Thursday, January 29, 2009

Impaled on the fork in the road

"Is It Time to Bail Out of America?" by Paul Craig Roberts

It can be a thrill to agree with someone you consider to be on the opposite side of the ideological spectrum. I would guess that finding a point of common agreement with the intellectual "other" stimulates the human brain to produce endorphins - and if you step outside our species for a second, the event might look just like two chimps from feuding troops beginning to bond over a shared banana. Look at what seeking this kind of thrill pushed Christoper Hitchens to become.

I got such a thrill when I agreed with Paul Craig Roberts - the so-called "Father of Reaganomics", former Assistant Secretary of the Treasury under Reagan and former Wall Street Journal editor and columnist - from the moment I read the rhetorical question that is the title of his article. His analysis:

"On January 28 Obama announced his $825 billion bailout plan. This comes on top of President Bush’s $700 billion bailout of just a few months ago.

Obama says his plan will be more transparent than Bush’s and will do more good for the economy.

As large as the bailouts are--a total of $1.5 trillion in four months--the amount is small in relation to the reported size of troubled assets that are in the tens of trillions of dollars. How do we know that by June there won’t be another bailout, say $950 billion?

Where will the money come from?

Obama’s bailout plan, added to the FY 2009 budget deficit he has inherited from Bush, opens a gaping expenditure hole of about $3 trillion.

Who is going to purchase $3 trillion of US Treasury bonds?

Not the US consumer. The consumer is out of work and out of money. Private sector credit market debt is 174% of GDP. The personal savings rate is 2 percent. Ten percent of households are in foreclosure or arrears. Household debt-service ratio is at an all-time high. Household net worth has declined at a record rate. Housing inventories are at record highs.

Not America’s foreign creditors. At best, the Chinese, Japanese, and Saudis can recycle their trade surpluses with the US into Treasury bonds, but the combined surplus does not approach the size of the US budget deficit.

Perhaps another drop in the stock market will drive Americans’ remaining wealth into 'safe' US Treasury bonds.

If not, there’s only the printing press.

The printing press would turn a deflationary depression into an inflationary depression.
Unemployment combined with rising prices would be a killer.

Inflation would kill the dollar as well, leaving the US unable to pay for its imports.

All the Obama regime sees is a 'credit problem.' But the crisis goes far beyond banks’ bad investments. The United States is busted. Many of the state governments are busted. Homeowners are busted. Consumers are busted. Jobs are busted. Companies are busted.

And Obama thinks he has the money to fight wars in Afghanistan and Pakistan."

Damn skippy, Paul. Except that I'm not so sure about your prediction that a debilitating bout of inflation will inevitably ensue. On that point, I agree more with this cartoonist:

If we are facing the most serious economic catastrophe since the Great Depression, as Barack Obama has repeatedly stated (the significance of which is that this idea can safely be considered "centrist" within Unitedstatesian political thought), then why not look to what got the U.S. out of the Great Depression. As you can see from the graph that ran in today's Wall Street Journal, under Obama's stimulus plan the deficit would increase to all of ten percent of U.S. GDP. World War II spending, which got the U.S. out of the Great Depression, represented at its peak 30% of U.S. GDP:
Granted, these recent figures are the product of modern Unitedstatesian accounting, and the measurement "Gross Domestic Product" itself is not and never was intended to be a clear reflection of an economy's health. The creator of the GDP measurement wrote in the report that introduced it, "The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above." But regardless of the problems inherent in the accounting and form of measurement on display above, the U.S. experience with the Great Depression does prove the assertion that vast government spending and highly progressive taxation can return prosperity to an economically devastated society.

Chinese economist Minqi Li succinctly summed up the U.S. experience with and overcoming of the Great Depression as follows: "The short-lived 'irrational exuberance' of the 1920s was followed by the collapse of the 1930s. It was the surge of government spending and nationwide planning during World War Two that pulled the US economy out of the Great Depression. After the war, a greatly enlarged government sector and the active employment of Keynesian macroeconomic policies helped to stabilize the profit at relatively high levels."

This is quite similar to the conservative Unitedstatesian historian Alfred Chandler, who wrote that after the U.S. entered the war, "[t]he government spent far more than the most enthusiastic New Dealer had ever proposed. Most of the output of expenditures was destroyed or left on the battlefields of Europe and Asia, but the resulting increased demand sent the nation into a period of prosperity the like of which had never before been seen. Moreover, the supplying of huge armies and navies fighting the most massive war of all time, required a total control of the national economy. This effort brought corporate managers to Washington to carry out of the most complex pieces of economic planning in history. That experience lessened the ideological fears over the government’s role in stabilizing the economy [in the post-war economy].”

Unitedstatesian conservatives - even smart conservatives like Paul Craig Roberts - are largely ignorant of the historical examples of massive and successful economic performance turned out under socialist governance. (Dead conservative William F. Buckley Jr. was less ignorant of the successes of socialist economic policies, leading him in the 1950s to call for the U.S. to adopt features of Soviet economic policies in order to outperform, and eventually destroy, the Soviet enemy.) During and after World War II, the U.S. was enormously successful in applying socialist policies like central planning, progressive taxation and massive government spending; the Soviet Union, China, Cuba, North Korea also experienced excellent, if initial, results with socialist policies.


But even if the U.S. were to somehow shed its heavy entrenched ideological aversion to socialist policies, there is a wild card in play. The wild card is the outside world. Back during World War II, the U.S. was a creditor nation to whom its World War I allies were massively indebted. Perhaps those foreign loans formed the financial dyke that held back the pressure of inflation and massive currency devaluation when the U.S. began its massive socialist program to arm for the war.

Because today, if the U.S. were to embark on a policy of massive government spending to boost the economy out of recession, as Roberts correctly points out, the U.S.'s creditors might be tempted to pull their line of credit (which exists in the form of their purchases of U.S. Treasury securities with the dollars left over from their trade surpluses). With the U.S.'s foreign rug of credit pulled out from under it, the dollar's value would collapse - absent a nearly unimaginable reduction of the U.S.'s enormous trade deficit with the outside world. Imported goods would become vastly more expensive.

The U.S. could try implementing a highly interventionist/socialist policy of commanding production for the domestic market (to replace imports that would become too expensive as a result of dollar depreciation). But raw materials from foreign countries would become very expensive to buy with a debased dollar, so production would be made dear. Besides, entire factories would have to be built to replace the ones that have long since taken flight to the proximity of highly exploitable foreign laborers.

And by then the whole world would have already fallen apart. The economies of many countries are largely structured to produce things to sell in the world's largest national market, the U.S., for dollars, with which (and only with which) they can buy all sorts of commodities from oil to copper. China, for instance, sells around 20% of its exports in the U.S. only, and with the dollars it receives it buys, among other things, oil and U.S. debt. The dollars oil-producing states receive are used to purchase, among other things, various commodities (like sugar and wheat) and U.S. debt. The dollars these various commodity-producing states receive are used to purchase oil, commodities, and U.S. debt.

Noticing some repetition here? The cornerstone of the system is U.S. debt: once foreign countries stop buying, the dollar collapses, and will no longer be used as the currency in which oil, manufactured good and commodities are denominated.

Thankfully for the U.S., the rest of the world, particularly the semi-peripheral states like Brazil, Russia, India and China, "have no balls" in the eloquent Unitedstatesian turn of phrase. Their respective leaderships are doing a lot of barking at the moment, but there is little indication of any impending bite.

There are major distinctions to be made between yesterday's colonies and today's "developing nations". But to borrow from legal discourse, these are distinctions without much of a difference. The essential similarity between both is that work is done and things are produced in the colonies/developing nations; those things are sold in the imperialist/developed nations; and the lion's share of the profits from the production and selling of these things are "earned by" - more neutrally, "accrue to", or more accurately, "are expropriated by" - the imperialist/developed nations. There are many distinctions to be made between India under British imperialism and sovereign India within the contemporary international economic system, but these distinctions do not create a difference of any transcendent importance.

A 2002 study by China's State Economic and Trade Commission revealed that in the production of one representative manufactured good, profits were split 63/37 between the U.S. and Chinese companies - China being the country in which the item was entirely manufactured. 27% of China's profit was raked in by a Hong Kong-based trading company - a comprador.

The BRIC (Brazil, Russia, India, China) countries are ruled by what amounts to a comprador class. (Remember, there are distinctions between colonial history and contemporary capitalism - but they are distinctions without a difference.) A comprador class is the indigenous segment of a colonized society that profits from their society's colonization. Take the Irish, under British colonization. (The Irish are white and have an affable, familiar culture to match their accents, so Unitedstatesian humans can easily identify with them.) During the Irish famine of the 1940s, while 20-25% of the Irish population was dying of starvation and malnutrition, the Irish comprador class sold direly needed food to the British. And they profited from their sales, although not as much as their British counterparts undoubtedly were.

So long as China's rulers are most greatly influenced by the Chinese comprador class - the capitalists who own or are joint partners with foreign companies in the country's export industries - China will be unlikely to rock the boat. The boat, in this context, being the international economic system, and the roles China and the U.S. currently play in it.

But China may not have to rock the boat. There may be a tsunami.

Friday, January 16, 2009

The misuse of Max Boot

Das Boot: The Unsinkable Career Of America’s Leading Twerpo-Imperialist by Mark Ames

I was so very happy to see this thorough trashing of Max Boot, a man whose name I first heard within an article bemoaning Obama's conservative Cabinet picks. Boot, the article explained, had written a short "think" piece explaining how he was "gobsmacked" by Obama's picks, who just as easily could have been made by a McCain administration. Towards the end of the piece, Boot gave a stunning illustration of ignorance: to him, the political liberal Hillary Clinton is a "neo-liberal", and "'neo-liberalism' [...] is not so different in many respects from 'neo-conservativism.'"

This being the sole instance of Boot's writing I had been subjected to until that point, I imagined the man to be a writer sharing the intellectual caliber and institutional credentials of a Rush Limbaugh or the unattractive tall blonde woman on Fox News. The evidence was clear: Boot clearly did not know what neoliberalism - certainly the most influential intellectual trend of the past half century - is. Yet he felt qualified to write about it as if he did know; clearly, I thought, Max Boot is the name of a second-rate bullshitter and perhaps an aspiring New York Post columnist.

Turns out, Boot is a "senior fellow at the Council on Foreign Relations, columnist at the Los Angeles Times, contributing editor at Weekly Standard, regular contributor to the Wall Street Journal and New York Times, and former top adviser to John McCain’s campaign."

Now, the average person who is not interested in flimsy rationalizations of worldwide exploitation and mass-murder-by-economics (one million killed in the Soviet Union alone, by the application of just one precept of the theory!) has good reason to know nothing about neoliberalism. But an intellectual - or "intellectual" - who receives paychecks from the New York Times, a Republican presidential campaign, the Wall Street Journal, Council on Foreign Relations, etc., either knows what neoliberalism is, or is a peerless (one would hope) ass.

Neoliberalism is not a political but an economic ideology. It is not a branch from the tree of Unitedstatesian political liberalism, but a branch from the tree of economic liberalism: the theory that economies work best when liberated from government control. Economic liberalism was definitively destroyed by the Great Depression, the cause of which economic liberals were entirely unable to explain; nor could they formulate a cure. Economic liberalism laid in a grave for nearly a half-century before stagflation provided the crisis that destroyed its successor: the Keynesian version of capitalism (which had embraced one form of government control of the economy). During the 1970s and '80s, liberalism climbed out of its grave in its new form: neoliberalism. Neoliberalism was a zombie variant of economic liberalism, which terrorized the world's people by immiserating and exploiting the vast majority of the world's population, while showering kingly wealth upon a vanishingly small minority. The only countries to escape the ravages of the neoliberal zombie were those, like China, that retained a significant role in their economies for government control.

Neoconservatives are neoliberal in economic outlook: part of the freedom agenda they so love includes the (neoliberal) freedom of the economically powerful to do whatever they like with their power. Which is ironic in itself, because the other part of neoconservatives' freedom agenda is the freedom of citizens to share equal power in government through democratic voting.

But the most ironic - hypocritical actually - aspect of Max Boot's thought, such as it is, is that he adores the idol of efficiency: the idea that everything on the planet should be put to its most efficient use. (This is what neoliberals believe that unregulated capitalism ensures.) Yet, while idolizing efficiency, Max Boot has chosen to keep the nitrogen and phosphorus in his brain within his skull, rather than putting it to an unarguably more efficient use: organic fertilizer for one of the United States' booming organic farms. Rather than free the elements comprising his body from the stultifying regulation and heavy-handed control of the human body's organizational scheme, he has chosen to keep them so enslaved. This hypocrisy reeks more than Boot's decomposing corpse would in a tropical organic mango plantation.

Hopefully, a neoconservative with a commitment to a true freedom agenda will one day (soon) liberate the molecular constituents of Max Boot from their currently highly inefficient use, and, with the help perhaps of a deli meat slicer, set them free slice by slice to serve the neoliberal goal of their most efficient use: fertilizer.


Lest this strike you as a uniquely violent sentiment, I suggest you read about Boot's opinions on how to treat the world's unpeople by following the imperial British example. Violent, yes - unique, no.

(Evidently, an example of the kind of pornography Max Boot masturbates to.)

Thursday, January 08, 2009

I support Hamas (licking my balls)

I've been keeping a Gaza death toll: as of today, 765 (230 kids) killed by the holy forces of good and light in self-defence; 7 (0 kids) killed by the bloodthirsty terrorist forces of evil and darkness.

A friend interpreted this to mean that I actually thought Hamas to be the holy forces of good and light, and the IDF to be the bloodthirsty terrorist forces of evil and darkness. He made an inference that is not unfounded, but is logically flawed. Of course I was being sarcastic. So I wasn't seriously asserting those moral assignments - good, holy, evil, bloodthirsty - as true. No one would, because the very numbers belie them. But it does not logically follow that I must believe the opposite. Just because I put the needle of sarcasm through the balloon of IDF righteousness and propriety, doesn't mean I inflate an equivalent balloon for Hamas.

Hamas can lick my balls. (I wouldn't enjoy it, but it would serve those homophobic fucks well.). A large percentage of their actions comprise charitable work, which is essential for the brutalized population, but their ideological bent is disgusting. In the context of the Palestinian struggle, the emergence of Hamas is comparable to a hypothetical ultra right Catholic reactionary group beating out the IRA in Ireland during the Troubles, and instituting Canon law in an over the top fashion, for instance executing women suspected of being "loose". Hamas is not too terribly different, in ideological essence if not particulars and position, from ultra right Jewish reactionary groups, like the ultra ultras in Jerusalem who use violence to enforce their religious norms. In fact, religious-militant Zionists like those who supported Rabin's assassination are much like Hamas, but in addition to their different religion they occupy a better power position and have disproportionate influence in a state with far superior weaponry. (Before his assassination, Rabin put it well, pithily criticizing reactionary rabbis "for whom perhaps the name ayatollahs is more fitting than rabbis.") Note that I am comparing here, not equating; and it is quite a revelatory comparison too, for those without oppressive ideological blinkers. To see the truth it reveals, one need only recall the immortal line of the Algerian resistance fighter in The Battle of Algiers, who, when asked by a French journalist to admit cowardice for using bombs hidden in women's baskets and such to kill innocent people, responded: "Of course, if we had your airplanes it would be a lot easier for us. Give us your bombers, and you can have our baskets." (Hamas head Khaled Meshal actually paraphrased this line in a recent interview with Counterpunch, to be published online soon.)

There can be no doubt upon any serious evaluation that if ultra-Orthodox Jews were living under the boot of a foreign occupier on their own land, that they would resort to the very best weapons they had at their disposal; likewise that if Hamas had access to bombers and tanks, they would immediately announce that they will attack solely military targets, and that heretofore any civilian deaths will be purely accidental and tragic. In fact, the religiousity of the two groups is nearly superfluous; just as the Stanford prison experiments demonstrated that anyone can become vile and violent under the right circumstances, any weaker group under the domination of a more powerful group will resist, often violently, with what they feel to be the most effective tactics available. Even suicide bombing is not the sole province of poor, religious fundamentalists; the most comprehensive study of its kind found that pre-2005, the “data show that there is little connection between suicide terrorism and Islamic fundamentalism, or any one of the world’s religions. . . . Rather, what nearly all suicide terrorist attacks have in common is a specific secular and strategic goal: to compel modern democracies to withdraw military forces from territory that the terrorists consider to be their homeland.”

At any rate, if one considers Hamas to be an enemy, the first step (advised by Sun Tzu in his Art of War) is to know it. Ideologically, Hamas and other violent Islamic fundamentalist groups are heavily influenced by the Egyptian intellectual Sayyid Qutb. In 1949, Qutb spent some time in the United States, and came away with the impression that Western culture - already massively influencing his native Egypt - was cold, heartless, materialistic and permeated with alienation. (True, there is a lot of alienation in Unitedstatesian society, but that has economic, not religious roots. If you look up "alienation" in an encyclopedia of intellectual history, you will find mention of Marx, not Mohamed. Qutb was also disgusted by what he saw as the oversexualization of the United States. In 1949. Idiot.) The movements Qutb inspired throughout the Muslim world from Afghanistan to Algeria had as a common goal the removal of Western cultural influence and political and military dominance. Like all conservatives in their various ways, these movements desired a return to an imagined golden age - that never existed.

Hamas emerged from cells of Egypt's Muslim Brotherhood, of which Qutb was a leader in the '50s and 60s. (The Muslim Brotherhood is Hosni Mubarak's sworn enemy, hence his brutal refusal to let even doctors cross the border to Gaza, which is controlled by Brotherhood offspring Hamas.) There is some evidence that the Israeli government actually supported Hamas in its early days as a divide-and-conquer technique to harm the secular nationalist PLO; at the very least, the Israeli government did little to impede Hamas in its early days, (a former Shin Bet chief put it this way: “We did not create it, but we did not hinder its creation”) while clamping down with its full force against the PLO.
Hamas and similar groups are adherents of fundamentalist Islam, which, despite its name, is an ideology in conflict with traditional Islam; different still is modern or liberal Islam. (Those interested in the differences between the three might look here.) The vast majority of the world's Muslims adhere to either traditionalist or liberal Islam (to illustrate by means of generalization, traditionalist Islam is dominant in Karachi and liberal Islam may be dominant in Dubai). As detailed in Adam Curtis' documentary The Power of Nightmares (downloadable here and streamable here), this adherence to traditionalist and liberal Islam both infuriates and confounds Islamic fundamentalists, who think that by overthrowing the venal, nominally Muslim leaders of the dar al-Islam (Islamic world), they will shake Muslims out of their theological slumber and usher in a new golden age of wise and just male religious leadership and chaste, clitoris-less women.

To paraphrase Chris Rock, I am not saying that I support Hamas. But I understand. As in, I understand why Palestinians support them. If it were the imaginary ultra right Catholic nutjobs who were the most viable fighting force against British occupation of Ireland, and I were Irish - I'd be conflicted and lukewarm - but I would support the Irish ultra-Catholic nutjobs as against the Brits. Add to this comparison the fact that Hamas has proven to be more effective than the Palestinian Authority in providing basic services to the population - and the fact of hundreds of noncombatants killed by Israeli bombs, bullets and shells - and you have a potent recipe for widespread Palestinian support of Hamas. Which, while I despise Hamas, I understand.