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.

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Quote of the Day: Imperial Nostalgia

by matttbastard

…Even after the fiasco in Iraq, the bloody failure in Lebanon, the downward spiral in Afghanistan and, now, the futile posturing in Georgia, there’s absolutely no evidence the US foreign policy elite is inclined to moderate its ambition to re-organize the world along American lines. Nor is there any sign the political class (including, unfortunately, Barack Obama) is rethinking its lockstep support for that agenda. The voters, meanwhile, don’t seem to care much one way or another – as long as gas doesn’t get too expensive and the military casualties aren’t too high (or can be kept off the TV). If anything, it looks like bashing the Russians is still good politics, if only for the nostalgia value.If you caught Andrew Bacevich on Bill Moyer’s show the other night, you may have noticed that his biggest complaint was not that US foreign policy is misguided and destructive (although he clearly thinks it’s both) but that it is being conducted in a democratic vacuum — despite all the florid rhetoric about promoting democracy. We may still go through the motions of a republican form of government, Bacevich says, but the fabric has gotten pretty thin: or, in the case of our national revival of the Great Game in the Caucasus, damned near invisible.

How long before it tears completely?

– Billmon, Anatomy of A(nother) Fiasco

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Conflict in the Caucasus: Four Perspectives

by matttbastard

Greg Djerejian:

What’s needed now, rather critically, is rather a large dose of humble pie by Mr. Saakashvili (let Solana visit him to hand-hold some, and perhaps then send our own Condi-the-Great too, as face-saver, if she’s not too busy showcasing our incompetence elsewhere), with an understanding that the main objective is an immediate cease-fire with the goal of returning to the status quo ante, which is to say, de facto Russian control of the provinces in question. We could do far worse (indeed Putin may be minded to just have them go ahead and declare their independence under Russian control, or simply annex them), and bloviating about the death of the Rose Revolution in far-flung Abkhazia and Ossetia, while doubtless fun cocktail chit-chat among the grandees of our favorite editorial pages, well, Putin might have an idea or two where to put such talk, and it won’t save any lives at this urgent juncture either. Put differently, let’s stop our fanciful reverie from points removed (and where the ramifications don’t include rampant lost of life, say) in favor of trying to dampen back a bloodbath that is looming today in the Caucasus, especially should Saakashvili delude himself some quasi-cavalry might be in the offing, and push back on the Russians even harder. For there is no cavalry coming, save if cavalry can be construed as ‘we must respect Georgian sovereignty’ soundbites that will blanket around clueless anchors striving mightily to pose intelligible questions on the cable news circuit that might be overheard at the Tbilisi Marriott.

Yulia Latynina (h/t Joshua Rouse Foust):

{A}ll the recent actions of Eduard Kokoity, the leader of the breakaway South Ossetian government, have run counter to the interests of Russia in the Caucasus — beginning with his embarrassing Russia in the eyes of the international community and ending with his ratcheting up the tensions in the very region where Russia might begin to come undone. South Ossetia is not a territory, not a country, not a regime. It is a joint venture of siloviki generals and Ossetian bandits for making money in a conflict with Georgia. For me, the most surprising thing in this entire story is the complete lack of any strategic goals on the part of the South Ossetians.

As soon as Russia tamped down the war in Abkhazia, tensions in South Ossetia started rising. South Ossetian forces start shelling Georgian villages, and as soon as Georgia returns fire, the airwaves are filled with accusations of “Georgian aggression.” No one pays attention to the fact that when this happens, Kokoity is not on the front lines or visiting the injured in a hospital — he’s 1,000 kilometers away in Abkhazia, apparently offering the Russian siloviki his people as hostages, as another card to be played to inflame the situation and make a few more dollars.

Again — nothing that is going on in South Ossetia makes any sense from the point of view of strategy. It only makes sense as a means of making money. And we aren’t talking about small sums. Running a gas pipeline through the mountains from Russia — a precaution in case Georgia decides to cut off the 70,000 residents — cost $570 million. And then there is the secret budget Russia has allotted for the struggle — estimated at somewhere around $800 million. And don’t forget the pensions and wages for state-sector workers, who officially number some 80,000 but whose actual numbers are not more than 30,000.

James Sherr (h/t The Parasite):

Unlike Georgia, Ukraine has no territorial conflicts, but it has a potential territorial dispute, Crimea. What is more, Russia’s Black Sea Fleet – and along with it, its intelligence services – is authorised to remain there until 2017. In 1997, Ukraine’s sovereignty over Crimea was recognised by a treaty signed by Presidents Yeltsin and Kuchma. Yet after Nato’s summit in Bucharest last April, President Putin let it be known that Crimea and other questions long regarded as settled could be reopened if Ukraine ceased to be a “friendly” (ie, non-Nato) state. After the events of last week, Ukraine is even more concerned about Russia’s wish to destabilise it.

Russia’s regional objectives are therefore straightforward. It aims to show its neighbours, by means of the Georgian example, that Russia is “glavniy”: that its contentment is the key to “stability and security”, and that if Russia expresses its discontent, Nato will be unwilling and unable to help. It aims to show Nato that its newest aspirant members are divided, divisible and, in the case of Georgia, reckless. It aims to show both sets of actors that Russia has (in Putin’s words) “earned a right to be self-interested” and that in its own “zone”, it will defend these interests irrespective of what others think about them. For Russia, the broader implications are also becoming straightforward. To its political establishment, to the heads of Gazprom and Rosneft, to its armed forces and security services and to their advisors and “ideologists”, the key point is that the era of Western dominance is over.

Far from rejecting “globalisation”, as Westerners might suppose, their view, in Foreign Minister Lavrov’s words, is that the West is “losing its monopoly over the globalisation process”.

Natalia Antonova:

Ultimately, the nations who have encouraged Georgia to join Nato will wash their hands of this conflict. When it comes to what matters more, Tbilisi or Moscow, Moscow will win out. It’s expedient to kick smaller nations to the curb in favour of the big guys, and I say this as someone who has a hell of a lot in common with the Russian Federation and its interests.

Who knows? Perhaps this entire conflict will serve to benefit Russian-American relations. On Air Force One, high above the toils of ordinary life and death, people who will benefit from this disaster can toast each other while the dead are being buried.

It’s not fair. It’s politics. And the only thing left for those not directly involved may be simply to turn away. As one of my Russian friends put it: “I don’t give a s—. It’s summer. Beautiful women in light dresses and sandals are about. I am young enough to pay attention to beautiful women, and old enough to not be interested in f—– up political games.”

More links at my Delicious.

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