Monday, March 2, 2015

Why the rise of fascism is again the issue


26 February 2015

The recent 70th anniversary of the liberation of Auschwitz was a reminder of the great crime of fascism, whose Nazi iconography is embedded in our consciousness. Fascism is preserved as history, as flickering footage of goose-stepping blackshirts, their criminality terrible and clear. Yet in the same liberal societies, whose war-making elites urge us never to forget, the accelerating danger of a modern kind of fascism is suppressed; for it is their fascism.

"To initiate a war of aggression...," said the Nuremberg Tribunal judges in 1946, "is not only an international crime, it is the supreme international crime, differing only from other war crimes in that it contains within itself the accumulated evil of the whole."

Had the Nazis not invaded Europe, Auschwitz and the Holocaust would not have happened. Had the United States and its satellites not initiated their war of aggression in Iraq in 2003, almost a million people would be alive today; and Islamic State, or ISIS, would not have us in thrall to its savagery. They are the progeny of modern fascism, weaned by the bombs, bloodbaths and lies that are the surreal theatre known as news.

Like the fascism of the 1930s and 1940s, big lies are delivered with the precision of a metronome: thanks to an omnipresent, repetitive media and its virulent censorship by omission. Take the catastrophe in Libya.

In 2011, Nato launched 9,700 "strike sorties" against Libya, of which more than a third were aimed at civilian targets. Uranium warheads were used; the cities of Misurata and Sirte were carpet-bombed. The Red Cross identified mass graves, and Unicef reported that "most [of the children killed] were under the age of ten".

The public sodomising of the Libyan president Muammar Gaddafi with a "rebel" bayonet was greeted by the then US Secretary of State, Hillary Clinton, with the words: "We came, we saw, he died." His murder, like the destruction of his country, was justified with a familiar big lie; he was planning "genocide" against his own people. "We knew... that if we waited one more day," said President Obama, "Benghazi, a city the size of Charlotte, could suffer a massacre that would have reverberated across the region and stained the conscience of the world."

This was the fabrication of Islamist militias facing defeat by Libyan government forces. They told Reuters there would be "a real bloodbath, a massacre like we saw in Rwanda". Reported on March 14, 2011, the lie provided the first spark for Nato's inferno, described by David Cameron as a "humanitarian intervention".

Secretly supplied and trained by Britain's SAS, many of the "rebels" would become ISIS, whose latest video offering shows the beheading of 21 Coptic Christian workers seized in Sirte, the city destroyed on their behalf by Nato bombers.

For Obama, David Cameron and then French President Nicolas Sarkozy, Gaddafi's true crime was Libya's economic independence and his declared intention to stop selling Africa's greatest oil reserves in US dollars. The petrodollar is a pillar of American imperial power. Gaddafi audaciously planned to underwrite a common African currency backed by gold, establish an all-Africa bank and promote economic union among poor countries with prized resources. Whether or not this would happen, the very notion was intolerable to the US as it prepared to "enter" Africa and bribe African governments with military "partnerships".

Following Nato's attack under cover of a Security Council resolution, Obama, wrote Garikai Chengu, "confiscated $30 billion from Libya's Central Bank, which Gaddafi had earmarked for the establishment of an African Central Bank and the African gold backed dinar currency".

The "humanitarian war" against Libya drew on a model close to western liberal hearts, especially in the media. In 1999, Bill Clinton and Tony Blair sent Nato to bomb Serbia, because, they lied, the Serbs were committing "genocide" against ethnic Albanians in the secessionist province of Kosovo. David Scheffer, US ambassador-at-large for war crimes [sic], claimed that as many as "225,000 ethnic Albanian men aged between 14 and 59" might have been murdered. Both Clinton and Blair evoked the Holocaust and "the spirit of the Second World War". The West's heroic allies were the Kosovo Liberation Army (KLA), whose criminal record was set aside. The British Foreign Secretary, Robin Cook, told them to call him any time on his mobile phone.

With the Nato bombing over, and much of Serbia's infrastructure in ruins, along with schools, hospitals, monasteries and the national TV station, international forensic teams descended upon Kosovo to exhume evidence of the "holocaust". The FBI failed to find a single mass grave and went home. The Spanish forensic team did the same, its leader angrily denouncing "a semantic pirouette by the war propaganda machines". A year later, a United Nations tribunal on Yugoslavia announced the final count of the dead in Kosovo: 2,788. This included combatants on both sides and Serbs and Roma murdered by the KLA. There was no genocide. The "holocaust" was a lie. The Nato attack had been fraudulent.

Behind the lie, there was serious purpose. Yugoslavia was a uniquely independent, multi-ethnic federation that had stood as a political and economic bridge in the Cold War. Most of its utilities and major manufacturing was publicly owned. This was not acceptable to the expanding European Community, especially newly united Germany, which had begun a drive east to capture its "natural market" in the Yugoslav provinces of Croatia and Slovenia. By the time the Europeans met at Maastricht in 1991 to lay their plans for the disastrous eurozone, a secret deal had been struck; Germany would recognise Croatia. Yugoslavia was doomed.

In Washington, the US saw that the struggling Yugoslav economy was denied World Bank loans. Nato, then an almost defunct Cold War relic, was reinvented as imperial enforcer. At a 1999 Kosovo "peace" conference in Rambouillet, in France, the Serbs were subjected to the enforcer's duplicitous tactics. The Rambouillet accord included a secret Annex B, which the US delegation inserted on the last day. This demanded the military occupation of the whole of Yugoslavia - a country with bitter memories of the Nazi occupation - and the implementation of a "free-market economy" and the privatisation of all government assets. No sovereign state could sign this. Punishment followed swiftly; Nato bombs fell on a defenceless country. It was the precursor to the catastrophes in Afghanistan and Iraq, Syria and Libya, and Ukraine.

Since 1945, more than a third of the membership of the United Nations - 69 countries - have suffered some or all of the following at the hands of America's modern fascism. They have been invaded, their governments overthrown, their popular movements suppressed, their elections subverted, their people bombed and their economies stripped of all protection, their societies subjected to a crippling siege known as "sanctions". The British historian Mark Curtis estimates the death toll in the millions. In every case, a big lie was deployed.

"Tonight, for the first time since 9/11, our combat mission in Afghanistan is over." These were opening words of Obama's 2015 State of the Union address. In fact, some 10,000 troops and 20,000 military contractors (mercenaries) remain in Afghanistan on indefinite assignment. "The longest war in American history is coming to a responsible conclusion," said Obama. In fact, more civilians were killed in Afghanistan in 2014 than in any year since the UN took records. The majority have been killed - civilians and soldiers - during Obama's time as president.

The tragedy of Afghanistan rivals the epic crime in Indochina. In his lauded and much quoted book 'The Grand Chessboard: American Primacy and Its Geostrategic Imperatives', Zbigniew Brzezinski, the godfather of US policies from Afghanistan to the present day, writes that if America is to control Eurasia and dominate the world, it cannot sustain a popular democracy, because "the pursuit of power is not a goal that commands popular passion... Democracy is inimical to imperial mobilisation." He is right. As WikiLeaks and Edward Snowden have revealed, a surveillance and police state is usurping democracy. In 1976, Brzezinski, then President Carter's National Security Advisor, demonstrated his point by dealing a death blow to Afghanistan's first and only democracy. Who knows this vital history?

In the 1960s, a popular revolution swept Afghanistan, the poorest country on earth, eventually overthrowing the vestiges of the aristocratic regime in 1978. The People's Democratic Party of Afghanistan (PDPA) formed a government and declared a reform programme that included the abolition of feudalism, freedom for all religions, equal rights for women and social justice for the ethnic minorities. More than 13,000 political prisoners were freed and police files publicly burned.

The new government introduced free medical care for the poorest; peonage was abolished, a mass literacy programme was launched. For women, the gains were unheard of. By the late 1980s, half the university students were women, and women made up almost half of Afghanistan's doctors, a third of civil servants and the majority of teachers. "Every girl," recalled Saira Noorani, a female surgeon, "could go to high school and university. We could go where we wanted and wear what we liked. We used to go to cafes and the cinema to see the latest Indian film on a Friday and listen to the latest music. It all started to go wrong when the mujaheddin started winning. They used to kill teachers and burn schools. We were terrified. It was funny and sad to think these were the people the West supported."

The PDPA government was backed by the Soviet Union, even though, as former Secretary of State Cyrus Vance later admitted, "there was no evidence of any Soviet complicity [in the revolution]". Alarmed by the growing confidence of liberation movements throughout the world, Brzezinski decided that if Afghanistan was to succeed under the PDPA, its independence and progress would offer the "threat of a promising example".

On July 3, 1979, the White House secretly authorised support for tribal "fundamentalist" groups known as the mujaheddin, a program that grew to over $500 million a year in U.S. arms and other assistance. The aim was the overthrow of Afghanistan's first secular, reformist government. In August 1979, the US embassy in Kabul reported that "the United States' larger interests... would be served by the demise of [the PDPA government], despite whatever setbacks this might mean for future social and economic reforms in Afghanistan." The italics are mine.

The mujaheddin were the forebears of al-Qaeda and Islamic State. They included Gulbuddin Hekmatyar, who received tens of millions of dollars in cash from the CIA. Hekmatyar's specialty was trafficking in opium and throwing acid in the faces of women who refused to wear the veil. Invited to London, he was lauded by Prime Minister Thatcher as a "freedom fighter".

Such fanatics might have remained in their tribal world had Brzezinski not launched an international movement to promote Islamic fundamentalism in Central Asia and so undermine secular political liberation and "destabilise" the Soviet Union, creating, as he wrote in his autobiography, "a few stirred up Muslims". His grand plan coincided with the ambitions of the Pakistani dictator, General Zia ul-Haq, to dominate the region. In 1986, the CIA and Pakistan's intelligence agency, the ISI, began to recruit people from around the world to join the Afghan jihad. The Saudi multi-millionaire Osama bin Laden was one of them. Operatives who would eventually join the Taliban and al-Qaeda, were recruited at an Islamic college in Brooklyn, New York, and given paramilitary training at a CIA camp in Virginia. This was called "Operation Cyclone". Its success was celebrated in 1996 when the last PDPA president of Afghanistan, Mohammed Najibullah - who had gone before the UN General Assembly to plead for help - was hanged from a streetlight by the Taliban.

The "blowback" of Operation Cyclone and its "few stirred up Muslims" was September 11, 2001. Operation Cyclone became the "war on terror", in which countless men, women and children would lose their lives across the Muslim world, from Afghanistan to Iraq, Yemen, Somalia and Syria. The enforcer's message was and remains: "You are with us or against us."

The common thread in fascism, past and present, is mass murder. The American invasion of Vietnam had its "free fire zones", "body counts" and "collateral damage". In the province of Quang Ngai, where I reported from, many thousands of civilians ("gooks") were murdered by the US; yet only one massacre, at My Lai, is remembered. In Laos and Cambodia, the greatest aerial bombardment in history produced an epoch of terror marked today by the spectacle of joined-up bomb craters which, from the air, resemble monstrous necklaces. The bombing gave Cambodia its own ISIS, led by Pol Pot.

Today, the world's greatest single campaign of terror entails the execution of entire families, guests at weddings, mourners at funerals. These are Obama's victims. According to the New York Times, Obama makes his selection from a CIA "kill list" presented to him every Tuesday in the White House Situation Room. He then decides, without a shred of legal justification, who will live and who will die. His execution weapon is the Hellfire missile carried by a pilotless aircraft known as a drone; these roast their victims and festoon the area with their remains. Each "hit" is registered on a faraway console screen as a "bugsplat".

"For goose-steppers," wrote the historian Norman Pollock, "substitute the seemingly more innocuous militarisation of the total culture. And for the bombastic leader, we have the reformer manque, blithely at work, planning and executing assassination, smiling all the while."

Uniting fascism old and new is the cult of superiority. "I believe in American exceptionalism with every fibre of my being," said Obama, evoking declarations of national fetishism from the 1930s. As the historian Alfred W. McCoy has pointed out, it was the Hitler devotee, Carl Schmitt, who said, "The sovereign is he who decides the exception." This sums up Americanism, the world's dominant ideology. That it remains unrecognised as a predatory ideology is the achievement of an equally unrecognised brainwashing. Insidious, undeclared, presented wittily as enlightenment on the march, its conceit insinuates western culture. I grew up on a cinematic diet of American glory, almost all of it a distortion. I had no idea that it was the Red Army that had destroyed most of the Nazi war machine, at a cost of as many as 13 million soldiers. By contrast, US losses, including in the Pacific, were 400,000. Hollywood reversed this.

The difference now is that cinema audiences are invited to wring their hands at the "tragedy" of American psychopaths having to kill people in distant places - just as the President himself kills them. The embodiment of Hollywood's violence, the actor and director Clint Eastwood, was nominated for an Oscar this year for his movie, 'American Sniper', which is about a licensed murderer and nutcase. The New York Times described it as a "patriotic, pro-family picture which broke all attendance records in its opening days".

There are no heroic movies about America's embrace of fascism. During the Second World War, America (and Britain) went to war against Greeks who had fought heroically against Nazism and were resisting the rise of Greek fascism. In 1967, the CIA helped bring to power a fascist military junta in Athens - as it did in Brazil and most of Latin America. Germans and east Europeans who had colluded with Nazi aggression and crimes against humanity were given safe haven in the US; many were pampered and their talents rewarded. Wernher von Braun was the "father" of both the Nazi V-2 terror bomb and the US space programme.

In the 1990s, as former Soviet republics, eastern Europe and the Balkans became military outposts of Nato, the heirs to a Nazi movement in Ukraine were given their opportunity. Responsible for the deaths of thousands of Jews, Poles and Russians during the Nazi invasion of the Soviet Union, Ukrainian fascism was rehabilitated and its "new wave" hailed by the enforcer as "nationalists".

This reached its apogee in 2014 when the Obama administration splashed out $5 billion on a coup against the elected government. The shock troops were neo-Nazis known as the Right Sector and Svoboda. Their leaders include  Oleh Tyahnybok, who has called for a purge of the "Moscow-Jewish mafia" and "other scum", including gays, feminists and those on the political left.

These fascists are now integrated into the Kiev coup government. The first deputy speaker of the Ukrainian parliament, Andriy Parubiy, a leader of the governing party, is co-founder of Svoboda. On February 14, Parubiy announced he was flying to Washington get "the USA to give us highly precise modern weaponry". If he succeeds, it will be seen as an act of war by Russia.

No western leader has spoken up about the revival of fascism in the heart of Europe - with the exception of Vladimir Putin, whose people lost 22 million to a Nazi invasion that came through the borderland of Ukraine. At the recent Munich Security Conference, Obama's Assistant Secretary of State for European and Eurasian Affairs, Victoria Nuland, ranted abuse about European leaders for opposing the US arming of the Kiev regime. She referred to the German Defence Minister as "the minister for defeatism". It was Nuland who masterminded the coup in Kiev. The wife of Robert D. Kagan, a leading "neo-con" luminary and co-founder of the extreme right wing Project for a New American Century, she was foreign policy advisor to Dick Cheney.

Nuland's coup did not go to plan. Nato was prevented from seizing Russia's historic, legitimate, warm-water naval base in Crimea. The mostly Russian population of Crimea - illegally annexed to Ukraine by Nikita Krushchev in 1954 - voted overwhelmingly to return to Russia, as they had done in the 1990s. The referendum was voluntary, popular and internationally observed. There was no invasion.

At the same time, the Kiev regime turned on the ethnic Russian population in the east with the ferocity of ethnic cleansing. Deploying neo-Nazi militias in the manner of the Waffen-SS, they bombed and laid to siege cities and towns. They used mass starvation as a weapon, cutting off electricity, freezing bank accounts, stopping social security and pensions. More than a million refugees fled across the border into Russia. In the western media, they became unpeople escaping "the violence" caused by the "Russian invasion". The Nato commander, General Breedlove - whose name and actions might have been inspired by Stanley Kubrick's Dr. Strangelove - announced that 40,000 Russian troops were "massing". In the age of forensic satellite evidence, he offered none.

These Russian-speaking and bilingual people of Ukraine - a third of the population - have long sought a federation that reflects the country's ethnic diversity and is both autonomous and independent of Moscow. Most are not "separatists" but citizens who want to live securely in their homeland and oppose the power grab in Kiev. Their revolt and establishment of autonomous "states" are a reaction to Kiev's attacks on them. Little of this has been explained to western audiences.

On May 2, 2014, in Odessa, 41 ethnic Russians were burned alive in the trade union headquarters with police standing by. The Right Sector leader Dmytro Yarosh hailed the massacre as "another bright day in our national history". In the American and British media, this was reported as a "murky tragedy" resulting from "clashes" between "nationalists" (neo-Nazis) and "separatists" (people collecting signatures for a referendum on a federal Ukraine).

The New York Times buried the story, having dismissed as Russian propaganda warnings about the fascist and anti-Semitic policies of Washington's new clients. The Wall Street Journal damned the victims - "Deadly Ukraine Fire Likely Sparked by Rebels, Government Says". Obama congratulated the junta for its "restraint".

If Putin can be provoked into coming to their aid, his pre-ordained "pariah" role in the West will justify the lie that Russia is invading Ukraine. On January 29, Ukraine's top military commander, General Viktor Muzhemko, almost inadvertently dismissed the very basis for US and EU sanctions on Russia when he told a news conference emphatically: "The Ukrainian army is not fighting with the regular units of the Russian Army".  There were "individual citizens" who were members of "illegal armed groups", but there was no Russian invasion. This was not news. Vadym Prystaiko, Kiev's Deputy Foreign Minister, has called for "full scale war" with nuclear-armed Russia.

On February 21, US Senator James Inhofe, a Republican from Oklahoma, introduced a bill that would authorise American arms for the Kiev regime. In his Senate presentation, Inhofe used photographs he claimed were of Russian troops crossing into Ukraine, which have long been exposed as fakes. It was reminiscent of Ronald Reagan's fake pictures of a Soviet installation in Nicaragua, and Colin Powell's fake evidence to the UN of weapons of mass destruction in Iraq.

The intensity of the smear campaign against Russia and the portrayal of its president as a pantomime villain is unlike anything I have known as a reporter. Robert Parry, one of America's most distinguished investigative journalists, who revealed the Iran-Contra scandal, wrote recently, "No European government, since Adolf Hitler's Germany, has seen fit to dispatch Nazi storm troopers to wage war on a domestic population, but the Kiev regime has and has done so knowingly. Yet across the West's media/political spectrum, there has been a studious effort to cover up this reality even to the point of ignoring facts that have been well established... If you wonder how the world could stumble into world war three - much as it did into world war one a century ago - all you need to do is look at the madness over Ukraine that has proved impervious to facts or reason."

In 1946, the Nuremberg Tribunal prosecutor said of the German media: "The use made by Nazi conspirators of psychological warfare is well known. Before each major aggression, with some few exceptions based on expediency, they initiated a press campaign calculated to weaken their victims and to prepare the German people psychologically for the attack... In the propaganda system of the Hitler State it was the daily press and the radio that were the most important weapons." In the Guardian on February 2, Timothy Garton-Ash called, in effect, for a world war. "Putin must be stopped," said the headline. "And sometimes only guns can stop guns." He conceded that the threat of war might "nourish a Russian paranoia of encirclement"; but that was fine. He name-checked the military equipment needed for the job and advised his readers that "America has the best kit".

In 2003, Garton-Ash, an Oxford professor, repeated the propaganda that led to the slaughter in Iraq. Saddam Hussein, he wrote, "has, as [Colin] Powell documented, stockpiled large quantities of horrifying chemical and biological weapons, and is hiding what remains of them. He is still trying to get nuclear ones." He lauded Blair as a "Gladstonian, Christian liberal interventionist". In 2006, he wrote, "Now we face the next big test of the West after Iraq: Iran."

The outbursts - or as Garton-Ash prefers, his "tortured liberal ambivalence" - are not untypical of those in the transatlantic liberal elite who have struck a Faustian deal. The war criminal Blair is their lost leader. The Guardian, in which Garton-Ash's piece appeared, published a full-page advertisement for an American Stealth bomber. On a menacing image of the Lockheed Martin monster were the words: "The F-35. GREAT For Britain". This American "kit" will cost British taxpayers £1.3 billion, its F-model predecessors having slaughtered across the world.  In tune with its advertiser, a Guardian editorial has demanded an increase in military spending.

Once again, there is serious purpose. The rulers of the world want Ukraine not only as a missile base; they want its economy. Kiev's new Finance Minister, Nataliwe Jaresko, is a former senior US State Department official in charge of US overseas "investment". She was hurriedly given Ukrainian citizenship. They want Ukraine for its abundant gas; Vice President Joe Biden's son is on the board of Ukraine's biggest oil, gas and fracking company. The manufacturers of GM seeds, companies such as the infamous Monsanto, want Ukraine's rich farming soil.

Above all, they want Ukraine's mighty neighbour, Russia. They want to Balkanise or dismember Russia and exploit the greatest source of natural gas on earth. As the Arctic ice melts, they want control of the Arctic Ocean and its energy riches, and Russia's long Arctic land border. Their man in Moscow used to be Boris Yeltsin, a drunk, who handed his country's economy to the West. His successor, Putin, has re-established Russia as a sovereign nation; that is his crime.

The responsibility of the rest of us is clear. It is to identify and expose the reckless lies of warmongers and never to collude with them. It is to re-awaken the great popular movements that brought a fragile civilisation to modern imperial states. Most important, it is to prevent the conquest of ourselves: our minds, our humanity, our self respect. If we remain silent, victory over us is assured, and a holocaust beckons.
Follow John Pilger on twitter @johnpilger

Economics prize: who wants one? – it’ll cost you

by Michael Roberts

Can you believe it: the first Nobel prize in economics was sold at auction last week? Like the science, peace and literature prizes, the economics prize is awarded for making an important advance in human understanding or harmony. But when you look at the list of economics winners, you may wonder whether there has been any winning economist who deserves that accolade (Milton Friedman, Gary Becker, Robert Lucas, Eugene Fama). Some of them have actually set economics back, not forward. Maybe it is not accident that the economics prize is not funded or chosen by Norway’s Nobel Foundation but by the Swedish Riksbank, the central bank.

But then if you look at some of the winners of Peace prize, things are not much better (Henry Kissinger, Menachim Begin, Mother Teresa, FW de Klerk, Shimon Peres, Barack Obama (after less than one year), and the European Union (?)).

Anyway, last week, the first Nobel Prize in economics to go for auction sold for $390,848. That’s more than for prizes in physics, but far from the million-plus payouts for prizes for medicine or peace.
It was the prize awarded Simon Kuznets in 1971 that sold. Kuznets is known as the author of the gross domestic product measurement that now serves as the key benchmark for the size and growth of economies worldwide. He’s also famous for the Kuznets Curve, which suggests that as a country’s level of economic development increases, inequality initially rises but then falls. This latter conclusion has been disputed by Thomas Piketty and others in their recent works (see my post,

The price for the Kuznets prize was nowhere near that of Francis Crick and James Watson‘s Nobels, which sold in 2013 and 2014 for millions each. Their discovery of the double-helix structure of DNA puts them among the most famous scientists of the century.
Why the difference in price for these prizes at auction: the intrinsic value of the medal?; supply and demand?; inflation?.  I leave that for any of these eminent economists to tell us:

US Congress debates drone attacks on Welsh capital.

I can't be a racist, his mother's Welsh says Guiliani.
from Ivan Testikoff.

Hawks in the US Congress are calling for a pre-emptive strike aimed at the Welsh cities of Swansea and Cardiff, Foxed news reports.  “We have every right to defend the United States if we think a nation is preparing to commit acts of terror against us.” Sen. John McCain told the media outlet.

Gove. Rick Perry of Texas said he had never heard of Wales until recently and that this alone justifies a strike. “Where have they been hiding?”, he asked Congress at a recent session. “I am convinced after hearing their language that it is a form of Arabic, these people are clearly Jihadists” he said, “just listen to them talk----they are ungodly people”

Bill O’Really. Foxed News host, said that the Welsh Jihadists are escaping capture by fleeing across the border in to Jordan, a US ally.  As a man of Irish heritage he is appalled that "Welsh Jihadists and their strange language", should be given any leeway.

Former US Senator, Joe Lieberman, one of the last prominent Republicrats, has been even more hawkish calling for “boots on the ground”. Asked why such a hawkish stand, Lieberman replied that he was tired of some Welsh people claiming that they are the lost tribe of Israel because their language sounds like Hebrew, “Enough of this anti-Semitism” Lieberman shot back.

Rudolph Guiliani said he wasn't sure where in the Middle East Wales was situated but he is sure that Barack Obama’s mother was Welsh and that he immediately be removed from office.

Opposition from some prominent Democrats is anticipated as they don't "love" America John McCain said. But Hilary Clinton, who said she knows exactly where Wales is and it's not the Middle East taking a swipe at her Republican colleagues weaknesses on the geography front, said "It's not unusual for the country to produce singers like Tom Jones.". But she accepts that the Welsh fascination with Delilah, does lend credibility to the argument that these people are of Semitic origin. She agreed with former Senator Lieberman though that something has to be done to curb the threats of terrorism and the loss of our American way of life.  She complimented Britain’s defense minister who this week called for increased defense spending as Russia is a threat to the British way of life and Vladimir Putin as great a threat to Europe as Islamic State.

Clinton’s one objection was a preemptive strike against Cardiff, “I’m a Shirley Bassey fan” she told TMZ news, “I don’t care if she is half Nigerian, she's not Boko Haram. It would be better if we bombed Aberystwith instead.” She also suggested Snowdonia as an alternative site for a drone attack as this is where "Welsh Jihadists learn their evil skills..

Former US president George W. Bush added his support, “We cannot allow these people to destroy our freedoms” he said, “We have a right to stand our ground. You’re either fer us or agin us-----bring ‘em on.”

Humanity should be eternally grateful that the leaders of the United States of America in Congress are willing to sacrifice the children of the American working class in order for us all to be safe from tyranny.

Homeless Man Shot by LA Cops

I just watched the clip of that homeless man being shot by the cops in LA. Two things jump out at me in the presentation from KCAL LA. One is that apparently the man has been known to have "battles with mental illness" and has been living on Skid Row for 6 months.  That’s the first thing we should all be enraged about. What sort of society is it that cannot take care of people with mental issues and allows them to sleep in the street?  An encounter with the forces of the state leaves a homeless, mentally ill man dead.  That's the society in which we live.  The state was not there to help him and if it was it sent the wrong people, people not qualified to help him. 

Then I had to laugh at the insanity of this one: The station froze the video at the point at which the man was shot but left the sound on so we could hear the gunfire.  Why did they do that?  The news “can’t show someone dying on the air.” Yes, that’s what the newscaster said.

Our children see people dying all the time on the air. They see guns pointed at people all the time on the air perhaps hundreds of thousands of times before they reach adulthood.  They see women slashed, raped etc. But whatever we do, don’t show it in real life. This is one of the paradoxes of US society.   Just like a 19 year old can go kill someone in one of the 1%’s corporate wars or appear in a porno movie yet they can’t go and buy a bottle of beer.

It’s a strange place in many ways.

Sunday, March 1, 2015

Bipolar capitalism

by Michael Roberts

In a recent article (, Noah Smith pointed out that “Modern macroeconomists think that recessions and booms are random fluctuations around a trend. These fluctuations tend to die out — a deep recession leads to a fast recovery, and a big expansion tends to evaporate quickly. Eventually, the trend re-establishes itself after maybe five years. No matter what happens — whether the central bank lowers interest rates, or the government spends billions on infrastructure — the bad times will be over soon enough, and the good old steady growth trend will reappear.”

“But what if it’s wrong?”
says Smith, “What if recessions deal permanent injuries to an economy”. Smith pointed out that right-wing economists have criticised the idea that after every recession comes a boom. Greg Mankiw (see my post,,
back in 2009, reckoned that the Great Recession would herald a lost decade of output as major economies failed to get back to the trend growth rate before the crisis. Ironically, as smith says, liberal Keynesian economist, Paul Krugman, was among the optimists. He was wrong and Mankiw was right.

Of course, Keynesians do have an answer to why economies don’t bounce back after a deep recession. I have described their arguments in various papers and posts ( Smith brings to ur attention one such Keynesian answer from Roger Farmer, Professor of Economics in Los Angeles. I have referred to his work before (

Farmer reckons that economies are driven by “animal spirits” i.e. bursts of enthusiasm and depressions by capitalists to invest or not. Apparently, all can be explained by the view that capitalists are really suffering from you could call a ‘bipolar syndrome’. As Smith puts it: “A burst of pessimism can knock the economy from a good equilibrium into a bad one and it can then stay there until a burst of optimism comes along to knock it back.” So, reckons Farmer, governments must step in to provide some stability to this fragile capitalist mentality.

Farmer’s policy prescription is for governments and central banks buy up the stock market so that capitalists will be so pleased with this that they will start investing. Well, stock markets round the major economies are at record highs, thanks to cheap money injected by central banks – and yet the world economy remains in sluggish mode and some parts, like Japan and southern Europe are in ‘permanent recession’ or depression.

Another right-wing economist has complained that the Keynesians are far too optimistic about capitalist economies recovering with a judicious bit of central bank quantitative easing and government spending. John Taylor is also a West Coast professor and makes the point that the US economic recovery has never been so weak, even worse than the recovery after the deep double dip recession of the early 1980s (see graph below) – and the US economy is doing the best out the major advanced capitalist economies
As Taylor sarcastically described the US ‘recovery’: “At the time of the first anniversary of current recovery in 2010, it showed clear signs of weakness compared to the recovery from the recessions in the early. By the recovery’s second anniversary in 2011, it was weak for long enough that I called it a recovery in name only, so weak as to be nonexistent. By the recovery’s third anniversary in 2012, it was now the worst recovery from a deep recession in American history. By the recovery’s fourth anniversary in 2013, few disputed any more that it was unusually weak and disappointing. By the recovery’s fifth anniversary, we were so far away from the recession that linking the terrible performance to the recession became increasing far-fetched. With the recovery now approaching its sixth anniversary, there is more optimism that we are finally coming out the excruciating slow growth.”

The latest US GDP figures revised just yesterday for the fourth quarter of 2014 show that average growth since 2009 has been just 2.2% a year compared with 4.4% in the corresponding quarters of the 1980s recovery. And as of January 2015, the employment-to-population ratio is still lower than at the start of the recovery.

Both Mankiw and Taylor make these arguments because they want to score points against the Obama administration and the Keynesian economists who reckon that the government must intervene to help the ‘bipolar’ capitalist sector. Their argument is that ‘intervention’ just makes things worse. Better to let capitalism cleanse itself of dead capital, keep corporate taxes low and maintain ‘normal’ interest rates. But this ‘liquidationist’ approach does not work either.

In a new paper, David Papell and Ruxandra Prodan, Professor of Economics and Clinical Assistant Professor of Economics, respectively, at the University of Houston, find that deep recessions after a financial crash can take up to nine years before growth returns to trend. But this time it is different – it’s even worse (
Permanent recession
Looking at the latest projections of the US Congressional Budget Office (CBO), they reckon that US real GDP will never return to its pre-Great Recession growth path. “The projected decrease in potential GDP is unprecedented, as almost all postwar U.S. recessions, postwar European recessions, slumps associated with European financial crises, and even the Great Depression of the 1930s, were characterized by an eventual return to potential GDP.”

US real GDP will permanently be 7.2% below the pre-Great Recession growth path because trend real GDP continued to rise during the recession. They call this a “purely permanent recession”. But as readers of this blog will know, I characterise this as a Long Depression, a rare event in capitalism. The CBO reckons that the US trend growth rate will slow to just 1.7% and will never be above 2% a year for the foreseeable future!

Why is capitalism locked into a depression? Well, mainstream economics has debated this, swinging between two causes for this ‘secular stagnation’: permanently lower productivity growth and innovation (Robert Gordon) or too high rate of interest or too low ‘animal spirits’ (Larry Summers) – see my post

In another paper just out, three economists find that long-run US real GDP growth has been declining for some time and the main reason is a slowdown in the growth of the productivity of labour ( Capitalists are failing to boost productivity growth enough through new technology.
Falling productivity

And two more economists show that worker productivity in the major economies has been persistently weak since the onset of the global crisis ( “We find that persistently weak productivity is not normally a feature of financial crises in advanced economies – this time has been different. Looking sector by sector, the biggest falls in most countries have been in manufacturing. The UK stands out in having also seen a dramatic fall in service sector productivity growth, now one of the slowest in our sample of countries.”

It seems that capitalism is now in a permanent bipolar disorder – a long depression.

Friday, February 27, 2015

Labor Notes' Brenner doesn't inspire.

By Richard Mellor
Afscme Local 444, retired.

The speaker above, Mark Brenner, is the Director of Labor Notes, an organization that has annual conferences, quite often well attended by rank and file union members. It publishes some good material for activists.  When I was part of the leadership of Afscme Local 444 in the 1990’s we made Labor Notes’ material readily available to our members although some leading activists in LN were extremely sectarian toward other union militants. It was at a Labor Notes conference in the late 1980’s where two of us as delegates from Afscme Local 444 met Anthony Mazzochi* and asked him if our local organized a meeting for him to speak at in Oakland would he come. He did and we had a very successful meeting on the need for a Labor Party in the US.

I would argue that Brenner and the leadership at Labor Notes tend to tailor their views and general approach toward the left wing of the bureaucracy that sits atop organized labor rather than openly challenging and leading an organizing campaign against the disastrous pro business policies of this entrenched group.  It is these policies which flow from the bureaucracy’s adherence to the Team Concept----the view that workers and employers have the same interests---that are at the root of the disastrous decline in union membership and the accompanying decline in our living standards over the past period.

Brenner’s speech above is more of the same.  He talks of the need for the unions to meet the members “where they’re at” meaning the workplace.  He says correctly that we “Can’t expect workers to take risks if the union can’t show power on the job” and he makes it clear that this means the power to “disrupt” economic activity “hurting companies in the pocketbook.”

I agree with Brenner when he says that union needs to “organize the already organized.” and that we “ignore” this every day. His main focus is on democracy though and how democracy is power and that the role of the multitudes of staff should be to help workers learn the skills they need and so on.

He says, “It’s about more than paying dues and voting. Unions have to create the space for rank and filers to strategize and plan. Democracy can be a hot mess—but there’s no shortcut around building leaders who know what they’re fighting for.”

Of course we have to fight for democracy in our unions, but
--> Brenner talks about union democracy as he is sitting with people who strangle it and says nothing about this.  The AFT has total slate voting from what I understand and you cannot get on the union’s executive board without being in the leadership’s caucus.  Incidentally, the CTU leadership joined this caucus in order to get a seat on the board.
There is a reason for this obsession with democracy from Labor Notes and some other reform groups in the unions; it will not likely bring them in to a direct confrontation with the right wing, pro-management bureaucracy that is at the helm of our national organizations. Almost all of the present leadership will agree that we need democracy. The AFL-CIO executive committee that had only one election for President in 100 years would also agree democracy is important. So, incidentally, do Barack Obama and Rahm Emmanuel. And that raises another point that Brenner completely ignores.  The union hierarchy practices the Team Concept with the bosses on the job and practice it in the political sphere through an alliance with the Democratic Party.  Brenner consciously leaves this issue alone as that too would bring him and Labor Notes in to direct conflict with the AFT leadership and their co-thinkers at the AFL-CIO.  It is clear that it is not to the average dues payer that Brenner is orienting to but a section of the labor hierarchy, this imaginary left wing.

Brenner says, “The best leaders trust the members. They have faith that their co-workers, when presented with the same information and analysis they have, will reach the same conclusions. Their job is to get the ball rolling and get out of the way.”

For Brenner it’s all about “teaching” workers and “creating space” a very egalitarian term used by all sorts of liberal types. And it is important for workers to be able to understand organizational details. But his reference to “leaders” in the above quote is one of the few times perhaps the only time in his 13- minute contribution that he uses the word.

Brenner continually refers to “the union” or “unions” as if the folks that pay the dues and the stifling bureaucracy that receives them are the same and play the same role. In fact, a prominent leader of organized labor, an AFL-CIO executive board member is present and Brenner refers to him.

Brenner also talks of raising expectations.  The present leadership of organized labor supported by an army of staff, many of them highly educated as well as former members of left or socialist groups, steer very clear of raising expectations.  We see it in every dispute. The general strategy of the leadership is damage control, trying to convince the bosses to demand fewer concessions and if they have to eliminate benefits and other treasures won over decades, deny them to the new hires instead, they can't vote on a contract that will strip benefits for them.

So these two subjects, the leadership and demands, or what we should fight for, are absent in Brenner’s contribution.  Instead Brenner and Labor Notes says we need to teach workers the skills and then like good teachers, step out of the way.  Armed with the demand for democracy in the union and how to talk to each other, workers will bring organized power to the table.  Then we can return to the direct action tactics of the past..

But it is not because they don’t understand how to file a grievance that keeps workers heads down, it’s the fear of the bosses on the one hand and the lack of confidence in the present leadership doing anything about it on the other. In fact, time after time when rank and file members move in the direction of confrontation, of actually fighting back, the weight of the bureaucracy and its army of staff comes out on the side of the employer.  We have to be “reasonable”.  “Now’s not the time”. The present union leadership will do whatever it can to suppress any movement from below that threatens the relationship they have built with the bosses on the basis of labor peace.

There are too many examples of these betrayals to list them. Concessionary contracts forced down members' throats through all sorts of manipulative measures (Boeing is a good example of a recent one).   Check out the UAW local and its leaders known as the Cleveland Five that struck a Freightliner plant in North Carolina and the role of the UAW leadership there.  The SEIU contracts here in the Bay Area a couple of years ago that were voted down only to be forced through by a leadership that claimed the members were “confused”. 

Check out some of the commentaries on this blog with regard to recent disputes, like the Waste Management strike in San Leandro CA where the Teamster leadership told their members to scab on strikers at this facility. Or the Bay Area rail transit strike in 2013 where transit workers that operate the buses were told to pick up the slack due to the absence of trains despite being legally allowed to strike with their brothers and sisters on light rail. They are even in the same unions but different locals.  These disastrous polices are not a product of the “union” which includes the membership; they are the product of the leadership, a consciously designed failure.

Yes, we need to “teach” workers.

We are where we are not simply because, as Brenner says the “union” is at fault.  We are at this point because of the role played by the trade union leadership from the top down. Present at the forum above was AFL-CIO Vice President Tefere Gebre. Brenner says of him,  “AFL-CIO Vice-President Tefere Gebre, for example, made a point of saying we can’t do anything without rank-and-file members at the center.”

But the entire leadership of the AFL-CIO has used the resources and power at their command to ensure that the members are not “at the center”.  What sort of campaign has Tefere Gebre waged inside organized labor against that policy? Tefere Gebre and the leadership he is a part of is a major part of the problem and that must be made clear by any labor activist bent on transforming our organizations because we have to have a strategy for dealing with their role., Brenner says there needs to be an “…overhaul of the relationship between members and the officers and staff down at the union hall”.  Well that’s a nice way of putting it. The leadership and the staff that carries out their policies will not take such an overhaul lightly. They will not sit idly by as we develop fighting caucuses and opposition groups within organized labor that can bring this overhaul to fruition.

The leadership’s role has to be brought in to the open and they have to be held accountable. Brenner covers this role up with his talk of the “union”.  And part of building an alternative from the ground up is having a program that meets the needs of the members and all workers. The disgusting silence of organized labor’s leadership with 12 million members  in the face of the events in Ferguson and throughout the country is criminal.

A small group of dedicated rank and file members can begin the process of changing the unions from employment agencies providing labor power to the bosses at profitable prices to genuine fighting organizations but they have to stand for something other than democracy in the abstract. In the public sector in particular, where there is somewhat more job security, opposition groups can be built in this way and challenge the present leadership for power.  But they have to openly state what they are going to do differently and what their program is, what they will fight for. By that I mean demands that speak to our needs, wages, jobs, more leisure time through a shorter workweek with no loss in pay, in many workplaces on-site childcare should be provided and other important demands that would improve the quality of life and give us more control in the workplace.

This strategy combined with democratic rights is what will draw the ranks in to activity. I’m sorry but the contribution above wouldn’t inspire anyone to take the steps needed to change the concessionary course of the present union movement.

* Anthony Mazzochi was a leader in the Oil, Chemical and Atomic Workers Union (OCAW) who was calling for a Labor Party in the 1980’s and 90’s. Afscme Local 444, organized a meeting for him to speak at in 1989, it was successful and Mazzochi himself said that it led him to form Labor Party Advocates.

Turkey: Violence Against Women Rockets to Top of the Agenda

Reprinted from the Socialist Network.

Published: 25 February 2015
Author: Tayfun Hatipoglu

The gruesome sexual assault and murder of Ozgecan Aslan, a 20-year-old female psychology student has sparked off a nationwide protest movement against the violent treatment of women in Turkey.

Ozgecan was travelling on a public minibus in the south central city of Mersin two weeks ago, when according to confessions by two of the suspects involved, she was targeted by the driver as the last passenger left on board. The driver then left the normal route despite Ozgecan’s protests and drove to a remote place. When he tried to rape her she bravely fought back scratching his face and using a pepper spray on him. In response the driver stabbed the girl several times and finally finished her off with an iron pipe. Then apparently the driver cut off the student’s fingers fearing that the police might find his DNA under her nails.

As if this wasn’t bad enough we are informed that the killer drove the vehicle back home where he persuaded his father and a friend to help him dispose of the body which they did by burning and burying it. Fortunately, the military police who had been alerted to the girl’s disappearance stopped the minibus when it was returning and discovered some of the student’s blood and clothing inside.

This case has many parallels with the rape and murder of a young woman just over two years ago on a public bus in Delhi which sparked off mass protests all over India. And in this case too the Mersin murder has ignited demonstrations and anger throughout Turkey.

Explosion of Protest
As the grisly details of the murder emerged angry groups of women vented their fury at this and other examples of the increasing violence being experienced by women in Turkey. The dead student’s funeral in Tarsus was attended by 5000 women who ignored the instructions of the Imam and carried the coffin themselves. Large spontaneous demonstrations of women took place in many cities across the country. Such was the public outcry, among both men and women, all the top political leaders of the country had to individually contact the student’s family and to promise to address the causes that lie behind the incident.

The extreme level of outrage at the murder was because it was not an isolated case but part of an endemic problem in the country. As Yasemin Yücel, from the local Education trade union explained: “Five women are killed daily in Turkey”. She accused the government of encouraging the murder of women by promoting a male-dominant rhetoric.

Sezgin Tanrıkulu, one of the leaders of the main opposition party, pointed out in parliament that since the governing AK Party had been elected in 2002 there had been a 400 percent increase in the incidences of sexual assault and rape of women, and a 1,400 percent increase in the number of women killed.

As if to confirm the widespread extent of the problem, just days after the Mersin murder a 28-year-old woman was stabbed to death by her husband in the South East, while a woman in the north of Turkey was attacked after walking home from her work shirt. Fortunately, with all the publicity about the murder in Mersin she was carrying a knife which she used to fight off her attacker. He was subsequently captured when he presented himself to a local hospital for the knife wounds. Then in the Southern city of Antalya a young woman fought off an attack by a stranger while his friend looked on and laughed and mocked him for being unable to subdue such a lightweight girl.

A Culture That Encourages Violence Against Women
Assaults on women have long been an ingrained problem in Turkey, ranging from domestic violence at one end of the spectrum to rape and murder at the other. In the case of the infamous honour killings where women are killed for daring to choose partners against the wishes of their family, some progress has been made. But too often other cases of violence against women in Turkey have not been pursued properly by the police and / or the perpetrators have been given light sentences by the judiciary.

Moreover, the propaganda and mentality of the current pro-islamic government is making things worse, not better. For example, last November President Erdoğan who totally dominates the government publicly declared that women were not equal to men and has urged a range of retrogressive measures including supporting further restrictions on abortion and urging women to have at least three children.

The problem is not just restricted to government leaders. Their supporters in the media and cultural fields echo the same reactionary prejudices. One prominent columnist from a pro-government newspaper responded to the Mersin killing by writing: “If you, day and night, scream for sexual freedom, individualism, careerism and egoism, this is the end result.”

Meanwhile, the pop singer Nihat Doğan tweeted that “women wearing miniskirts and getting naked don’t have the right to make a fuss when they’re harassed by perverts deprived of morals due to the secular system.”

Such peverse reactions have only fuelled the anger of Turkish women further with an avalanche of social media messages coming from women telling of their own experiences of assault and rape. Traditionally, in Turkey women tended to keep quiet about such experiences so this a major development.

Turkey Not Alone
However, it would be a major mistake to pose this as mainly a problem for “backward” or “islamic” countries like Turkey. As major studies have shown this is a world-wide issue equally affecting the richer and supposedly more “enlightened” countries of North America and Europe. For example, the statistics of sexual assault in America with estimates of a rape every two minutes, have been been added to by recent revelations of the scale of the problem at US universities where one might think more “educated” attitudes would prevail.

In Europe, last year’s survey by the EU of 42,000 women and their experiences of physical, sexual and psychological violence revealed shocking statistics on the widespread nature of the problem with one in three women reporting some form of physical or sexual abuse since the age of 15. As the report demonstrated there “is a picture of extensive abuse that affects many women’s lives but is systematically underreported to the authorities.”
Istanbul Convention collage
Fighting Back
This is not a situation that is inevitable. It can and must be combated. Towards this end, and as a result of determined efforts by feminists who have long sought to end the silence on this problem and to tackle it head on, at the end of last year we saw the ratification by enough European countries of the new Istanbul Convention on Preventing and Combating Violence against Women and Domestic Violence. This Convention is a very radical and progressive charter to fight violence against women (see below) which offers women and all who support their interests the chance to demand major changes in the laws of each European country which are now legally obligated to introduce the measures of the Convention. Just as important we can now demand changes to the procedures and daily practice of all social institutions in order to regularly monitor the problem, effectively combat and punish abuse, and take serious measures to prevent it.

Legal Changes Not Enough
The adoption by nearly 40 countries of such an advanced Convention can only be the beginning. The fact that it was adopted in Istanbul and that the Turkish government was the first to formally adopt it contrasts spectacularly with the violence against women going on in Turkey today and the backward reaction of the same government towards women. As Ms Elda Moreno, the Council of Europe’s former Head of Gender Equality and Human Dignity, acknowledged, the ability of the Istanbul Convention to stop impunity depends greatly “on how governments, parliaments, experts and civil society are going to use it.

In addition to stiffening laws against violence on women, we need to start to change male behaviour at all levels of society starting with the way that boys and young men are encouraged from an early age to exploit girls and women without regard to their feelings or needs. The barrier here is that we don’t democratically control the schools, services, workplaces or media which constantly reinforce reactionary attitudes and behaviour towards women. Without such control we can only go so far in tackling the issues involved. As with so many other problems under capitalism we desperately need to replace this system which is based on capitalist exploitation and division with a democratic socialist society in which women and men can consciously work to overcome these problems and move forward together in solidarity and respect.

System Change Not an Excuse for Inaction
On the other hand, there has been a tendency in the past for some socialists to view attempts to change things within capitalism as reformist, or naïve and pointless. Rather they believe that to overcome sexism all we need to do is overthrow the current system and all problems will be solved in the promised land. In practice, such attitudes becomes a silent excuse for doing nothing on this issue.

Indeed, such a passive view would be tantamount to arguing that we cannot achieve any victories now, that all individual struggles are a waste of time, and that all our energies must be solely devoted towards the revolution and nothing else.

In contrast, we need to fight now to combat violence against women at the same time as striving to replace the capitalist system that in practice encourages it.

The Alternative in Greece

The following was originally published in We share it here for the interest of our readers.

The negotiation strategy of Syriza’s leadership failed. But it’s not too late to avert total defeat.

Let us begin with what should be indisputable: the Eurogroup agreement that the Greek government was dragged into on Friday amounts to a headlong retreat.

The memorandum regime is to be extended, the loan agreement and the totality of debt recognized, “supervision,” another word for troika rule, is to be continued under another name, and there is now little chance Syriza’s program can be implemented.

Such a thorough failure is not, and cannot be, a matter of chance, or the product of an ill-devised tactical maneuver. It represents the defeat of a specific political line that has underlain the government’s current approach.

Friday’s Agreement

In the spirit of the popular mandate for a break with the memorandum regime and liberation from debt, the Greek side entered negotiations rejecting the extension of the current “program,” agreed to by the Samaras government, along with the €7 billion tranche, with the exception of the €1.9 billion return on Greek bonds to which it was entitled.

Not consenting to any supervisory or assessment procedures, it requested a four-month transitional “bridge program,” without austerity measures, to secure liquidity and implement at least part of its program within balanced budgets. It also asked that lenders recognize the non-viability of the debt and the need for an immediate new round of across-the-board negotiations.
But the final agreement amounts to a point-by-point rejection of all these demands. Furthermore, it entails another set of measures aimed at tying the hands of the government and thwarting any measure that might signify a break with memorandum policies.

In the Eurogroup’s Friday statement, the existing program is referred to as an “arrangement,” but this changes absolutely nothing essential. The “extension” that the Greek side is now requesting (under the “Master Financial Assistance Facility Agreement”) is to be enacted “in the framework of the existing arrangement” and aims at “successful completion of the review on the basis of the conditions in the current arrangement.”
It is also clearly stated that
only approval of the conclusion of the review of the extended arrangement by the institutions . . . will allow for any disbursement of the outstanding tranche of the current EFSF programme and the transfer of the 2014 SMP profits [these are the 1.9 billion of profits out of Greek bonds to which Greece is entitled]. Both are again subject to approval by the Eurogroup.
So Greece will be receiving the tranche it had initially refused, but on the condition of sticking to the commitments of its predecessors.

What we have then is a reaffirmation of the typical German stance of imposing — as a precondition for any agreement and any future disbursement of funding — completion of the “assessment” procedure by the tripartite mechanism (whether this is called “troika” or “institutions”) for supervision of every past and future agreement.

Moreover, to make it abundantly clear that the use of the term “institutions” instead of the term “troika” is window-dressing, the text specifically reaffirms the tripartite composition of the supervisory mechanism, emphasizing that the “institutions” include the ECB (“against this background we recall the independence of the European Central Bank”) and the International Monetary Fund (“we also agreed that the IMF would continue to play its role”).

As regards the debt, the text mentions that “the Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and timely.” In other words forget any discussion of “haircuts,” “debt reduction,” let alone “writing off of the greater part of the debt,” as is Syriza’s programmatic commitment.

Any future “debt relief” is possible only on the basis of what was proposed in the November 2012 Eurogroup decision, that is to say a reduction in interest rates and a rescheduling, which as is well-known makes little difference to the burden of servicing debt, affecting only payment of interest that is already very low.

But this is not all, because for repayment of debt the Greek side is now fully accepting the same framework of Eurogroup decisions of November 2012, at the time of the three-party government of Antonis Samaras. It included the following commitments: 4.5% primary surpluses from 2016, accelerated privatizations, and the establishment of a special account for servicing the debt — to which the Greek public sector was to transfer all the income from the privatizations, the primary surpluses, and 30% of any excess surpluses.

It was for this reason too that Friday’s text mentioned not only surpluses but also “financing proceeds.” In any case, the heart of the memorandum heist, namely the accomplishment of outrageous primary surpluses and the selling-off of public property for the exclusive purpose of lining lenders’ pockets, remains intact. The sole hint of relaxation of pressure is a vague assurance that “the institutions will, for the 2015 primary surplus target, take the economic circumstances in 2015 into account.”

But it was not enough that the Europeans should reject all the Greek demands. They had, in every way, to bind the Syriza government hand and foot in order to demonstrate in practice that whatever the electoral result and the political profile of the government that might emerge, no reversal of austerity is feasible within the existing European framework. As European Commission President Jean-Claude Juncker stated, “there can be no democratic choice against the European treaties.”

And the provision for this is to take place in two ways. Firstly, as indicated in the text: “The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions.”

So no dismantling of the memorandum regime either (“rollback of measures”), and no “unilateral changes,” and indeed not only as regards measures with a budgetary cost (such as abolition of taxes, raising of the tax-free threshold, increases in pensions, and “humanitarian” assistance) as had been stated initially, but in a much more wide-ranging sense, including anything that could have a “negative impact” on “economic recovery or financial stability,” always in accordance with the decisive judgment of the “institutions.”

Needless to say this is relevant not only to the reintroduction of a minimum wage and the reestablishment of the labor legislation that has been dismantled these last years, but also to changes in the banking system that might strengthen public control (not a word, of course, about “public property” as outlined in Syriza’s founding declaration).
Moreover, the agreement specifies that
the funds so far available in the Hellenic Financial Stability Fund (HFSF) buffer should be held by European Financial Stability Facility (EFSF), free of third party rights for the duration of the MFFA extension. The funds continue to be available for the duration of the MFFA extension and can only be used for bank recapitalisation and resolution costs. They will only be released on request by the ECB/SSM.
This clause shows how it has not escaped the attention of the Europeans that Syriza’s Thessaloniki program stated that “seed money for the public sector and an intermediary body and seed money for the establishment of special purpose banks, amounting to a total in the order of €3 billion, will be provided through the HFSF’s so-called ‘cushion’ of around €11 billion for the banks.”

In other words, goodbye to any thought of using HFSF funds for growth-oriented objectives. Whatever illusions still existed regarding the possibility of using European funds for purposes outside of the straitjacket of those for which they had been earmarked — and even more that they should be placed under the Greek government’s jurisdiction — have thus been dispelled.

Defeat of the “Good Euro” Strategy

Can the Greek side possibly believe that it has achieved something beyond the impressive verbal inventiveness of the text? Theoretically yes, insofar as there are no longer any explicit references to austerity measures, and the “structural changes” mentioned (administrative reforms and a clampdown on tax evasion) do not pertain to this category, a modification which of course needs cross-checking against the list of measures that can be expected to emerge in the coming days.

But given that the target of the outrageous budgetary surpluses has been retained, along with the totality of the troika machinery of supervision and assessment, any notion of relaxation of austerity appears out of touch with reality. New measures, and of course stabilization of the existing “memorandum acquis” are a one-way street as long as the present regime prevails, is renamed, and is perpetuated.

It is clear from the above that in the course of the “negotiations,” with the revolver of the ECB up against its head and resultant panic in the banks, the Greek positions underwent near-total collapse. This helps to explain the verbal innovations (“institutions” instead of “troika,” “current arrangements” instead of “current program,” “Master Financial Assistance Facility Agreement” instead of “Memorandum,” etc.). Symbolic consolation or further trickery, depending on how you look at it.

The question that emerges, of course, is how we landed in this quandary. How is it possible that, only a few weeks after the historic result of January 25, we have this countermanding of the popular mandate for the overthrow of the memorandum?

The answer is simple: what collapsed in the last two weeks is a specific strategic option that has underlaid the entire approach of SYRIZA, particularly after 2012: the strategy that excluded “unilateral moves” such as suspension of payments and, even more so, exit from the euro, and argued that:
  • On the issue of the debt, a favorable solution for the debtor can be found with the concurrence of the lender, following the model of the London agreements of 1953 for the debts of Germany — ignoring of course the fact that the reasons the Allies behaved generously towards Germany do not in any way apply to the Europeans today vis à vis the Greek debt, and more generally the public debt of the over-indebted states of today’s EU.
  • Overthrow of the memoranda, expulsion of the troika, and a different model of economic policy (in other words implementation of the Thessaloniki program) could be implemented irrespective of the outcome of debt negotiations and, above all, without triggering any real reaction from the Europeans, above and beyond the initial threats, which were dismissed as bluffing. Indeed, half of the funding for the Thessaloniki program was envisaged as coming from European resources. In other words, not only would the Europeans not have reacted, but they would have generously funded the opposite policies they had been imposing for the last five years.
  • Finally, the “good euro” scenario presupposed the existence of allies of some significance at the level of governments and/or institutions (the reference here is not to the support from social movements or other leftist forces). The governments of France and Italy, the German social democrats, and finally, in a veritable frenzy of fantasy, Mario Draghi himself were from time to time invoked as such potential allies.
All of this came crashing down within the space of a few days. On February 4 the ECB announced the suspension of the main source of liquidity to Greek banks. The outflow that had already started rapidly acquired uncontrollable dimensions, while the Greek authorities, fearing that such a reaction would mark the commencement of the Grexit, didn’t take the slightest “unilateral” measure (such as imposition of capital controls).

The words “writing-off” of debt and even “haircut” were rejected in the most categorical manner possible by lenders who became enraged even hearing them (with the result that they were almost immediately withdrawn from circulation). Instead of their overthrow, it turned out that the only “non-negotiable” element was that of keeping the memoranda and supervision by the troika. Not a single country supported the Greek positions, above and beyond some diplomatic courtesies from those who wanted the Greek government to be able, marginally, to save face.

Fearing the Grexit more than it feared its interlocutors, entirely unprepared in the face of the absolutely predictable contingency of bank destabilization (the system’s classical weapon internationally for almost a century when faced by leftist governments), the Greek side was essentially left without any bargaining tools whatsoever. It found itself with its back to the wall and with only bad options at its disposal. Friday’s defeat was inevitable and marks the end of the strategy of “a positive solution inside the euro,” or to be more accurate “a positive solution at all costs inside the euro.”

How to Avert Total Defeat

Rarely has a strategy been confuted so unequivocally and so rapidly. Syriza’s Manolis Glezos was therefore right to speak of “illusion” and, rising to the occasion, apologize to the people for having contributed to cultivating it. Precisely for the same reason, but conversely, and with the assistance of some of the local media, the government has attempted to represent this devastating outcome as a “negotiating success,” confirming that “Europe is an arena for negotiation,” that it is “leaving behind the Troika and the Memoranda” and other similar assertions.

Afraid to do what Glezos has dared to do — i.e. acknowledge the failure of its entire strategy — the leadership is attempting a cover-up, “passing off meat as fish,” to cite the popular Greek saying.
But to present a defeat as a success is perhaps worse than the defeat itself. On the one hand it turns governmental discourse into cant, into a string of clichés and platitudes that is simply summoned up to legitimate any decision retrospectively, turning black into white; and on the other because it prepares the ground, ineluctably, for the next, more definitive, defeats, because it dissolves the criteria by which success can be distinguished from retreat.

To make the point through recourse to a historical precedent well-known to leftists, if the Treaty of Brest-Litovsk, under which Soviet Russia secured peace with Germany, accepting huge territorial losses, had been proclaimed a “victory,” there is no doubt that the October Revolution would have been defeated.

If, therefore, we wish to avert a second, and this time decisive, defeat — which would put an end to the Greek leftist experiment, with incalculable consequences for society and for the Left inside and outside this country — we must look reality in the face and speak the language of honesty. The debate on strategy must finally recommence, without taboos and on the basis of the congress resolutions of Syriza, which for some time now have been turned into innocuous icons.

If Syriza still has a reason for existing as a political subject, a force for the elaboration of emancipatory politics, and for contribution to the struggles of the subordinated classes, it must be a part of this effort to initiate an in-depth analysis of the present situation and the means of overcoming it.

“The truth is revolutionary,” to cite the words of a famous leader who knew what he was talking about. And only the truth is revolutionary, we may now add, with the historical experience we have since acquired.

Wednesday, February 25, 2015

Greece: the next four months

by Michael Roberts

What will happen to Greece’s public finances and economy over the next four months while the Syriza-led government negotiates fiscal and economic conditions with the Eurogroup in return for Troika bailout funds under the existing programme that has now been extended until end-June?

Under the provisional agreement with the Eurogroup, the Greek government will not receive any of the outstanding funds of €7.2bn still available (€1.9bn from ECB profits on its Greek government bond holdings made in 2014 and promised to the previous Greek government; €1.8bn from the Eurogroup’s EFSF and €3.5bn from the IMF) until the Eurogroup is happy with its fiscal plans.
And that could take until end-April. As German finance minister Schaueble made clear: Greece was not getting softer conditions, only more time. “Only when we see they have fulfilled this will any money be paid. Not a single euro will be paid out before that,” he said.

But between this weekend and the end of April, the Greek government is supposed to make repayments on maturing short-term government bills and loans back to the IMF. Greece has to pay back IMF loans of just under €2bn by April and it also has to redeem short-term debt of €4.4bn and €2.4bn in March and April respectively.

Where is the money to come from if the Troika won’t cough up on what it promised until agreement on ‘conditionalities’ with the Greek government? Well, before the election of Syriza, the government was running an annualised surplus before paying interest on its debt of about €1.9bn. And it had built up some cash reserves of about €2bn. So all is well, then?

Well, no. Since the election, taxpayers have stopped paying tax, particularly the most well-off and private companies. Tax receipts have collapsed and were 20% short of target. The government actually ran a deficit in January. The primary surplus achieved in 2014 has already been halved. The available money is disappearing to pay for the upcoming debt redemptions.

Now the €6.8bn of government short-term bills could be paid off by issuing new bills that would be bought by the Greek banks (they are already making good profits on these). However, the ECB is saying that the Greek government is already at its limit of €15bn in T-bill issuance outstanding – this is a limit set by the ECB, by the way. The ECB does not want the Greek government to finance its spending by using the Greek banks, in case the government defaults later.

So it’s getting tight to manage to fund public finances over the next two months, unless the IMF waives its debt repayment to help – unlikely! As Finance Minister Yanis Varoufakis put it: “We will definitely have problems in making debt payments to the IMF now and to the ECB in July,” he told Alpha Radio.

So even before we get to a deal with the Eurogroup on what level of austerity measures the new Greek government is supposed to apply to meet fiscal targets, the possibility of default arises.
The four-month extension on the existing Troika programme has been cast by Prime Minister Tsipras and Varoufakis as the best that could be expected to avoid the ECB cutting off funds to the Greek banks and leading to a run on the banks and financial collapse. Tsipras and Varoufakis have argued with their Syriza MPs and followers that they have really got a good deal, in the sense that they can negotiate with the Eurogroup over the terms and measures that will be applied over the next four months. In other words, they have ‘wriggle room’ or ‘fiscal space’.

But as we can see from the latest revenue and spending figures for the government, even if the Eurogroup agrees to a lower primary surplus target than the 3% of GDP they wanted in the old programme, there may not be any surplus to spend at all if tax revenues are not collected.
Yes, the government aims to focus on getting tax arrears, getting taxes out of the oligarchs; and improving tax collection in general. The government claims it can get up to €7bn with its measures. But it will need it (and must convince the Troika too) because it also wants to stop further pension cuts planned under the existing programme (although it has backed down on increasing pensions and the minimum wage or in increasing public sector employment – or at least the wage bill).

Syriza has apparently agreed not to increase income or corporate taxes and yet this is precisely where the most progressive form of taxation could apply. Instead, Varoufakis appears willing to comply with the IMF’s longstanding demand that concessionary VAT rates charged on Aegean Islands should be raised to the standard level. VAT is the most regressive of all taxes.

As for privatisation, what is not commonly realised is that privatisation revenues were supposed to be used to pay down the debt bill and not used to bolster revenues and the primary surplus. The Syriza leadership has agreed to allow existing privatisations through. So Cosco, the Chinese state shipping company, and Maersk of Denmark, the frontrunners among bidders shortlisted for a two-thirds stake in Piraeus Port Authority, will take over. And a consortium led by Frankfurt airport is the preferred bidder for a 40-year(!) concession to run Greece’s regional airports.

Inviting in foreign investment to improve important state assets should not be shunned, in my opinion. After all, that is what the Chinese government does all the time. But they maintain a majority ownership and control the projects. Greece could do the same. Instead, foreign companies will get key sectors of the Greek economy over the next four months. At least, Panagiotis Lafazanis, the energy minister, will apparently stop the sale of the electricity grid and part of the state power utility.
Negotiations on the details of the four-month extension will be tortuous and it is an opportunity for the Syriza government to campaign openly within Europe against austerity measures that the Eurogroup wants to impose and also it gives Syriza time to mobilise the Greek people for the battle ahead.

As PM Tsipras said (wrongly), “we won (actually lost) the first battle and but the war continues”. Austerity must be reversed. Since 2009, successive Greek governments under the direction of the Troika have carried out huge public spending cuts worth 30% of GDP.  The public sector wage bill has been reduced by 29%, and now the government has agreed not to increase it. Social benefits have been cut 27% and again the government has agreed not raise this bill.

But Greek public finances at present do not allow for any fiscal space at all, even if the Eurogroup agrees to a lower fiscal target. Tax revenues must come in to meet upcoming debt repayments AND allow for dealing with the humanitarian crisis, boosting employment and wages. Can it be done?
And then what happens after four months? The Greek government and its people must reject any further Troika programme and its conditions (assuming it is offered). They must strike out on their own to control the economy.

That means taking over the banks and the major companies, introducing a plan of investment and growth that mobilises people to support and implement. If that brings the government into a final conflict with other Eurozone governments and the ECB and they threaten to cut off funds and throw Greece out of the Eurozone, so be it.

But there are four months available for the government to campaign within Greece and around Europe for the alternative to the neoliberal economic model and its policies. (see my post,
See my facebook site