Monday, May 3, 2010

The Good, the Bad and the Ugly

Editor's note: While the author's choice of title does paint a spaghetti western showdown portrait, we the editors believe a better choice may have been Kakistocracy or perhaps some variation of Koproscracy. This may have saved much typing and reading time. Please accept our apologies.

The United Kingdom is a paradox and this year's general election campaign is no exception. A 21st century parliamentary democracy where the Queen has to hop a chopper from palace to palace to give her consent to an unelected Prime Minister to dissolve a parliament in which some still wear tights and wigs. The monarchy has seen its royal power eroded over time ever since Charles I was beheaded in 1649, replaced by a parliamentary system which theoretically puts the power of government in the hands of the people. This year's whirlwind month-long campaign got a little bit of American updating, well to 1960 at least, as for the first time a series of live televised debates were held between the party leaders to help the attention-span challenged masses decide whether to take the red or blue pill.

The election call had been long expected. Ever since assuming the prime ministerial office from Tony Blair, analysts had been watching the polls trying to determine when Labour's Gordon Brown would pull the trigger. Unfortunately for him, an election must take place at least every five years, a window that would have closed in June. Therefore, despite still trailing David Cameron's Conservative party, on April 6th Brown revealed "the least well-kept secret of recent years", elections would be held exactly a month later. Up until the first of three debates, the term coalition government didn't even have any meaning in UK politics. Instead, when talk of the possibility of neither the Conservative or Labour party attaining 50% of the seats in the parliamentary elections came up, the term 'hung parliament' was used - and still is as a scare tactic. The last time no majority was held by either party ABBA had just burst onto the music scene, it was 1974 and Ronald Reagan was just some former actor governing California and Margaret Thatcher was the Education Secretary. Fast forward to 2010 and it could be #NickCleggsFault that the world they helped create is facing it's Waterloo.

It's been 30 years since Margaret Thatcher and Ronald Reagan revolutionized politics on both sides of the pond. Their one-two punch of anti-communist rhetoric and pro-market fundamentalism, warped the political spectrum for a generation. The center veered wildly right leaving Democrats in America and the Labour Party in the UK floundering for nearly a decade. Yes, I'm looking at you Michael Dukakis and Neil Kinnock. Margaret Thatcher's landslide reelection in the 1983 general election and Reagan's crushing victory that saw him reelected in 1984 left the Democratic and Labour Parties in shambles. Reagan didn't just beat Walter Mondale, he humiliated the 'left' winning the most electoral votes in history, 525 out of a possible 538, taking 58.8% of the popular vote to Mondale's 40.6%. Meanwhile, Thatcher won the the most decisive victory in a British general election since 1945. Labour lost 3 million votes and had their worst performance since 1918. Suddenly, what was known as the political left was scrambling, looking for a new way to get elected while it's voting base was being destroyed.

Lucky there was an answer. Neoliberalism. There, I said it. Just mentioning the word has probably scared off half of the readers. Part of the ease with which this ideology's proponents are able to deny its very existence stems from the difficulty in defining it. Making it even harder is the American/European split on the definition of its root - in the US a liberal is usually someone with an overriding belief in state intervention as a cure for social problems and market inefficiencies, but in the European tradition a liberal is committed, above all, to personal freedom, including a belief in free competitive markets as a means to this end.

Who would've believed that a meeting in a Swiss spa resort called Mont Pelerin in 1947 would lay the foundations for the most successful propaganda campaign of all time. The society, which took it's name from the spa, was founded by Friedrich von Hayek who knew that the battle for ideas would take at least a generation to win, but he knew that his intellectual army would attract powerful backers. Its philosophy accorded with the interests of the ultra-rich, so the ultra-rich would pay for it. Money poured in from oligarchs and their foundations. Think-tanks such as the Heritage Foundation, the Hoover Institute and the American Enterprise Institute were set up in the US along with the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute in the UK; business schools were founded while university economics departments were transformed into bastions of near-totalitarian neoliberal thinking.

The evidence of the success of this indoctrination program is disheartening scary. Not only have we seen a generation of our brightest minds funneled into MBA programs, producing a legion of quants and analysts whose main economic activity is the destruction of wealth thus leaving other fields barren of talent, we simply don't have an alternative it seems, no other viable system ready to replace the broken one. Other ideas and ways of thinking have been relegated to the fringes, openly mocked and derided. Even the financial meltdown wasn't enough to shake us from our stupor, as instead of questioning the system, we simply propped it up by backing a truck up to the taxpayer to bail out the banks and clear their gambling debts. Sure the US has a few voices of near-sanity, Paul Krugman, Joseph Stiglitz and Elizabeth Warren come to mind, but the intellectual silence of the left is deafening in the UK. Whisper the word socialism and before you know it you'll find yourself branded a fascist. In fact, I consider us lucky that no charismatic political leader from the far-right has emerged, fortunately the sound of Sarah Palin's voice is enough to push many into contemplating suicide while someone like Cameron has about as much personality as unbuttered toast.

As the Golden Age of high economic growth that followed WWII suddenly collapsed in 1973 with the oil shocks, stagflation and the breaking of the gold standard, Keynsian economics with its stress on social democracy and central planning gave way to those concerned with liberating corporate and business power and re-establishing market freedoms. Neoliberalism is most closely related to the adoption of the doctrines of the aforementioned Austrian-born Friedrich Hayek, the 20th-century economist turned political philosopher best embodied in his magnum opus The Constitution of Liberty. This is the book that Margaret Thatcher famously banged down on the table at a meeting with her staff in 1975, saying, “This is what we believe”.

Thatcher and Reagan, well let's be honest, really their advisors such as Keith Joseph in the UK and Donald Regan in the US, carved out their nations' industrial bases and sold them off to Wall Street and the City respectively (oh, and China for cheap stuff). Union busting, privatisation and free trade combined to cripple productive employment creating a new permanently out of work underclass. Instead of admitting flaws, a neoliberal simply changes the definition of employment (32 times by Thatcher and Major in the 80's) to try to soften the picture. Despite this, the official rate of unemployment in the United Kingdom increased to 9.1% in the years 1979-89 after it had been 3.4% between 1973–79 and 1.9% between 1960-73. Another good way to lower the roll call of the eligible workforce is to put them behind bars. Prison populations have exploded due in part to market incentives driving prison providers to influence (read: bribe) judges to incarcerate more and more people. All the while prisons are being built by private contractors and filling them with bodies sent to them by their judges. The US has the largest prison population in the world while the UK has easily the largest in western Europe.

Predictably, this pain was masked by foreign policy adventures, most notably the Falklands War whose victory helped Thatcher expand her majority in the 1983 general election. The Iron Lady cultivated the special relationship with the United States and president Ronald Reagan, backing defense policies championed by Reagan, including the doctrine of nuclear deterrence in the Cold War. Yes, it's their Trident missiles being renewed today under both Labour and Conservative plans, at a cost of more than £80 billion, a decision the Lib Dems want reviewed at the very least. A strong proponent of NATO, Thatcher supported the 1979 decision to base nuclear-armed cruise missiles in the United Kingdom, a controversial move that aroused mass protests in Britain. Yeah, they were also marching on the street against Blair's Iraq big lie. In 1986, Thatcher permitted U.S. military forces to launch bombing raids against Libya from British air bases. In our times, there are more rendition stopovers.

It's no wonder the British media are giving Clegg the Obama treatment. From his Iowa moment a couple a weeks ago to comparisons with JFK in 1960, UK politics and culture is intricately linked with it's "special" partner. It may not be Friends or The West Wing, but maybe hope and change could actually work if the Lib Dems can just gain enough seats in the Parliament. There's the problem though, believe it or not, having to ask the queen's permission to hold an election isn't even the biggest problem with the British electoral system. The UK's first past the post electoral system features 650 ridings. Not only does such a plurality system produce a two party system thanks to Duverger's Law, additionally, the ridings are skewed in favour of the incumbent big two, Tory and Labour, with a concentration of seats in their respective strongholds  which will force the Lib Dems, whose support is more spread out, to get a higher percentage of the total vote to win enough seats to form a government. If you have the time, check out the BBC's election seat calculator. By sliding the percentages around, it's easy to see approximately how many seats each party will win with varying percentages of the total vote.It's possible for Labour to wind up in 3rd in the total vote but winning the most seats! As you can imagine, true electoral reform isn't at the top of the priority list for the big two parties but will likely be a Lib Dem demand in any coalition talks.

The scared animal reaction to the Lib Dem surge by the vested interests is sadly predictable, releasing the dogs of war, the media. Former chancellor Ken Clarke ominously insinuated, no wait, not insinuated, screamed, that the financial markets would collapse, you know as a result of a hung parliament: "Bond markets won't wait," the shadow business secretary said of the likely City reaction to post-election backroom deals at Westminster. "Sterling will wobble". Too bad he sorta has a point there. IMF intervention will be necessary to bring the UK's finances under control, but it's the old tired party duopoly that brought us to this point.

The claim that either Labour or Tory could be the party of change or progress is laughable. Measurements such as teenage pregnancy rates, debt levels, living standards, income mobility, educational achievement and number of wars currently being fought are supposed to move in the opposite direction they currently are. I was a bit surprised to hear Clegg make a reference to the Iraq war in his opening comments in the 2nd debate which was based on international affairs for the first half. By most accounts he fought the debate to a draw with Cameron while Brown at least managed to get one prepared "squabbling at bathtime" line to remind the electorate how much younger his rivals are. Chances are most are most debate TV viewers are Peter Griffined thanks to their TV viewing:



Is it all the media's fault that Clegg needed to remind the voter that, like his party voted 7 years ago, "we shouldn't have invaded Iraq"? Sorry to need to state the obvious, but it's Rupert Murdoch's fault. Does the UK have the equivalent of a Jon Stewart to at least try to keep the likes of "Faux" News in its place?

The TV, in a  weird twist, might break the Murdoch headlock on politics. His cross-Atlantic control came thanks in large part to their Iraq war coverage which somehow legitimized Fox News as a news organization and as always, sold newspapers. Thanks to the concentration of media ownership that comes with the absurd increase in concentration of wealth, it seemed Murdoch's forces would be able to anoint Cameron as the next Prime Minister. Yet the TV debates let people see and hear the difference in an easier to digest format despite, maybe even thanks to, the rules. Up until now, most of the electorate hadn't had a chance to even be exposed to Clegg and the Lib Dems.

Of course the dominant theme of the past decade has been the governing powers along with their media allies continuously playing the fear card to maintain the status quo. David Cameron's "I thought I'd never utter these words, but I agree with Gordon" (25:15) remark in the 2nd debate was a lame attempt at humour to cover up the evil overtones of their two parties' overlapping military vision. It's hard to remember, but Labour dropped their policy of Unilateral Nuclear Disarmament along with other key policy differences with the Conservatives such as their policies of re-nationalisation of public utilities and Trade Union rights. Funny how Democrats and Republicans also agree the best thing to do is keep killing brown people. What will make people safer in the United Kingdom? The "war on terror" has made the UK and the world less safe than we were when it began. How will we fight this open-ended war where the fire is constantly being stoked by stirring the embers and watching as hot spots develop around the world? Well, the second debate also featured Clegg's quip about Brown and Cameron that "The more they attack each other the more they sound the same" so we know spending hundreds of billions renewing the cold war Trident nuclear missile system and Euro fighter Typhoon is their plan.

The real propaganda victory though is the ability to convince people who are victimized by this very system to support the system and see it as a good. Somehow supporting bank profits through worrying about our credit ratings so we can more productively use the equity we've built up through years of hard work became more important than actually producing anything. The trick is to wake people from their stupor in places like Liverpool Riverside where they perennially have the lowest voter turnout in the UK, which results in as few as 34.1% of the voting population bothering to cast votes for Labour time after time despite half their children living in poverty. Don't get me going on income inequality, but thanks to the New Labour/Tory policies of the past, Danny Dorling shows that the UK is the fourth most unequal country in the developed world - only Singapore, the US and Portugal being more unequal. The wealth of the top ten percent is worth on average 13.8 times that of the bottom ten percent across the UK. London is the most unequal city in the Western world with levels of inequality which even put the rest of the UK to shame. The top ten percent living in London have wealth worth on average £933,563, while the poorest ten percent have on average £3,420, you know, some 273 times less. An equitable society is one is which there is an equal opportunity to become unequal. This simply isn't the case anymore as exemplified by the growth of charter schools in the US and the fact that in the UK 25% of education goes to the 7% of students attending private schools, higher than anywhere else in the world except Chile.

Ah, Chile, where it all really got going. Where Pinochet and the Chicago Boys had to use death squads to take away the Chileans' choice, Britain got New Labour while the US got Government Sachs. Bruised and confused by four election defeats, the Labour party of the 1980's needed to respond to the success of Thatcherism and the changing nature of the economy and society.  New Labour emerged and became dominant for many reasons. The supposed left wing alternative was left with a reduced voter base and desperately needed an alternative to Big Labo(u)r union support so they whored themselves to Big Finance. They simply adopted the belief that every social institution should be based on market exchange seeing no reason why services that are very different in nature should be supplied in some other way. The New Labour project was based on the belief and corresponding electoral strategy that Labour must appeal to ‘natural’ Tory voters in middle England or it faced the prospect of permanent opposition.

In order to do this the Labour Party was transformed starting in 1987 through a series of Policy Reviews, each presented to party conferences as a fait accompli with the accompanying free media coverage. Gradually, planned action by government was replaced with market solutions as the idea that the market was a good servant but a bad master was abandoned. In contrast to previous Labour thinking, the market was now both self-regulating and self-correcting. Following Labour's 1997 election victory Blair said "the post-war Keynesian dream is well and truly buried". Never mind that different goods meet different human needs, and the idea that we always need choice or worse, we always behave rationally, is silly. People don't pick and choose their rail service or prisons the way we pick our coffee at the supermarket, so why do we treat them the same? Rail privatisation has delivered a worse and more expensive service at a higher price in subsidy. The notion that public services are there to mimic market choice has lodged itself in the minds of a generation of politicians and voters and they are incapable of thinking in any other way.

Markets sprang up everywhere they hadn't previously existed, from education to health care as the quango was born providing near virgin territory and the perfect breeding ground for the pursuit of greed and profit as exemplified by the growth in the financial industry's share of both the US' and UK's total economy. This has continued despite obvious signs that unfettered markets cause more harm than good as we see what happens when finance corrupts every sector of the economy along with politics. The Savings and Loan scandal and the Keating FiveEnronLong Term Capital Management, and on and on and on in the US along with their share in the UK with the likes of Barings, BCCI and the parliamentary expense scandalBy 2002, the ideological shift was complete, with Labour MP and current First Secretary of State (basically a deputy Prime Minister) Peter Mandelson famously declaring that "we are all Thatcherites now" and that "No serious challenge on the left exists to third way thinking anywhere in the world"! Today the same man is warning if you "flirt with Nick Clegg and you will end up married to David Cameron".

Oh, and don't get me wrong, while the 'Good' is having another option, in the UK election represented by Nick Clegg's Lib Dems, the 'Bad' is same old Brown and New Labour, the 'Ugly' is definitely Cameron and a return to Conservative rule. His botoxed smoothness may cover his forehead wrinkles but you don't have to look too far under the surface to see the same old Tory hate. While Clegg's 'earned route to citizenship' plan doesn't sound like a panacea to the UK's immigration problem and Brown's Bigot-gate has provided cover for Cameron, the Conservatives will surely speed the draconian slide of the country toward Arizona status. When branded anti-European and called out on his party's European Parliament alliances with fascists in Latvia, gay elephant (and non-elephant) bashers in Poland and ex-Czech Prime Ministers who party with Berlusconi... naked...with 17 year olds, David Cameron defended his alliance at the 35:35 mark of the 2nd debate: "One of our main allies is the party of the Polish president who tragically died in that accident who both of the politicians standing next to me praised as a great patriot and great statesman so I think we can hear no more of that." So, because Brown and Clegg paid their respects to someone who died in a horrible plane crash we're not allowed to question the friends he chooses to keep in Europe. Gotchya. Seems Schopenhauer was right, martyrdom is the only way a man can become famous without ability.

You don't need the TV to be repulsed by Cameron's party's policies, unless you like class war that is. We know the Tories do, for as Warren Buffet put it "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." David's blue-blood (seriously, he's a direct descendant of King William IV while his wife's clan came via King Charles II) his Eton education, and his party's monied membership would like nothing more than to increase their share of the pie all the while trying to convince us that they're just like us. He will give a £1.2 billion inheritance tax cut to the richest 2% in Britain, with the benefits going to the 3,000 wealthiest estates worth more than £2 million (including his wife's). Then he promises to end the 50% top rate of tax, giving another £2.4 billion to the richest 1%. Furthermore, he has pledged to cut taxes on the pensions of the richest, handing another £3.2 billion to the same folks. Adding insult to injury, his marriage tax relief policies will give 13 times more to the rich than the poor. To pay for this, he will slash programmes for the middle and the poor, like the Child Trust Fund, SureStart and state schools.

Paradoxically, Brown, leader of the party who led his nation into its unholy alliance with finance, was favoured to win the final TV debate that was to focus on the economy. Despite being the Chancellor of the Exchequer who was the financial architect of the New Labour party that helped destroy the financial world, he's still trying to convince the voters that he is the man to navigate today's rocky economic waters. Sure, we can blame the banks, after all they did purposely set people's homes on fire by packaging loans in such a way that they'd fail, then sold them to the investing public while taking short positions in order to profit when the securities crashed. They bet against our cities and states instead of performing the socially beneficial role of capital allocation. Today's financial markets rent seeking behavior more often than not leads them to destroy value. The banks insatiable appetite has grown to country-sized proportions, and with the UK's debt rivaling that of Greece, there's no guarantee that having maintained the pound will serve as a defense once the PIGS have been consumed.

In case you missed it, while the world has been focusing on those PIGS, the CDS spreads (Credit Default Swaps - hedge bets to protect holders of debt in case of default) have been widening on UK debt, outpacing even Spain, signalling the market's loss of confidence in their ability to repay their debt. No wonder, the UK's deficit for calender 2009 hit £159.2 billion, 11.5% of GDP, a figure higher than Spain and Portugal. Sovereign defaults usually occur after a frenzied run up in debt, on average a 40% increase over four years, coincidentally the exact amount estimated for Greece between 2007 and 2011. Meanwhile, Britain's debt will increase by 44% over the same period. A Conservative win will put Cameron's Bullingdon Club buddy George Osborne in charge of the economy, just what the country needs at a time of crisis. Somewhat surprisingly for those who still write-off the Lib Dems as short on policy, in a debate between the aspiring Chancellors of the Exchequers, Lib Dem Vince Cable outperformed both the incumbent Alistair Darling and the Shallow Chancellor, George Osborne.

Both Clegg and Cameron picked up on the populist anti-bank meme in their final debate, referring to them as casinos, yet, the worst actor of all in this saga has been the governments. The Conservative leader got it right, saying at the 29:48 mark, "if you look at the Labour record over the last 13 years, they did very much hitch the fortunes of the economy to the city of London. And we got in a situation where we ended up with the whole economy having to serve the banks rather than the other way around." Fortunately, Clegg reminded the viewers at 30:51 that "both Conservative and Labour governments now for ages have been far too close to the City, basically preferring the interests of one square mile of the city of London rather than 100,000 square miles of the United Kingdom." No matter how much the Conservative spin doctors try to hide it, Cameron and his team are the broken system. A system that has been rigged by the people in charge, it's not regulation that's bad, it's the neoliberal policy of global capitalism through government/military interventionism to protect the interests of multinational corporations.

Regulatory capture was invented by the railroads but perfected by the financial industry. A financial world of capitalism without capital was enabled by Wall Street's friendly takeover of the US Treasury; Regan came from Merrill Lynch to be followed by the likes of Robert Rubin, Lawrence Summers, Henry Paulson and little Timmy Geithner, men who have made immense fortunes thanks to the rules they helped create. Brown's Labour promises to maintain the status quo and Cameron's Conservative plan to further enrich the banks don't address the problem. When RBS failed in 2008, it had a balance sheet worth roughly 1.5 times the UK economy, do we really want to see what happens when even bigger banks fail? Yet even today, the plutocrats are aware that we still have the power to change the system. Smaller states have to fall in line or face regime change, but for the first time in a long time, the British electorate have the opportunity to attain change through the ballot box. First they ignore us, then they laugh at us, then they fight us. Then we win.

All this makes the UK's May 6th election actually matter. Not in the fake American lackey kinda way in order to "punch above its weight" on the international stage, but in the real change the world kind. With a mid-term election coming up in the US, perhaps a UK upset result could somehow manage to get a bit of press coverage, doubtful I know, but I can dream. Without some kind of wake up call, the world will continue to be subjected to a system that it has lost confidence in, slaving away to maintain your bank credit rating while paying taxes to support their socialized system of profit and loss. Here in Poland, the voter is basically given the same no choice, a fundamentalist PiS or corporatist PO. In Hungary we've just seen a dramatic gain in parliamentary elections for the neo-fascist Jobbik party while Greece has forced the world to chip in to maintain their debt payments to those banks. What the UK and world need is not more of the same; a new way of seeing things is needed to tackle the growing threats of climate change, terrorism, oil dependency, overpopulation, resource depletion, access to clean water and TBTF banks with their global reach and implications. Choice disappeared when Tony Blair and Bill Clinton entered 10 Downing Street and 1600 Pennsylvania Avenue respectively, it's time to break loose from the straight jacket. Who knows how it'll all turn out, who even knows if Clegg will even bring any change, but it's worth finding out, there's still time. After all the UK still isn't in quite the state of the States, but they certainly have been trying their best.

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2 comments:

Troy said...

I think there are two types of people: those who think some sort of profit should be made off of other people being sick...and those who think the very idea is...sick.

Shane said...

Yep, you've divided the world into 2 camps; those who vote Conservative and those who have a soul.