The mechanism at work here is also obvious. The  extreme poverty of India  has always been a great embarrassment to Indian yuppies when speaking to foreigners and the cruelty of its ancient caste systems is universally condemned throughout the world by all the other belief systems. Till now untouchability and  the extreme poverty of India have been intellectually indefensible. How to rephrase them for the globalized world, a place where India's elites are hot to trot?

At this point, along comes a prestigious  American, a major cult-figure,  Ayn Rand, the guru of Sri Alan Greenspan no less, someone who with her  indifference to suffering, with the clockwork logic of her exposition and the elaborate intellectual edifice constructed around what boils down to, "bugger you, I'm alright Jack", justifies their system in all its time-hardened egotistical racism.

Not only do they have the absolution of their ancient religious traditions, they now have the apostolic blessing of one of the guiding lights of ultra-modern, western, anarcho-capitalism.

Gotta be a hit.

Something that is fun and often productive is to run things backwards and see what turns up. Let's try that on Ayn Rand in India.

Here is the scenario: Ayn Rand is a big hit with high-cast Indians, who would like to ignore India's racism and justify their indifference to its poverty, but long before she made it in India, she was a big hit in the USA: could it be for the same reasons?

Could Ayn Rand's popularity in India hold the key to her popularity in the United States?

Could India be holding up a mirror for us to contemplate ourselves?

Are we looking to Ayn Rand for the same absolution she gives the Indians?

If you stop to think about, since South Africa abandoned apartheid, what other large, densely populated country besides India has such a history of race problems or where the poor are so abandoned to their fate as the USA?

It is curious to observe the relation Rand's "thinking" and her followers to our present predicaments.
"If any civilization is to survive, it is the morality of altruism that men have to reject."   Ayn Rand
"You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost." Milton Friedman
"Left to their own devices, it is alleged, businessmen would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings. Thus, it is argued, the Pure Food and Drug Administration, the Securities and Exchange Commission, and the numerous building regulatory agencies are indispensable if the consumer is to be protected from the `greed' of the businessman. But it is precisely the `greed' of the businessman or, more appropriately, his profit-seeking, which is the unexcelled protector of the consumer." Alan Greenspan in a 1963 article, ``The Assault on Integrity'' for  "The Objectivist" magazine - quoted by Ayn Rand in her 1967 book, "Capitalism: The Unknown Ideal''
One of the upsides of our present predicament has been the defenistration of luminaries like Milton Friedman, Alan Greenspan and fellow travelers. This from the Financial Times:
The Washington Consensus, the organizing idea behind the global advance of laisser faire economics, has been unceremoniously buried.(...) The crisis has restored the legitimacy of the state: bankers have been dethroned, Alan Greenspan defrocked and economists exposed. Regulation is no longer a term of abuse. Adam Smith has made way for John Maynard Keynes as fiscal policy has been rehabilitated as a tool of economic management. Phillip Stephens - Financial Times
Or this from BusinessWeek:
The cost included a Hobbesian view of business -- nasty, brutish and every man for himself -- and a rejection of the idea that ultimately we're all in this together. Which is precisely what we do not need at this time of increasing global interdependence. (...) In this worldview, "business ethics" is an oxymoron, not because of bad behavior but because ethics can't even exist apart from some notion of a "relationship" to something or someone else. Subordinating everything to shareholder value is, literally, anti-ethical. Charles H. Green - BusinessWeek
Here, Charles Green, an MBA from Harvard, has gone straight to the heart of the whole matter when he says, "ethics can't even exist apart from some notion of a "relationship" to something or someone else".

That is really what human life is all about. Nothing is more defenseless and miserable than an isolated human being.

Our terror of being the only human on earth is the romance of Robinson Crusoe. Crusoe's joy at encountering Friday, saving his life and becoming his friend is one of the most powerful metaphors in literature.
The human being is a social anthropoid, whose phenomenal success as a species is due to its unique capacity for empathy, altruism and sacrifice for the common good. If selfishness were such a survival plus, then the common house cat would be the "master of the universe" and not human beings.

Since we wandered over the African savanna in small groups of hunter-gatherers, naked, without even fire, in fear of lions and hyenas, a sprained ankle or a broken bone, during those hundreds of thousands of years, the "common good" existed. If humans hadn't recognized it and sacrificed for it we wouldn't be here today.

Over most of our history that was our life, only of late have we taken a sinister detour. That wandering togetherness is what our brains, inhabiting spirits and digestive tract are built for and look where we are now.

Over a relatively few millennia we have woven ourselves into hell.

Selfishness is precisely the least human of our traits and that it has become a driving force in our world is perhaps the central problem we face... our paradox: humans that dehumanize themselves.

Certainly, unless we can recreate the essence of our cooperative origins on a mass scale within our present technological development, there seems to be no solution in sight to this hell we have created.

Ayn Rand is probably (with Milton Friedman) the most profoundly immoral and destructive thinker that America has ever produced.  Milton Friedman believed that greed was humanity's sole motivator and Rand believed that selfishness was. Both considered what western civilization has traditionally marked as deadly sins as virtues not defects. Their followers are legion and we live among the wreckage they and their "virtues" have created. DS

Tuesday, October 20, 2009

Afghan slam bam, thank you mam

"I can't sing and I can't dance, but I can lick any SOB in the house.".
Jack Dempsey - AKA reality
"He is a very smart fighter; when he's fighting he is thinking all the time. But, all the time he was thinking I was hitting him." Jack Dempsey

David Seaton's News Links 
At this point in time the media are full of talk about the agonizingly thorough  decision making process underway in the White House as President Obama analyzes his options in Afghanistan and decides whether or not to send the 40,000 extra troops that General McChrystal has requested.

A lot of people are waiting for his decision:

Those Afghans who have thrown in their lot with the United States are waiting for his decision.

All of the NATO allies who are keeping troops there against the public opinion of their voters are waiting for his decision.

The men and women of the United States armed forces who are already there or may be on their way there soon and their families are waiting for his decision.

This decision should be  easy, because no decision the president takes will magically pull America's chestnuts out of the South Asian fire or provide anything like a happy ending.

Why do such miserable alternatives simplify things?

Because, sometimes the more screwed up things become the simpler they are to deal with.

When no solution is really any good, getting to "less bad" is often not rocket science.

The solution is to send the troops.

The bottom line is that this war is no longer about oil pipelines or democracy or Afghan women's right to wear miniskirts and to learn how to read or supporting "moderates" or about defeating terrorism or catching Osama... it certainly is no longer about winning.

OK, so what is the war in Afghanistan now all about?

The war in Afghanistan is now about salvaging what little is left of America's "bella figura".

"Bella figura" (beautiful face) is Italian for looking good as opposed to "brutta figura" (ugly face) which is Italian for looking like a "schmuck", which is Yiddish for "dumb asshole".

After eight years of Bush the United States has been left with a bruttissma figura. Absurd, ugly, sinister, incompetent... mad, bad and dangerous to know.

Terrible for business.

Restoring America's bella figura was what electing Barack Obama was all about and, as I have already pointed out, that was the reason that the Nobel Committee, at the risk of universal ridicule, awarded him the Nobel Peace Prize.

America's bella figura is what is known as a "public good", it represents a factor of stability in a turbulent world. It is going to diminish, but it should do so in an orderly fashion, not with people trampling each other on the way out the door.

My "inner Lenin" may be tickled to see this stability crumble, but my "inner poor slob just trying to make it to the end of the month" is horrified.

America will have to withdraw from Afghanistan, it is a hopeless cause, but the withdrawal must maintain some scrap of dignity and the troops that are already serving there must not be seen to be hung out to dry, to be exposed to uneccesary danger, because there are not enough of them to hold the ground.

No matter what is done, it is going to be ugly and cruel... it is too late for it to be any other way. Less ugly and less cruel are better than more ugly and more cruel... that is as good as it gets.

This is where intuition, "zen" or the sixth sense of one who is called to lead comes in.

To be perceived to be indecisive is the death knell of a leader.

Leaders are chosen for their ability to decide.

Much criticism was leveled at George W. Bush AKA "the decider", for his taking decisions "from the gut", but the problem wasn't that Bush acted on impulse, the problem was that he had such stupid intestines.

Mr. president, you have done your homework.

All the options stink.

Just hold your nose and do it. DS

Monday, October 12, 2009

Obama's Nobel Prize is richly deserved

David Seaton's News Links
There has been much controversy swirling around president Obama's Nobel Peace Prize, which I wont bore my readers by recapping. Basically the well intentioned criticism -- we can discount the ill intentioned -- boils down to, "why so soon, he hasn't done anything yet". They are all missing the point.

First, we should take a step back from the prize... it is very much a creature of the moment it is given. It is not some sort of universal "Mount Rushmore" of the good and the great: Mahatma Gandhi never received it and Henry Kissinger (a war criminal) and Menachem Begin and Yasser Arafat (terrorists) did.

So the Nobel Peace Prize is not like being made a Saint in the Catholic Church and getting your own office in heaven.

What the prize does is to send a message.

If you look at the Nobel Peace Prizes awarded since 2001 you can see a pattern:
  • 2001 - United Nations, Kofi Annan 
  • 2002 - Jimmy Carter 
  • 2003 - Shirin Ebadi(first Muslim woman to win the prize) 
  • 2004 - Wangari Maathai (African woman ecologist) 
  • 2005 - International Atomic Energy Agency, Mohamed ElBaradei 
  • 2006 - Muhammad Yunus, Grameen Bank (micro-credit) 
  • 2007 - Intergovernmental Panel on Climate Change, Al Gore 
  • 2008 - Martti Ahtisaari (UN diplomat and peacemaker)  
The thread running though it all being, "the Nobel Committee abjures George Walker Bush and all his works".

So, Bush has gone, you say, why give the award to Obama so soon?

Bush is gone, but not what he did.

George W. Bush pulled the mask off the United States of America and Barack Obama is putting the mask back in place and that is why he has been given the prize.

What do I mean by "mask"?

Well, for anyone who has been reading Noam Chomsky for some time and paying attention, or who has recently read Naomi Klein's dot-connecting masterpiece, "The Shock Doctrine", it is no surprise to see the USA portrayed as a "rogue state": it has acted as one for decades.

In short: behind its mask of benevolent defender of democracy and human rights, the USA had been attacking and invading other countries and torturing people for a long, long, time.

But for much of the western world this was an "inconvenient truth"... unthinkable, bad for business and bad for morale, something not mentioned in polite, moderate-centrist, company.

From the vantage of international law, the USA is "like unto a whited sepulcher", which, to quote the King James Bible's protagonist, "indeed appear beautiful outward, but are within full of dead men's bones, and of all uncleanness".

What changed?

Bush made Noam Chomsky a main-stream, best-selling author.

In the year 2001 destiny crossed 9-11 with George W. Bush and Bush in all his arrogant, incompetent, ignorant, meanness ripped off America's mask and kicked the top off the sepulcher and what was behind the mask was too ugly for the world to face every day on the news and all the maggots that came crawling out of the sepulcher stank unbearably.

And then the economy collapsed.

What Madelene Albright called "the indispensable nation" turned out to be "the unspeakable nation" and the corner stone of the world system turned out to be a grave stone... and no alternative is sight.

Well, you say, Iraq and Afghanistan are still at war and the USA is still killing civilians; Guantanamo and Bagram prisons are still in business, the international currency of reference, the US dollar, appears headed for collapse, even golden California is bankrupt. What has changed?

The magic of Obama has put the mask back on.

Air Wick has been hung in the sepulcher and Glade has been sprayed.

And all in only nine months.

However, the powerful forces that lay behind that which we chose to call "Bush" are mobilizing the AstroTurf of birthers and teabaggers and yet unknown McVeighs and Oswalds conspire against this mild attempt, this pretense of normalcy, and so the horrid face behind the benign mask is reappearing at the edges... and downwind the sepulcher still has quite a breath on it.

So the Nobel Committee is rushing to do its part in propping up the idea of an imagined return to a pre-Bush America: A certain idea of the civilized world.

If, in the future, having replaced the mask and chased the worms back into the sepulcher, President Obama actually manages to change some of the underlying reality itself, he will rank up there with M. K. Gandhi and require no further prize, for then he will be able to hand out the peace prizes, not a roomful of Norwegians. DS

Wednesday, October 07, 2009

Robert Fisk and the coming dollar panic

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. Robert Fisk - Independent

Iranian Finance Minister Shamseddin Hosseini said on Tuesday he has in the past discussed with other countries the possibility of shifting oil trade away from the dollar, but such a step would require broad agreement. Hosseini, speaking to reporters on the sidelines of the semiannual meetings of the International Monetary Fund and World Bank, said he had not held any such discussions in recent days. "Some of the countries right now accept this idea," Hosseini said of a possible shift away from the dollar for oil. "But this is one of the subjects that needs more discussion and (to be) agreed on by everyone," he said through an interpreter. Hosseini said Iran agrees with the idea of shifting oil trade to a basket of currencies due to dollar weakness. "Generally we believe that the dominance of the dollar to the economy of the world is to the detriment of everybody," he said. "We are not alone in this belief."Hosseini said Iran has reaped billions of dollars of profits and averted losses by shifting reserves to the euro and other currencies from the dollar. Reuters

The problem that both China and the oil exporters have is that they're holding gigantic stashes of dollars that would suddenly be worth a lot less if they started trying to sell them off. So we've got this impasse, where lots of people complain about the dollar's supremacy but nobody seems willing to do anything about it. Justin Fox - Time
David Seaton's News Links
Robert Fisk has put is fox among the chickens with his scoop on the dollar.  According to Fisk the Gulf Sheiks along with China, Russia, Japan and France are all holding talks aimed at no longer pricing oil in US dollars.

Of course all of the above rushed to deny it. However Fisk insists in his story and if I have to choose between the word of Robert Fisk and word of a group of diplomats, I'll take Fisk every time.

What explanation could fit both versions?

Well, if these people have huge dollar reserves they are primarily concerned about the value represented by those reserves. They don't want to do anything to create a panicky run on the dollar which would drain the value from their reserves. That would explain the denials.

At the same time, if they believe that it is quite possible that the dollar might collapse in a foreseeable future, they would like to have a plan B to avoid being wiped out. That would explain the conversations.

The important thing for them would be, in case of a panic, not to trample each other to death running for the exits like in a theater of discotheque fire. They would have to have a commonly agreed on vehicle to transfer the value of the dollars to something else in an instant. They might only have a few hours to act before markets opened after some traumatic event that set off the panic. There would be no time to improvise, it would have to all go like clockwork or their economies would be ruined.

In other words, Fisk has observed them running a fire drill.

Why are they so worried?

Why have they so little confidence in America's ability to come through all this with flying colors?

What has happened?

I have my own little theory which I will share with you.

A while back I wrote this:
This particular crisis is about a vacuum in credibility. It isn't exactly America's "fall of the wall" moment... yet, but it is moving in that direction. Think what it means when a whole ideology crashes.

When I was a young fellow many people truly believed, and had made huge personal sacrifices all their long lives in the belief that history's inevitable march was toward socialism and that the Soviet Union was the genuine vanguard in that march. Many were still believing it right up till the moment when Gorbachev pulled down the Red Flag on the Kremlin.

It is impossible to exaggerate what an intellectual and political hole that left... a hole big enough for people like Alan Greenspan and George W. Bush to walk through.

Now that ideology has been trashed too.

The vacuum it leaves is of even greater proportions and those proportions are only beginning to sink in.

There is a curious wrinkle here. This is not just about dry figures, there is a grotesque, intensely human story that sums it all up: Madoff.

For me the Madoff story is the poster boy of the whole credibility collapse and the collapse of the American myth.


Let me explain.

When I first came to Europe, many years ago, I was amazed -- shocked at first -- at how so many Europeans of both the left and right, would affirm with a totally straight face that America was run by  its Jewish citizens. I thought that it was simple antisemitism at first, but it was and is much more complicated than that.

It is really the only explanation they can find for our success.

Most Europeans think that the average, white bread, boy and girl next door, all-American type, is just too spontaneous, too innocent, too narrow minded or just too plain dumb if you will, to have ever put together anything like our good ol' evil empire. 

Since the only Americans that Europeans find "European", which for most Europeans -- no matter how dumb they are -- means intelligent, educated, subtle and sophisticated, are the American Jews, Europeans just naturally assume the Jews are behind America's success. 

That is why the Madoff scandal embodies the damage this crisis has done to US credibility: American Jews have turned out to be just as dumb as American goyim.  

The Madoff scandal is the quintessential caricature of the whole moment. The idea that people had around the world had was that American Jewish people were the only people intelligent enough to really understand advanced financial products and it turns out that America's richest, therefore smartest, Jewish people were as stupid as it was possible to be, and even Madoff himself was, dumb to ever think he could get away with it, all this has destroyed centuries of malignant stereotypes of the Jews preternatural craftiness at the worst possible and inopportune moment.  The bottom line is: If America's richest Jews are just as stupid as the rest of the world's goyim, then... who is minding the store?

So, the world is waiting for the other shoe to drop.

They hope it wont come too soon, but they have to be prepared for when it does otherwise they too will be pulled down to ruin. DS

Saturday, October 03, 2009

Globalization and some home truths for Bernard Avishai

Globalization: Chinese underwear on sale in Madrid, Spain

David Seaton's News Links
A couple of days ago  Canadian-American-Israeli, professor, author and businessman, Bernard Avishai, blogged an article, "Unemployment Or Unemployability? A Story", which he posted to his blog and cross posted to Talking Points Memo Café. This snippet will give you an idea of the content and the tone of his piece
But here is the sad reality impinging on unemployment. For there was greater social risk to the compact, too, and it was not hard to imagine what became of car mechanics who, unlike Dave, were not prepared to hold up their end of the deal. You ran into many such people in rural New Hampshire: not-quite-enough schooling, too much beer, too much TV.It was precisely because direct labor used to be so simple, mechanical and yet critical to value creation that labor unions made sense. The logic behind unions may still apply to some kinds of work—fast-food servers, apparel assemblers, hospital orderlies. But any job that is simple and repetitive, that requires so little individual creativity that an employee would rather join a union than negotiate an individual career path, has become a prime target for the computer-integrative technologies. All of this has meant that tens of millions of people—people with children, people hobbled by dullness and self-doubt, people who played by rules that simply evaporated from the time they were 15 to the time they were 35—are hard pressed to see a future. Bernard Avishai
Aviashai's is a fairly accurate, if uncritical vision of the new "knowledge economy", but his posting caused a firestorm of comment at Talking Points Memo. It was if he had broken a dam of pent up anger and frustration.

What impressed me most is that the anger wasn't from "people hobbled by dullness and self-doubt" or people with, "not-quite-enough schooling, too much beer, too much TV". No, it came from precisely the people that the system had prepared  --  using Avishai's phrase -- to "negotiate an individual career path", even people with post-graduate degrees.

The system is failing them and believe me these are the dangerous ones for a system to fail.

If you have read a bit about revolutions you'll remember that they are not put into motion by the uneducated, those who consume "too much beer and too much TV" -- no matter how oppressed they are -- but by the dissatisfied intellectuals of the middle class, those who have the necessary skills, knowlege and tools to first understand and then to subvert the system.

From time to time the uneducated, the sans cullote rise up in their blind desperation, but if there is not a group of intellectuals who are prepared to channel that anger it soon blows over and fades. It is the intellectuals that turn rebellions into revolutions. 

I don't remember ever seeing this type of third world intellectual's anger in educated Americans before. During the sixties,  American university students rebeled against the war, the draft, racial segregation and so forth, but the anger I sense in the comments to Avishai's post is traditional class anger. This is the anger of people, who  as Avishai says, "played by rules that simply evaporated from the time they were 15 to the time they were 35", and despite their education, "are hard pressed to see a future".

Here is a small sample of the abuse he received. I recommend reading it all as the quality of some of the comments is superb:
Bernard Avishai, that condescending, anti-union, globalist jerk, has a summer-house near Wilmot, New Hampshire. He thinks anybody who isn't very, very smart should be very, very poor, or, better still, just fucking die.
Tell me about the high level of "risk" in the life or the real owners of our "ownership society," you know, the Goldman Sachs fraternity, the Paris Hiltons, the George Bushs, the Robert Rubins, the Tom Friedmans, the Warren Buffets? How come nobody re-engineers Tom Friedman's job so it can be done more intelligently? What "risk" means for the top dogs at Lehman Brothers or AIG? If owning the "means of production" means so little these days, why can't we have it?
The picture one gets from this anecdote is that the contemporary world is just so inherently fraught with dynamic change and ceaseless creative destruction that no one can survive any more on average, stolid intelligence and workaday responsibility. Everyone in America now has to become a "creative thinker" and an entrepreneur, and spend their brief moment on Earth restlessly "negotiating an individual career path" to keep up with the torrent of change. To me, that sounds like a very annoying, stressful, spiritually lonely and unsettled way to live.(...) I am appalled by the amount of intellectual talent that is drawn to edgy, decadent and expensive outposts of human desire and craving, while the fundamentals of human life are neglected and taken for granted. Our lives seem deeply out of balance.
I am really glad you live in the rarefied world of successful entrepreneurs and innovators. The rest of us have to exist too. We have to buy that stuff. Your disdainful conceit is nauseating. I know a lot of great hardworking smart people and this economy is utterly failing them. My whole life has been watching our middle class struggle to stay in place. (...)  I am relatively young (early 30's), and this is the experience of my generation. I have friends who have already gone through 3 career changes already- mimicking the economy at large (, real estate, service, etc.). I know engineers that have spent their last employed months training overseas replacements. One was just laid off from a good printer company (the one that gave Carly 20mil plus) and now works a late night fish taco stand. He has a masters from UC Berkeley. He has only one other 'good' job prospect- going to Tianjian to train. On contract. MASTERS. Reminds me of when I would travel in third world countries and used to be shocked that a doctor would be a taxi-driver. I get it now. I know so many older smart hard working people who are now permanently underemployed it, or worse. They have been screwed, and they are not the 'too many beer folks'... Fucking Prick.
One thing that is ludicrous is how 1980s this blog is. Security for college grads is, in fact, so very 1980s. These days kids graduate with a ton of debt, to a job market that has six applicants for every opening. That's why we recently witnessed a talented recent grad -- double major -- die from lack of health insurance when she came down with H1N1. People who graduated in the 1980s and 1990s have no security either, since there is an army of ready replacements. But hey if it makes you feel good we'll give you a PhD in asshattery.
Of course in all fairness, some places have got it worse than the USA.

Mr Avishai's other country, Israel, for example.

Noemi Klein in her seminal book, "The Shock Doctrine", devotes an entire chapter to Israel, entitled "Israel a Warning", where she describes how Israel has been transformed from a labor intensive agricultural exporter to a high tech super power, selling security and weapons technology for the "war on terrorism". This transformation combined simultaneously with a Friedmanesque  (Milton) reduction of the previously generous welfare state has been disastrous for a great many Israelis. Few countries have ever changed as drastically as Israel has in such a short time.

These first quotes are from the Israeli mass circulation Yediot Aharonot and the Jewish Journal:
Once idealized as a socialist paradise, the Jewish state is increasingly becoming a country of two classes -- those who have soared in the increasingly capitalist economy and those who have stumbled in its wake.
Despite its much-mythologized egalitarian image, Israel has always experienced economic gaps. But now the divide between haves and have-nots has grown to alarming proportions. If economic policies and other factors have spawned a privileged class, they also have produced a deeply entrenched underclass populated by the elderly, Holocaust survivors, Arabs, immigrants, ultra-Orthodox Jews, single parents -- even two-income families.
Israel has bypassed the United States and now leads Western countries when it comes to child poverty figures, according to a grim National Insurance Institute report released Monday.
According to the report, child poverty grew by about 50 percent since 1988, with about a third of all children living below the poverty line. Meanwhile, 28,000 additional families dropped below the poverty line in 2004, comprising 107,000 Israelis, 61,000 of them children. YNet
And this next is from the Bnai Brith; founded in 1843, it is the oldest continually-operating Jewish service organization in the world. (It should be noted that this article was published before the "great recession". Things are obviously worse now).
The reality of poverty in Israel is relatively new to the Israeli consciousness. Hundreds of thousands of Israelis face serious financial hardship-even as Israel has developed into a fledgling economic power, posting impressive gains in gross domestic product (GDP) and achieving dizzying growth on the Tel Aviv stock exchange.
Throughout the 1990s, the poverty rate in Israel climbed steadily. The number of poor Israeli families grew by 4.4 percent of the total population-the sharpest rise in the developed world. Public assistance increased to meet the need; from 1990 to 2001, welfare payments in Israel more than doubled, from about $5 billion annually to more than $10 billion. Nevertheless, the ranks of those living in poverty continued to swell and the socioeconomic gap in Israel between rich and poor rose sharply.
Between 1998 and 2005, child poverty rose 50 percent, to 35 percent of the child population, according to the National Insurance Institute (NII) and Israel's Central Bureau of Statistics. There was a sharp spike in poverty overall between 2002 and 2004, when Israel's then-finance minister, Benjamin Netanyahu, instituted drastic cuts in welfare services. This coincided with the peak years of the Intifada, when the economy flagged as Israel coped with that ongoing crisis.
Although poverty rates in the Jewish state leveled off in 2005, they still remain higher than in any other industrialized country except the United States. "We have had stabilization, but it's not good enough, because we have stabilized at a very high level of poverty," says Miri Endeweld, head of the economic research department at the NII, which manages Israel's welfare system. "When you get to a high level, of course you're going to stabilize. How high can you go?"
And it is not just that poverty has risen. In 2004, Israel also had the second-largest gap between rich and poor among industrialized countries; only Taiwan's was larger. Israel's income gap was twice as large as that of the United States. To wit: While luxury homes with two-car garages are built in the beach town of Caesarea, residents in the next town on the other side of Israel's coastal highway use food stamps at local supermarkets in Or Akiva. Bnai Brith

And in Israel, "the light unto the Nations" nearly 30 percent of the population goes hungry: this from the Israel News Agency:
Over 400,000 families in Israel suffer from "nutritional insecurity," a euphemistic term for "hunger." 28% of Israeli citizens, or 1,600,000 people are living in poverty. Among them are more than 600,000 hungry children. Those experiencing "nutritional insecurity" eat smaller portions, skip meals and, in extreme cases, don't eat for a whole day. Diets may be high in carbohydrates and lacking or almost devoid of meat, dairy products, vegetables and fruit. In Israel, 22% of families are deemed moderately insecure and 8% suffer from severe insecurity. A family's situation is considered moderately insecure when the parents deprive themselves of food to ensure their children get what they need. In families whose situation is severe, the children are deprived as well. 60% of nutritionally insecure are Jewish, 20% are Arab, and 20% new immigrants. 80% of nutritionally insecure people reported a deterioration in their situation in the last 22 years, as Israel economic conditions have deteriorated. About 24% of Israelis are forced to make choices between food and other expenses such as mortgage, rent, medicine, heating and electricity. About half choose to get along with less food. The 'poverty line' in Israel in 2002 was NIS 4,500 a month ($937.50) for the average Israeli family of four - mother, father and two children. Signs of how severe the problem is are all too apparent on the streets of Israel. In Jerusalem, for example, nearly 1,000 people a day come to four soup kitchens at which hot meals are served. It is also commonplace to see older men and women picking through the garbage at outdoor markets in Israel's cities. The collapse of the economy has taken a great toll on the lives of Israel's poorest families, and many children from middle-class families are now joining their ranks. Unemployment in Israel is around 20%, and the difficult economic situation has taken its toll on huge numbers of Israelis. Israel News Agency
And to finally drive home the point further, this piece from America's foremost Jewish newspaper, The Forward:
Economists are bracing for an early warning about what toll the world economic crisis may be taking on Israel’s population. Popular wisdom is that Israel is weathering the current world financial storm, with the economy faring well given the circumstances. Last August, the Bank of Israel revised its forecasts of growth in 2009 to one of stability from a reduction of 1.5% in GDP. But this offers little comfort for many ordinary Israeli householders. Figures set for release later in October by the government’s Central Bureau of Statistics show that even when the economy was at its very strongest, in 2007, more and more Israelis had difficulties putting food on the table. That year, the country’s economy grew by 5.4% — faster than the United States, Europe, the United Kingdom and Japan. But the percentage of Israelis who went without food for economic reasons at some point during 2007 stood at 21%, up significantly from 14% in 2003. “I am afraid that the figures for 2009 will not be better, but rather even worse,” said Yosef Katan, an expert on poverty in Israel from Tel Aviv University’s School of Social Work.(...) The universal measurement of inequality in a society is a complex mathematical calculation called the Gini coefficient. The lower the number- — between 0 and 100 — the more equal income distribution is in a society. Israel’s score in the latest UN-published table is 39.2. This is higher than all other western industrialized nations but for the United States at 40.8. Most European countries have scores in the high twenties or low thirties. Back in the 1950s, Israel boasted some of the lowest scores in the world. The Forward
It seems to me that an economic system -- one which supposedly favors intelligence -- where even Jewish people starve, is a simply a fraud.

Israel was a country specifically created to keep the Jewish people safe from harm. An economic system which fails miserably to fulfill the founding "mission statement" of such a state, can certainly not be expected to produce results in any country, especially in one which like the United States has repeatedly shown that it has no such protective view of its citizens.

The anger and frustration of the educated and the skillful will surely find an outlet in action. What form that action will take I do not know.

Certainly I think the progressive community of the United States deserves a better home than the Democratic party. Things have to get done, people have to get organized, strikes and demonstrations have to be called and the Democrats are never going to do any of that... They exist so that those things wont ever happen. DS