Breaking it Down: Industrial Capitalism vs. Financial Capitalism (or, Why We’re F*cked)

Michael Hudson asks: “In light of the enormous productivity gains since the end of World War II – and especially since 1980 – why isn’t everyone rich and enjoying the leisure economy that was promised?”

The answer (per Hudson) is painfully obvious, but bears repeating (ad infinitum):

What was applauded as a post-industrial economy has turned into a financialized economy. The reason you have to work so much harder than before, even when wages rise, is to carry your debt overhead. You’re unable to buy the goods you produce because you need to pay your bankers. And the only way that you can barely maintain your living standards is to borrow even more. This means having to pay back even more in years to come.

That is the Eurozone plan in a nutshell for its economic future. It is a financial plan that is replacing industrial capitalism – with finance capitalism.

Industrial capitalism was based on increasing production and expanding markets. Industrialists were supposed to use their profits to build more factories, buy more machinery and hire more labor. But this is not what happens under finance capitalism. Banks lend out their receipt of interest, fees and penalties (which now yield credit card companies as much as interest) in new loans.

The problem is that income used to pay debts cannot simultaneously be used to buy the goods and services that labor produces. So when wages and living standards do not rise, how are producers to sell – unless they find new markets abroad? The gains have been siphoned off by finance. And the financial dynamic ends up in austerity.

And to make matters worse, it is not the fat that is cut. The fat is the financial sector. What is cut is the bone: the industrial sector. So when writers refer to a post-industrial economy led by the banks, they imply deindustrialization. And for you it means unemployment and lower wages.

As they say, read the whole damn thing.

And weep.

h/t

(Image: jesse.millan, Flickr)

Dueling Ledes (Compare & Contrast)

TorStar, March 20th:

Schools, hospitals and popular burger restaurants such as Hero’s and Lick’s are part of a suddenly massive beef recall over fears of E. coli contamination.

The G&M, today:

Veterinarians and other inspectors responsible for food recalls and ensuring the safety of Canadian meat are among the hundreds of federal public servants who will be told this week their jobs are at risk.

Apparently the Harpercons figure it will be measurably easier to tighten our belts if our bellies have all imploded from E. coli poisoning.

Image: Vanessa Pike-Russell, Flickr. Used under CC license.

Fun With Infographics (STILL Worst Preznit EVA)

by matttbastard

Michael Tomasky:

The Boston Globe ran a chart last Sunday that I’d buy billboard space to reproduce in every decent-size city in America, if I were running the Democratic National Committee. The premise of it was very simple: It showed how many trillions each president since Ronald Reagan has added to the nation’s debt. The debt was about $1 trillion when Reagan took office, and then: Reagan, $1.9 trillion; George H.W. Bush, $1.5 trillion (in just four years); Bill Clinton, $1.4 trillion; Obama, $2.4 trillion.

Oh, wait. I skipped someone. George W. Bush ran up $6.4 trillion. That’s nearly half—44.7 percent—of the $14.3 trillion total. We all know what did it—two massive tax cuts geared toward the rich (along with other similar measures, like slashing the capital gains and inheritance taxes), the off-the-books wars, the unfunded Medicare expansion, and so on. But the number is staggering and worth dwelling on. In a history covering 30 years, nearly half the debt was run up in eight. Even the allegedly socialist Obama at his most allegedly wanton doesn’t compare to Dubya; and Obama’s debt numbers, if he’s reelected, will surely not double or even come close as we gambol down Austerity Lane.

On a related note, if the allegedly socialist Obama is pretty much toast in 2012, as dnA argues, what happens if the GOP decides to double down on the Evangelical Jesus Juice and storm the White House with “George W. Bush on Steroids” at the point?

ON STEROIDS.

PS: WORST PREZNIT EVA.

Sarah Palin, Fauxpulism, and Right-Wing Identity Politics

by matttbastard

(Image: Tacoma Urbanist, Flickr)

Sarah Palin is back — and, seemingly, everywhere, as she launches a book tour (and, perhaps, a run at the White House in 2012).

Max Blumenthal:

In a Republican Party hoping to rebound in 2010 on the strength of a newly energized and ideologically aroused conservative grassroots, Palin’s influence is now unparalleled. Through her Facebook page, she was the one who pushed the rumor of “death panels” into the national healthcare debate, prompting the White House to issue a series of defensive responses. Unfazed by its absurdity, she repeated the charge in her recent speech in Wisconsin. In a special congressional election in New York’s 23rd congressional district, Palin’s endorsement of Doug Hoffman, an unknown far-right third-party candidate, helped force a popular moderate Republican politician, Dede Scozzafava, from the race. In the end, Palin’s ideological purge in upstate New York led to an improbable Democratic victory, the first in that GOP-heavy district in more than 100 years.

Though the ideological purge may have backfired, Palin’s participation in it magnified her influence in the party. In a telling sign of this, Congressman Mark Kirk, a pro-choice Republican from the posh suburban North Shore of Chicago, running for the Senate in Illinois, issued an anxious call for Palin’s support while she campaigned for Hoffman. According to a Kirk campaign memo, the candidate was terrified that Palin would be asked about his candidacy during her scheduled appearance on the Chicago-based Oprah Winfrey Show later this month — the kick-off for her book tour — and would not react enthusiastically. With $2.3 million in campaign cash and no viable primary challengers, Kirk was still desperate to avoid Palin-backed attacks from his right flank, however hypothetical they might be.

“She’s gangbusters!” a leading conservative radio host exclaimed to me. “There is nobody in the Republican Party who can raise money like her or top her name recognition.”

In contemporary politics, money + brand recognition = power –period. For a Republican party scrambling to maintain its ever-shrinking base, that makes Sarah Palin its most influential personality. And with the Democratic Party and the White House being seen, rightly or wrongly, as the party of Goldman Sachs, an avowed fauxpulist like Palin (she’s ‘one of us!’) driving the tone and tenor of conservative politics in an age of economic instability is not something to airily discount.

Tim Egan:

Right now, a time when only 20 percent of Americans call themselves Republicans and Democrats are shrinking as well, the independents are disgusted with both parties. In large part, it’s because neither one seems to be on their side.

The early warning shots came on Nov. 3, against an ineffective former Wall Street executive, ousted New Jersey governor Jon Corzine, and the billionaire mayor who barely bought himself a third term, Michael Bloomberg of New York. Both felt the back hand of an electorate that feels as if the system is rigged against them.

A year ago, most people were open-minded about the ground-shaking changes that came with the economic collapse. Polls found a slim majority in favor of Wall street bailouts to save the economy. They would listen, watch, wait.

By this fall, the majority were not only against the bailouts, but in favor of curbing pay on Wall Street, and tightening government regulation of same.

The continuous drip of perceived unfairness continues. One day it’s news that Goldman Sachs seems to have stepped ahead of the line of those waiting to receive H1N1 vaccines, prompting questions about why investment bankers were getting doses rather than children or pregnant women. This week, Gallup found one in five parents saying they were unable to get swine flu vaccine for their children.

Another day brings a report that the top banks are raising credit card interest rates – some as high as 29 percent, which would shame a Mob extortionist — even against people who have always paid on time. This is the thanks we get?

If Congress steers through the Great Recession without responding to the thousand points of pain among average Americans, people will see them for what they are in bottom-line terms: an insulated club. Proof, just recently, came from a Center for Responsive Politics report that 237 members of Congress — 44 percent — are millionaires, compared to just 1 percent for the country as whole.

It’s difficult to take the clumsy rhetorical and symbolic excesses of the so-called Tea Party protest movement seriously. The ham-fisted polyester populism employed by some of the more exuberant adherants seems designed to drive a stake through the barely-beating heart of parody. But the (partly manufactured) rage that is driving teabaggers to target moderate Republicans like Dede Scozzafava or burn Speaker Pelosi in effigy isn’t simply fodder for mockery by progressive bloggers and #p2 snarkmeisters; it’s a bellwhether for a burgeoning class divide that threatens to leave the Congressional millionaire elite behind — and give a boost to any political movement that figures out how to tap that rage, regardless of where that movement lies on the ideological spectrum.

The fall of social democracy in Europe may provide clues as to how this could play out if progressives fail to heed the mood of the electorate. In a piece for Red Pepper published in June of 2008, Magnus Marsdal tried to explain how and why the populist right has been ascendant in Europe over the past decade, using the Norwegian Freedom Party (FrP) as an example:

Talking to people who voted for the Norwegian populist right offers useful insights for anyone trying to fight radical right-wing populism elsewhere in Europe, particularly when it comes to what I call ‘identity politics’.

How does the FrP make the worker-voter identify with a party that is positioned so far to the right? Hostility towards foreigners and mobilisation of ‘white’ or ‘Norwegian’ identity plays a big part. So does the male- orientated FrP’s anti- feminism, which mobilises identity among male voters.

The right-wing populists also play with a particular type of consumer identity that sets the population as consumer individuals against the state, the tax system and the elite. These are the obvious side of the FrP’s identity politics.

There are two other elements that are less apparent but even more important to consider, both in Norway and in other countries where right-wing populism is on the rise.

Worker identity
First, the FrP’s rhetoric offers its own worker-identity. This is not the worker as opposed to bosses and owners. It is the worker contrasted to the lazy and dole abusers ‘below’ and ‘posh’, cultured people ‘above’.

It is quite normal for people to imagine society as if it were split into three different sections, with themselves in the middle. Moral values determine who is worthy, and who is unworthy, both ‘up there’, ‘down below’ and among ‘proper working people’. The unworthy ‘up there’ include all those who represent the state, the Labour Party, the government and everybody else who ‘lies and steals money from common workers’, as Hans Erling Willersrud, the car worker who is the main character in The FrP Code, puts it.

Among people ‘down there’, the worthy are those who, through no fault of their own, have become ill, disabled or been made redundant. Everyone else is unworthy, including those who don’t do their jobs properly. For many workers worthiness equals skills – you are worth something because you have skills and you do something. This way of measuring worth and dignity is an alternative to measuring by income or education. On this essentially moral scale, the ‘honest worker’ comes out on the same level as, or above, the rich person or the leading politician.

The unworthy also include the dishonest: those who turn with the wind, pay lip service to all, who are not ‘solid wood’, as Norwegians say. The worst are probably those who suck up to ‘posh’ people and intellectuals one moment, only to denounce them among workers the next. Not being perceived as ‘solid wood’ has created quite a few problems for politicians, especially for the Labour Party, which needs to present itself favourably to different groups at the same time.

From my interviews with working-class FrP voters, I made a simple model to show how those ‘up there’ and ‘down there’ stand in relation to the ‘proper working people’. The elite ‘up there’ are divided into three different types:

  • the ‘know-it-alls’ linked to the education system and the state;
  • the greedy, found at the top of the economy; and
  • the politically powerful (often connected to the ‘know-it- alls’ and the greedy).

[...]

A second element to the FrP’s identity politics is that of aggrieved identity. ‘I’m just an ordinary worker, I have no fucking say,’ says Hans Erling Willersrud. He knows what it means to be at the boss’s beck and call and he’s had enough of the condescending attitude of Labour politicians who ‘can’t be bothered to listen to what [he’s] got to say’.He had some contact with the social security office when he was sick, and ‘has had it up to here with the system’. ‘They wouldn’t even believe he was in pain,’ says his mother Eli.

Hans Erling thinks politicians and bureaucrats are driving his country into the ground. He believes the social democratic elite has arranged things so the rich, the shrewd and the sleazy can take advantage of the system at the expense of the common man. He’s at the bottom of the pile at work. He’s at the bottom of the pile at the dole office. He’s at the bottom of the pile in the trade union (as an FrP voter) and in politics in general. He sees himself as a ‘political underdog’.

This doesn’t mean he is weak. On the contrary: being an underdog is not about lacking personal strengths, but finding that they don’t count for anything. More powerful people, regardless of their competence, are lording it over theunderdog, without recognising his skills or paying attention to what he actually knows, thinks or wants. It’s humiliating. He feels aggrieved.

And how does a political party like the FrP exploit the popular mood? It uses political language and images to touch a nerve with people who feel ignored, trampled on and overruled.

Carl Hagen’s most important ploy is to place himself in the role of the underdog. When he rages against the other parties wanting to keep a strong FrP out of government, he says, ‘Our voters will not be treated as second-rate.’ This simple sentence is perfect for connecting with people who on a daily basis, whether at work, at school or in the media, feel that they are treated like second-class citizens. Widening the focus, Hagen implies that what ordinary workers are in the workplace, the FrP is in the party political system. The voters can identify only too readily with what he is saying.

At the same time, Hagen – in the role of the affronted man who refuses to back down – offers the promise of vindication. For more than 30 years he has paid for the conceited sins of others, he tells them. But he turns the other cheek. Unlike the powerful and the arrogant, he is not driven by haughtiness or personal ambition. He is only fighting for what’s fair.

This underdog pose is brilliant because it can be applied to so many different voter groups. Above/below is a relationship that most people can recognise. Because he understands the underdog mentality, Hagen can connect with social-democratic workers as readily as with Christian fundamentalists who feel that their Christian cultural heritage is under threat.

Other subjects that mobilise the affronted population’s sense of themselves as the underdog include the FrP’s attacks on ‘politicians and bureaucrats’, its protest against schemes such as ‘the new opera being paid for by taxpayers’ and accusations that overpaid journalists are ‘persecuting the FrP’.

So where does Sarah Palin and her overwhelming ubiquity fit in all this? Like Barack Obama in 2008, Palin could prove to be a blank canvas on which citizens could project their desires en masse. Only instead of hope and change driving a national popular movement, hate and fear would be the engine of political change in 2012.

Of course, recent polls make the likelihood of a Palin run for the Presidency seem dim for the moment, as Joan Walsh notes.

But that doesn’t mean progressives should exhale:

The main reason not to fear a President Palin can be seen in recent polling among independents and moderates. In a the most current ABC News/Washington Post poll, Greg Sargent drilled down to find that: only 37 percent of independents and 30 percent of self-described moderates think she’s qualified for the presidency, and 58 percent of moderates view her unfavorably. Even more intriguing (but not surprising): Palin’s approval rating with men is higher than with women, 48 percent to 39 percent, and just a third of women believe she’d be qualified to be our first female president. (So much for Palin’s appeal to Hillary Clinton fans!)

So I think the Sarah Palin rehab tour is more about Sarah Palin Inc. than Sarah Palin 2012. She’ll rack up the speaking fees, raise some money for red-state, red-meat Republicans, further polarize the party and live the high life she thinks she deserves. Still, even as I dismiss Palin as a serious GOP threat, increasingly I believe that the faux-populism of the right is something to worry about. It may be fun to mock Sarah Palin, but Democrats shouldn’t laugh at many of the people who admire her – who see a folksy, new kind of self-made mom trying to fight the bad old Eastern elites.

Digby nails it:

I’m not saying that we should panic. These people are politically weak in their own right. But when I see the liberal gasbags on TV blithely dismissing this as if it”s impossible that Americans could ever fall for such lunacy, I feel a little frisson of alarm. I’ve read too many accounts of people who, 80 or so years ago, complacently made the same assumption. And the whole world found out that under the right circumstances even the most civilized nations can throw in with the crazies.

Bottom line: If the ugly momentum of right-wing identity politics carries into 2012, we could see the nastiest, most polarizing Presidential campaign since 1972, regardless of who gets the GOP nomination.

Recommend this post at Progressive Bloggers

Bachmann: Obama’s policies ‘fitting’ future generations with ‘shackles and chains.’

by matttbastard

Get it? Nudge nudge, wink wink?

Oh teh irony, indeed, Michele (also, FAIL.)

Recommend this post at Progressive Bloggers

NY Times: 300 Afghan Women Protest ‘Rape Law’

by mattbastard

This is probably the most inspiring and heroic thing I’ve read about in ages:

The young women stepped off the bus and moved toward the protest march just beginning on the other side of the street when they were spotted by a mob of men.

“Get out of here, you whores!” the men shouted. “Get out!”

The women scattered as the men moved in.

“We want our rights!” one of the women shouted, turning to face them. “We want equality!”

The women ran to the bus and dove inside as it rumbled away, with the men smashing the taillights and banging on the sides.

“Whores!”

But the march continued anyway. About 300 Afghan women, facing an angry throng three times larger than their own, walked the streets of the capital on Wednesday to demand that Parliament repeal a new law that introduces a range of Taliban-like restrictions on women, and permits, among other things, marital rape.

It was an extraordinary scene. Women are mostly illiterate in this impoverished country, and they do not, generally speaking, enjoy anything near the freedom accorded to men. But there they were, most of them young, many in jeans, defying a threatening crowd and calling out slogans heavy with meaning.

[...]

The women who protested Wednesday began their demonstration with what appeared to be a deliberately provocative act. They gathered in front of the School of the Last Prophet, a madrasa run by Ayatollah Asif Mohsini, the country’s most powerful Shiite cleric. He and the scholars around him played an important role in the drafting of the new law.

“We are here to campaign for our rights,” one woman said into a loudspeaker. Then the women held their banners aloft and began to chant.

The reaction was immediate. Hundreds of students from the madrasa, most but not all of them men, poured into the streets to confront the demonstrators.

“Death to the enemies of Islam!” the counterdemonstrators cried, encircling the women. “We want Islamic law!”

The women stared ahead and kept walking.

A phalanx of police officers, some of them women, held the crowds apart.

As Spackerman (h/t) rhetorically asks, “What have you done recently that’s half as brave?”

Related: In an interview with Afghan women’s rights activist Soraya Pakzad, Jean MacKenzie puts the  controversy surrounding the Afghan ‘rape law’ in context:

The reality is that no Afghan woman, Shi’ia or Sunni, has the right to object to her husband’s advances. The international outcry, while well meaning, misses the point: It is not a single law that is the problem, it is the overall status of women.

As they say, read the whole damn thing.

Recommend this post at Progressive Bloggers

61K Canadian Jobs Shed In March

by matttbastard

wheeeeeeeeeeeeeee

Another month, another round of massive job losses in Canada:

Canada is shedding jobs at a rate not seen since the deep recession of the early 1980s, as March saw another 61,300 workers join the ballooning ranks of the unemployed.

The loss brought Canada’s official unemployment rate to eight per cent, the worst in seven years.

Statistics Canada noted that since the peak in October, employment has fallen each month for a total of 357,000, representing 2.1 per cent of the work force. That is the most since 1982.

[...]

Economists had been expecting another poor jobs report with about 55,000 jobs lost.

But the reality was slightly worse, and much worse if the 18,200 jobs increase in part-time work were taken out.

Rising part-time work at a time of falling employment is usually an indicator that Canadians are settling for whatever jobs they can find. Among full-time workers, the contraction in employment was another outsized 79,500 in March.

So.  As Uncle Steve and the Harpercons sadly continue to lose their shit, the Canadian job market keeps hemorrhaging. And, waiting in the wings, we have Iggy and the Torie-lites, ready to save us all by doing, er, pretty much the same bullshit Harper and Co. have been doing, only with less asshattery, sweatervests and painfully-forced smiles.

We are so fucked.

Recommend this post at Progressive Bloggers

The Shock Doctrine 7: Sheep Farming in the Falklands (Or, The Revolution Will Not Be Monetized)

by matttbastard

Chapter 6: Saved by a War Thatcherism and its Useful Enemies

(Previous posts here, Sarah’s posts here.)

“Creating a useful crisis is part of what this will be about….[s]o the first bunch of communications that the public might hear might be more negative than I would be inclined to talk about (otherwise). Yeah, we need to invent a crisis and that’s not just an act of courage, there’s some skill involved”

- Former Ontario Education Minister John Snobelen

Margaret Thatcher, the Iron Lady.

She’s presented by many as one of conservatism’s patron saints, a great leader who, through sheer force of will, pushed back against the excesses of the post-WWII British welfare state. Yet her sweeping program of Friedmanite deregulation and rollback of worker’s rights has also been dubbed by many commentators a ‘revolution’.  Though seemingly incongruous, the term is fitting; as the National Review famously declared in 1987, Thatcher’s ultimate goal was “nothing less than the reshaping of British political and economic life as that has been understood since 1945, by Labour and Tory alike. [emph. mine]“

Klein outlines in Chapter 6 how Thatcher used the political capital raised via the war in the Falklands to not only unite the nation, but to finance her radical neoliberal economic reform agenda, despite a previously skeptical public. Klein also notes that the controversial yet popular military endeavour coincided with the penning by Friedman of a passage that she says “best summarizes the Shock Doctrine: “Only a crisis–actual or perceived–produces real change.  When that crisis occurs, the actions that are taken depend on the ideas that are lying around.  That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.””

The so-called ‘crisis hypothesis’ was utilized to great effect, at least in a political context, by Thatcher, according to Klein:

“Between 1084 and 1988, the [British] government privatized, among others, British Telecom, British Gas, British Airways, British Airport Authority and British Steel, while it sold its shares in British Petroleum.

“Much as the terrorist attacks of September 11, 2001, would take an unpopular president and hand him an opportunity to launch a massive privatization initiative (in Bush’s case, the privatization of security, warfare and reconstruction), Thatcher used her war to launch the first mass privatization auction in a Western democracy.”

As Sarah notes, despite their widely-accepted status as heroic conservative icons, pro-market radicals like Thatcher and US president Ronald Reagan enacted their policies in direct opposition to conservatism.  A so-called ‘conservative’ brazenly utilized a crisis to enact revolutionary change–coopting political theory traditionally the domain of the far left.   In a post highlighting the days events at the ongoing G20 summit, Sarah points out that it was conservative leaders Angela Merkel and Nicolas Sarkozy who were pushing for stricter regulations of global financial markets, rather than left-of-centre leaders like Barack Obama or Gordon Brown:

For Sarkozy to call for giving capitalism a conscience–well, it underlines the difference between French conservatism and American, but it also points out that state regulation and control over capital markets is not actually a shocking, strange idea, and that the rapid deregulation was actually the revolutionary idea.

Rather than promoting pragmatic, prudent conservative economic platforms, Thatcher (and Reagan) instead grabbed hold of the most extreme of Milton Friedman’s theories and ran with them Jamaican sprinter style.  The fact that ‘socialists’ like Tony Blair eagerly took  the baton passed to them by purported ideological opponents and carried it over the finish line only serves to further illustrate the fact that adherence to radical free market economic theory transcends the traditional left-right political axis–and, ultimately, that Thatcher’s revolution was indeed sucessful beyond her wildest expectations.

Next–Chapter 7: The New Doctor Shock Economic Warfare Replaces Dictatorship

Recommend this post at Progressive Bloggers

Newsflash: Public Anger Gets Results.

by matttbastard

Earlier this week, Der Spiegel published a sobering article about how the global economic crisis is battering the Friedmanite petri dish that is post-Soviet Eastern Europe:

After joining the EU, the Baltic countries in particular made enormous progress in catching up with their Western neighbors, sometimes growing at double-digit rates. Romania, a latecomer to the EU, recorded the largest number of new registrations of Porsche Cayennes worldwide in 2008. In downtown Warsaw, the Stalin-era Palace of Culture and Science, once the city’s only skyscraper, disappeared behind new steel-and-glass office towers within the space of a few years. The Czech Republic still enjoyed almost full employment in 2008.

Now the once-booming Eastern European economy has ground to an abrupt halt. The worldwide economic crisis, which began with the bursting of the real estate bubble in the United States, is now making itself felt in the former communist countries. And it is hitting them with more force and more quickly than the newcomers to capitalism, spoiled by success, had expected.

The Estonians, Latvians and Lithuanians, who for years could enjoy growth rates of between 7 and 10 percent, must resign themselves to the fact that their economies are shrinking. Hungary has already tapped the International Monetary Fund, the World Bank and the EU for €20 billion ($27 billion), and Romania will need just as much. In the fourth quarter of last year alone, the Poles produced 5 percent less than in the same period in 2007. In the Czech Republic, unemployment has risen to 12 percent.

[...]

The fact that the crisis in the West is now pulling down the East is largely attributable to a single mistake. For years, Eastern Europeans took out loans denominated in euros, Swiss francs and Scandinavian kroner. The loans stimulated domestic consumption and allowed the economies to grow. Many new member states imported more goods than they exported. Now the mountains of debt are high, and the current account deficits of countries like Lithuania and Bulgaria are a massive 15 percent of GDP.

Capital flight and declining demand from the West have pushed down exchange rates. The currencies that are not pegged to the euro have experienced particularly drastic slumps in value. In the last six months, the Romanian leu lost more than 16 percent of its value and the Hungarian forint close to 20 percent. Private citizens and even governments can no longer service their foreign-currency loans.

Massive bankruptcies in the East are now affecting the reckless lenders in the West, which also happen to control about 70 percent of all banks in Eastern Europe. Austrian banks alone have outstanding loans in Eastern Europe worth €293 billion ($396 billion). Thomas Mirow, the president of the European Bank for Reconstruction and Development in London, expects that up to €76 billion ($103 billion) in Western loans will come due this year in EU members in Eastern Europe and Ukraine. Concerns about the creditworthiness of Eastern businesses could deter cash-strapped Western banks from issuing loans for investments. According to Mirow, a vicious circle is developing as Eastern European economies run out of steam and the crisis gains momentum.

At any rate, it will not be possible to fulfill the promise of the revolution of 1989 — freedom and prosperity for all Europeans — as quickly as promised. Instead, citizens in the new EU member states can expect to see their wages stagnate at lower levels compared with those in the West, assuming they have not already been cut drastically. In addition to mass layoffs, ailing Eastern European business owners have resorted to wage cuts of up to 30 percent in recent months. And someone who is out of work in the east quickly finds him- or herself in a very tight spot. Governments are out of money, and social services were cut back in many places during the boom years.

Scary shit.  But the following passage, buried in the middle of the doom and gloom, caught my attention:

Now trouble is beginning to brew in these young democracies. In Bulgaria, Latvia and Lithuania, angry citizens have taken to pelting government buildings with eggs, rocks and — weather permitting — snowballs. In the Latvian capital, the government of Prime Minister Ivars Godmanis was even forced to step down. Meanwhile in Hungary, Prime Minister Ferenc Gyurcsany announced Saturday he was resigning, saying he was an “obstacle” to the reforms needed to help his country overcome the financial crisis.

Chris Bowers at OpenLeft points out something that should be common fucking sense–“When people aren’t angry, politicians aren’t responsive”:

To me, as a political activist, the lesson is that we should be generating as much anger as possible, all the time, because it is about the only thing that appears to make politicians in D.C. responsible to our concerns.

Democracy doesn’t begin and end at the ballot box. Sometimes we have to remind our leaders of this–make the powerful FEAR the people. Because, quite frankly, there are more of us than them. Strength in numbers. Is why divide and conquer is a key part of their strategy. We see that in the anti-EFCA effort, with the business lobby trying to stir up the resentment of non-unionized workers towards those who are organized.

Reading about how the global economic crisis is hitting Europe is both depressing and, perversely, inspiring. Their anger isn’t impotent, expressed not in water-cooler griping, but rather abductions, rock-throwing, mass labour mobilization. Public outrage–visceral, undiluted rage–gets shit done.  Governments have stepped down after being held accountable by the will of the people; corporations have been forced to renegotiate severance packages for laid-off workers.

Anger. Gets. A. Response.

Somewhere, Emma Goldman is smiling.

Recommend this post at Progressive Bloggers

The Shock Doctrine 6: Crimes and Misdemeanors

by matttbastard

Chapter 5: “Entirely Unrelated” How an Ideology was Cleansed of its Crimes

(Previous posts here, Sarah’s posts here.)

Why is it that capitalism’s crimes are divorced from the ideology itself, while Marxism is joined at the hip to the atrocities of the USSR and Revolutionary China?

In Chapter 5, Klein examines how neoliberalism managed to wash itself of the many, many atrocities committed by its acolytes in the Southern Cone, ironically in the name of ‘cleansing’ polluted economic systems.  She contends that, by focusing on generalized ‘human rights violations’ rather than exploring the systemic and ideological foundations underneath, well-meaning organizations such as Amnesty International essentially played the role of useful idiots.  It wasn’t Friedman’s fault (much less neoliberalism’s)  that a few ‘bad apples’ went a bit too far with their security policies while trying to ‘reform’ their ‘impure’ economies.

So, the horrific human rights abuses perpetuated by the likes of Stalin and Mao are used to define and smear an entire political and economic school, while Pinochet or the Junta in Argentina are written off as isolated incidents, nothing to do with the drive to liberalize markets by any means necessary.

As the global economic crisis continues unabated, we find ourselves at a crossroads. Do we write off the current situation as the result of bad luck, incompetence, a few bad apples at AIG getting unearned taxpayer-funded bonuses, Bernie Madoff’s now-infamous Ponzi scheme? Or do we take the opportunity to honestly look at what REALLY brought us to this point?

Matt Taibbi believes we need to examine and come to terms with the deliberate, malicious systemic abuses and deficiencies that, for too many years, have allowed shady speculators to essentially roll the public, repeatedly:

So it’s time to admit it: We’re fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we’re still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. [...]

People are pissed off about this financial crisis, and about this bailout, but they’re not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d’état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — “our partners in the government,” as [AIG CEO Edward] Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

In other words, what got us here is a feature, not a bug.  The rot won’t be quelled by purging the barrel of rotten fruit; the barrel itself is befouled and corrupted. We can’t afford to allow the same greedy, sociopathic assholes who helped erect the current neoliberal economic structure to build a new framework that will inevitably lead to another future collapse.

After too many years of evading responsibility, unregulated capitalism must be held accountable, once and for all.

Next–Chapter 6: Saved by a War Thatcherism and its Useful Enemies

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