John Kenneth Galbraith's "Age of Uncertainty: The Fatal Competition", the Cold War

Continuing with John Kenneth Galbraith's 1977 documentary series, The Age of Uncertainty, Episode 8, The Fatal Competition, this one dealing with the Cold War:

Galbraith himself was in Germany in the days following the end of the Second World War in Europe. In the companion volume, he says the following about that period:

Soldiers, businessmen, civil servants, diplomats, assorted idlers and black marketeers were gathered in the city [Berlin] for the tasks of the occupation. By 1946, two parties were taking form: one party wanted very much to get along with the Russians. They - I should say we, for I was among them - saw little hope for a world in which there was conflict between the two powers. [I.e., if there were conflict between the US and the USSR, there would be little hope for the world.] There were things to encourage us. When we met socially with the Russians, we learned how grim had been their experience with war, how passionate was their fear of another. Some of our senior army people were similarly moved. They had experienced war and wanted no more of it. We had as symbolic allies our enlisted men. They were meeting regularly with their Russian counterparts for the sale and exchange of merchandise; the market was in the shadow of the Brandenburg Gate which stands between East and West Berlin. Thus they showed that trade was above ideology, that when the armed representatives of capitalism met the armed might of Communism, the natural tendency was not to fight but to do a little business.

There was a second party. It regarded our hopes as ridiculously soft-headed. (There is an interesting point here: political wisdom is thought always to lie with the hard, impervious head and the tough, unyielding mind. One wonders why.) Some members of this group were only concerned to show how tough and hence how intelligent they were. But some, the Foreign Service Officers especially, spoke out of a genuine knowledge of Stalin and the great purges and a genuine concern for his intentions. Also the Soviet activities in Eastern Europe left no room for doubt. It was easy to assume that these would be the same in Western Europe as well.

Present too were the pathologically belligerent, those who even more than the poor are always with us. And there were a few for whom the war had been an exciting thing, a blessed ·escape from dull jobs, dull wives, deadly routine. Better another war than going back to Toledo, Ohio, or Nashua, New Hampshire. [my emphasis]

And, he observes, "On occasion, the debate became rather intense."

Galbraith was not adverse to noting the existence and influence of what President Eisenhower famously called the military-industrial complex:

The Air Force, in particular, had expanded wonderfully in power, prestige, men and airplanes [during the Second World War]. And a whole new industry had come into existence to provide the equipment and technology and share the gains. There followed a very simple, very practical point, far too obvious to be ignored. If there were a continuing menace, these gains would be continued. If not, they would be lost. The Soviets, not the French, not the British, not the Germans, were obvious candidates to be the new menace.

No one - certainly not many - argued that the gains of war should be preserved by the invention of a new menace . This is not the kind of thing that is said openly; the world has little to fear from forthrightly cynical men. Not many admitted this motivation even to themselves. Personal interest always wears the disguise of public purpose, and no one is more easily persuaded of the validity or righteousness of a public cause than the person who stands personally to gain therefrom . Those who perceive the underlying role of self-interest often hesitate to cite it. Nothing so interrupts the flow of polite conversation and so badly repays an invitation to drink and dine. [my emphasis]

Tags: age of uncertainty, cold war, john kenneth galbraith

John Kenneth Galbraith's "The Age of Uncertainty:"

Continuing with John Kenneth Galbraith's 1977 documentary series, The Age of Uncertainty, Episode 7, The Mandarin Revolution, which deals with the Great Depression and John Maynard Keynes:

Brad DeLong has made available a class lecture of his of 09/29/2009, John Maynard Keynes:

For the litterati [sic] it is Keynes of Bloomsbury—his loves, enthusiasms, acts of patronage, and wit—who is the most interesting. For economists like myself, it is Keynes the academic who is the real Keynes: he was the founder of the half-science half-witchcraft discipline of macroeconomics. For those interested in the political and economic history of the twentieth century, it is Keynes the author and politician who is primary. In either case, John Maynard Keynes is the man who has the best claim to be the architect of our modern world—whether it is how our central banks think about economic policy, what our governments believe that they must try to do, the institutions through which they work, or the habit of thought that views the economy not as Adam Smith's "system of natural liberty" but as a complicated machine that needs adjustment and governance by trained professional technocrats, all of these trace large parts of their roots to the words and deeds of John Maynard Keynes.

Galbraith relates some of the havoc caused by the gold standard in the 1920s. When Winston Churchill became Chancellor of the Exchequer, he convinced Parliament that Britain should go back on the gold standard. Keynes warned that there would be unpleasant consequences. But, as Galbraith explains in the companion volume:

Why the mistake? To go back to the old rate of exchange of pounds for gold and dollars was to show that British financial management was again as solid, as reliable, as in the nineteenth century. It proved that the war had changed nothing. It was a thought to which Winston Churchill, historian and professional custodian of the British past, was highly susceptible. Also, bnly a few people partic;ipate in such decisions, and the instinct is strongly conformist. The man of greatest public prestige states his position at a meeting; the others hasten to praise his wisdom. Those who have a reputation for dissent, like Keynes, are not invited . They a re not responsible, serious, effective. It follows that financial decisions, like those on foreign policy, are carefully orchestrated to protect error.

Galbraith in 1977 already knew what Paul Krugman learned more recently through his own experience as a pundit and economist who was saying things the Very Serious People didn't want to hear: that it's generally better for one's reputation to be conventionally wrong than to be unconventionally right. And Keynes was right in that instance. Galbraith:

Asthe mines of the Ruhr came back into production after 1924, world prices of coal fell. To meet this competition with the more expensive pound, the British coal-owners proposed a three-point program: longer hours in the pits, abolition of the minimum wage, lower wages for all. (Let Enoch Powell, Ronald Reagan and Milton Friedman take comfort; there was a day when such actions could be urged. Who knows, maybe their sun will shine again.) A Royal Commission agreed that the lower wage was necessary. The miners refused; the owners then locked them out. On the fourth of May, 1926, the transport, printing, iron and steel, electricity and gas and most of the building-trades unions came out in support of the miners. This, with some slight exaggeration, was called the General Strike. For quite a few workers it didn't make too much difference; they were already on the dole, for unemployment, the other remedy, was by then well advanced. In these years unemployment ranged between ten and twelve percent of the British labor force.

The General Strike lasted only nine days. Those who had most ardently applauded the return to gold were the first to see the strike as a threat to constitutional government, a manifestation of anarchy. Churchill took an especially principled stand. The miners remained on strike through most of 1926 but were eventually defeated. Keynes's judgment was redeemed but he was not forgiven. It had happened again: when the men of great reputation are wrong, it is the worst of personal tactics to be right. [my emphasis]

And, of course, the sun of austerity, of austericide economics, is shining once again in the current North Atlantic depression. And Galbraith relates that the historical predecessor of the austerity obsession of German Chancellor Angela "Frau Fritz" Merkel, Heinrich Brüning, was one of "the most devoted exponents of" austericide during the Great Depression:

Bruning's remedial action in 1931 was especially memorable. Wages were cut; prices were cut; salaries were cut; taxes were raised. All this was done at a time when around a quarter of all German industrial workers were unemployed. Not many have wanted to ask the question .which some millions of German workers did ask themselves. If this is democracy, can Hitler be worse? Andrew Mellon, Hoover's Secretary of the Treasury, had a similar proposal: "Liquidate labor, liquidate stocks, liquidate the farmers ..." After Mellon was finished, there would, it is true, be no way left but up.

In 1977, it was still widely assumed that not even conservatives would be so foolish as to again embrace such a view in a depression. But today we have conservatives like Frau Fritz and David Cameron, the French Socialist François Hollande and the American Democrat Barack Obama all following the same Herbert Hoover/Heinrich Brüning austerity policies. It didn't work out happily then, and it's not working out very well now. We can still hope the consequences for democratic governance won't be as drastic in our time as back then.

Galbraith also relates something of his biographical relationship to Keynes' ideas. Keynes' work offered the possibility of meaningful reform to mitigate the effects of depression in a major way without revolutionary change:

It was the young who were captured. Economists are economical, among other things, of ideas. It is still so. They make those they acquire as graduate students do for a lifetime. Change in economics comes only with the changing generations. The great economists of that day read and reviewed Keynes and uniformly found him wrong.

But so influential was Keynes among the young at Harvard that in later years an association of alumni was formed to combat his influence. They threatened to cease financial support to the university unless his ideas were repressed or expunged, although it is not clear that many had given much before. Conservatives regularly extend their faith to the management of their personal resources. I was singled out for attack as the Crown Prince of "Keynesism." I was greatly pleased and hoped that my friends would be properly resentful.

That was Keynes. You came to him out of conservatism, your desire for peaceful change. And by urging his ideas you won a reputation for being a radical.

That part is not so different today, either. As Arlo Guthrie once put it, "Some things change, you know. Some things don't."

Tags: age of uncertainty, john kenneth galbraith, keynes

Angie and Spain

German Chancellor Angela "Frau Fritz" Merkel isn't happy with her Spanish subjects. (Griselda Pastor, Alemania pasa a la defensiva Cadena SER 15.05.2013)

Spain's banks are still shaky, i.e., under-capitalized. Frau Fritz' government is complaining that Spain didn't take enough EU money. Under Angienomics, the aid to the banks would become a debt obligation of the Spanish government. But for Frau Fritz, that would be a good result. Because it would give her even more leverage to accelerate the neoliberal "reforms" (lower wages, deregulation, privatization, etc.) that both the current Spanish government and its Socialist predecessor have been implementing already.

One of the neoliberal "reforms" they are pushing on Spain comes from EU Commissar for Labor László Ándor. It's something they haven!t even pushed onto Greece, Ireland or Portugal yet, something called the "unified work contract" (contrato único). Like other neoliberal schemes, it's basically a way of reducing workers' rights, income and job stability and weakening unions. It's such an obnoxious idea that even Mariano Rajoy's conservative, austerity-committed government is willing to embrace. (Ana Bravo Cuiñas, ¿Contrato único? El Gobierno se decanta por la contratación simplificada El Mundo 19.05.2013)

But Rjoy's Partido Popular (PP) have taken it seriously in the recent past. (Mercedes Serraller, El PP propone un contrato único y flexible 'anticrisis' Expansión 19.07.2011) As Cuiñas points out, one element of the contrato único proposal has similarities to a workers' capitalization fund arrangement currently used by Austria, Denmark and the Netherlands. But László Ándor's proposal taken literally "tendría equivalente en ningún otro país del mundo" ("would have no equivalent in any other country of the world"). And for workers, that would be not in a good way.

The eurozone has turned into a laboratory for how far neoliberal, anti-labor "reforms" can be enacted without setting aside parliamentary government.

Tags: angela merkel, austerity economics, eu, euro, european union, spain

John Kenneth Galbraith's "The Age of Uncertainty: The Rise and Fall of Money"

Continuing with the posts featuring John Kenneth Galbraith's 1977 documentary and book, The Age of Uncertainty, Episode 6 The Rise and Fall of Money:

Here Galbraith gives us a brief history of money. In the companion volume, he devotes a section to Andrew Jackson's successful fight with the Bank of the United States, the chief institution of the Money Power, i.e., concentrated wealth:

[Bank of the US President Nicholas] Biddle lacked the tact that the rich and successful have since developed greatly and which has perhaps become second nature. On public occasions he compared his power as President of the Second Bank of the United States with that of the President of the United States. When asked by a Senate committee if he had ever abused his financial power, he praised his own restraint. Although very few of the small banks "might not have been destroyed" by his discipline, "none has ever been injured." This allowed Jackson to thunder back: "The President of the Bank has told us that most of the State banks exist by its forbearance."

The historic showdown came in 1832. Early that year the friends of the Bank in Congress led by Henry Clay - Clay was also from the frontier but the forces of civilization had worked their way - renewed the charter of the Bank. Jackson responded with a stinging veto. The presidential election was then fought on the issue. Biddle had the money, and he had been generous with loans to congressmen, senators and the press. ... Andrew Jackson had the votes. He won, and the Second Bank of the United States was defeated. Biddle then got it a Pennsylvania charter but power is often a onetime thing. Very soon he went broke. The smaller local banks were to remain free from serious restraint in many of the states for a century. [my emphasis]

Tags: age of uncertainty, john kenneth galbraith

Merkel's wreckage

EU economic news looks more and more like a collection of the political, economic and human wreckage being left in the wake of German Chancellor Angela "Frau Fritz" Merkel's austerity policies.

French President François Hollande was elected by a majority a year ago on an anti-austerity policy. Then he promptly embraced Frau Fritz and her austerity policies. Now the French economy is doing poorly and his popularity is sinking at a rate that should put him within a margin of error to zero by the end of this year. Hollande is attempting to stop the slide, as Mark John and Ingrid Melander report in France's Hollande urges euro zone government Reuters 05/16/2013. Presumably he was looking for dramatic headlines like that. How much his talk now actually means is doubtful:

At a 150-minute news conference marking his first year in office, a day after economic data showed France had slipped into recession, the Socialist leader defended his record on economic reform and budget discipline and told the French people they would have to work "a bit longer" for a full pension in future.

Rebutting criticism that France has lost its leadership role in Europe because of its dwindling economic competitiveness, Hollande said he wanted to create a fully-fledged political European Union within two years.

"It is my responsibility as the leader of a founder member of the European Union... to pull Europe out of this torpor that has gripped it, and to reduce people's disenchantment with it," Hollande said.

"If Europe stays in the state it is now, it could be the end of the project [i.e., the EU]."

He acknowledged he could face resistance from Germany, Europe's dominant power, which opposes mutualising debt among member states. Berlin is also reluctant to give the euro zone its own secretariat for fear of deepening division in the EU, between the 17 members of the single currency and the 10 others. [my emphasis]

His statement that he remains committed to raising the retirement age is a signal that he's still on board with the neoliberal program of deregulation, weakening of unions, lowering of workers' wages and retirement income, and cutting back public services. As Reuters summariyes, he also called for "an economic government for the euro zone with its own budget, the right to borrow, a harmonized tax system and a full-time president." By the "right to borrow," he means eurobonds. That's a good idea, but Frau Fritz his opposed to it and is trying to keep the banking union, agreed upon in principle, to a bare minimum.

Germany is "Europe's dominant power." And under Frau Fritz, it's pursuing an aggressively nationalistic policy using the EU very effectively as a club to bash its fellow European partners. With confronting that and effectively countering it, Hollande's proposals are little more than hot air and transient talking points. If he were going to confront Frau Fritz that way, the time to do it was a year ago when he had a fresh mandate to do so and his popularity at home was high. But he capitulated completely, and Frau Fritz now has his number.

And sure enough, Angie says, "Nein!" (Luke Baker, Brussels, Berlin lukewarm on Hollande's euro zone vision Reuters 05/17/2013). In diplomacy-speak, of course, "no" typically is expressed with something like, "sure, we'll think about it, until Hell freezes over or so." Baker:

... it does not appear that Hollande has much backing from Berlin for his vision, which includes the ambition of forging a full "political union" within two years.

Chancellor Angela Merkel's spokesman told a news conference that Hollande's proposal was "interesting and worth considering" but was essentially something the chancellor had been discussing with Sarkozy since 2011.

"It has been part of German thinking for a while anyway, and we have been working closely with France on it," Steffen Seibert told reporters.

On the specific idea of creating a separate budget for the euro zone, the German economy ministry urged caution, pointing out that it could limit the rights of the German parliament, something guaranteed to make it unacceptable to Berlin.

"I think we should exercise caution on this," said a spokesman.

Officials in Brussels, speaking on condition of anonymity because they did not want to be seen to be meddling in Franco-German relations, said they had no indications Merkel was suddenly more open to France's ideas than before.

The new Prime Minister of Italy, Enrico Letta, whose government is likely to be short-lived in any case, is taking a similar position of superficially complaining about the extremes of austerity but essentially knuckling under to Frau Fritz' Diktat. (Ulrike Sauer, Regierungskoalition: Wie zwei Erzfeinde Italien retten wollen Süddeutsche Zeitung 18.05.2013) He was selected Prime Minister after difficult negotiations following this year's election. The leading vote-getting party was the social-democratic PD (Democratic Party) and it agreed with Silvio Berlusconi's rightwing party to form the government. The PD is basically all-in with the Merkel austericide program, Berlusconi and his party were more critical. But without a government composed of parties not only critical of austerity but willing to oppose it up to and included bailing out of the euro, they won't be able to do much about it.

A big part of the problem with Frau Fritz is the willing collapse of the SPD as any kind of opposition to the neoliberal austerity policies, a criticism that applies to the Greens, as well. They're on board with the basic lines of Frau Fritz' brutal eurozone economic policies. One might think the Left Party would be making maximum use of the chance to position itself as potentially a much larger party. And they have been critical of austerity policies, including some of the Agenda 2010 policies introduced by the red-green government under Gerhard Schröder and Joschka Fischer that resulted in lower wages and less job stability. But even the Left Party hasn't pressed any more fundamental criticisms of the current EU structure and it dangers for Germany, even though those dangers aren't so obvious to many German voters at the moment.

The SPD even tolerates a not-insignificant amount of anti-immigrant demagoguery. Thilo Sarrazin, a one-time big wheel in the SPD, drew criticism a few years ago when he published a book echoing the stock superficial culture-war style criticisms of non-white and southern European immigrants that are common as dirt on the far right. The SPD did distance themselves from him. But just today, the Oberösstereicische Nachrichten published and interview with the anti-immigrant SPD mayor of the Berlin district of Neukölln, Heinz Buschkowsky, „Political correctness ist ein Alibi für das Nichtstun“ 22.05.2013. (Berlin has Bezirksbürgermeisters {District Mayors} for various districts and an Oberbürgermeister {High Mayor} for the entire city.)

His district has a large percentage of migrants and children of migrants. But Buschkowsky isn't exactly a tribune for their interests. In a crack that would sound routine at a Tea Party or NRA event, though with "white" instead of "German" in the American context, he says, "Einen deutschen Vater, der nicht will, dass seine Tochter einen türkischstämmigen Mann heiratet, beschimpft man als Rassisten. Bei einem türkischen Vater, der nicht will, dass seine Tochter einen deutschen Mann heiratet, heißt es, das sei Teil seiner Religiosität." ("A German father who doesn't want his daughter to marry a man of Turkish dissent, people call him racist. With a Turkish father who doesn't want his daughter to marry a German man, they say it's part of his religiosity.") A painfully obvious version of "Would you want your daughter to marry one?" And the "they" who say these things of which Buschkowsky disapproves are the advocates of "political correctness," a phrase he uses in the same sense Rush Limbaugh does to refer in a negative to those who dispprove of racism and xenophobia.

Why rightwingers love these double-reverse phrases is still something of a mystery to me. When a Limbaugh or a Buschkowsky uses "political correctness," they mean something they find politically incorrect. For them being "politically incorrect" is politically correct. It gives me a headache. And while I'm ranting, one would think a guy with a Slavic-sounding name like "Buschkowsky" might be hesitant to beat his chest in public about what a fine German white guy he is. But apparently one would be wrong.

It wasn't so long ago that it was generally assumed in Europe and the US that among the problems economic depressions brought on were political fractures, racism and xenophobia. But Frau Fritz' brand of Ordoliberalism isn't much concerned about such things, it seems.

Tags: angela merkel, austerity economics, eu, euro, european union, france, françois hollande, italy

John Kenneth Galbraith's "Age of Uncertainty: Lenin and The Great Ungluing"

Today's episode of John Kenneth Galbraith's 1977 The Age of Uncertainty is Episode 5 Lenin and The Great Ungluing, which deals with the First World War and its aftermath:

Galbraith in the companion book notes, "No subject known to history, not even the reasons for the long decline of Rome (the more interesting question is how it lasted so long), has been so much debated as the causes of World War I."

But that doesn't stop him from offering his own observations. This is an important one. He takes issue with Marxist theories of imperialism that held capitalism to be especially prone to generating wars, and the First World War more specifically:

The better explanation lies in the traditional territorial attitudes of predominantly rural societies. Their governments, at least in that time, were dangerously belligerent - more so, Marx notwithstanding, than those of the capitalist world.

Ever since the beginning of historical experience, land and men had been the basis of both wealth and military power; the two went together. The wealth of a prince had always been in proportion to the extent and quality of the land be controlled. For varying with the extent and quality of the land were the number, and perhaps also the quality, of the peasantry it supported and therewith of the soldiers he could muster. Thus his military power. Thus the territorial imperative, the belief that nothing should stand in the way of acquisition or defense of territory.

In 1914, the belief in land and men- this territorial imperative - was part of the deepest instinct of the old ruling houses. It was a factor as between France and Germany. Had Germany won, something more of France would have been added to Alsace and Lorraine. Between the Hapsburgs and the Romanovs, and in the Balkans, it was mortal. It was for this reason that the rulers eyed each other with suspicion; each believed that his neighbor wanted the territory that was decisive for wealth and power. [my emphasis]

He also spends some time to discuss Lenin's leadership, including the following:

Marx, no one could doubt, was a revolutionary; the free-flowing beard, piercing eye, exceptionally untidy appearance were all in keeping. It may, indeed, be Marx who has given us our mental image of how a revolutionary should look. Far more than Marx, Lenin was a revolutionary. Marx wrote; Lenin led . He remains the revolutionary colossus who stands astride a whole age, the point of reference still for the long, slowly moving lines beside the Kremlin Wall. With his high for ehead greatly accented by the bald dome above, his neat mustache, dark, quiet suit and something very near a VanDyck beard, he looked like the head of a firm of chartered accountants. Leon Trotsky, with his fi erce and glittering eye and much less disciplined beard, was a man of far more satisfactory aspect.

Once quite a few years ago a Soviet historian visited Harvard. He was an old man and had served in Budenny's cavalry during the Revolution. He had known Lenin well and told with amused pride that Lenin had once paid him a high compliment; he was, Lenin had said, the world's only known case of a cavalryman with brains. I asked him the source of Lenin's leadership - a man so tidy, looking so much like a clerk. He replied: "When Lenin spoke, we marched."

Galbraith also relates this anecdote, which he presents as like apocryphal, talking about the time Lenin spent at the library in the British Museum while in exile: "Years later [after the Boshevik Revolution], according to legend, it occurred to someone to ask one of the library attendants if he remembered Lenin. He did, a most diligent little man. The librarian wondered whatever had become of him."

He also discusses the vexatious issue of the adjustments made by capitalist countries in their method of rule after the First World War:

In the West the war ended, Germany was defeated but the glue seemed to hold. In Germany Friedrich Ebert, a Social Democrat, became President. Rosa Luxembourg and Karl Liebknecht led a militant minority whose view of revolution was as Lenin's. But the moderate opposition in Germany, the counterpart of the Mensheviks, was far stronger than in Russia. Gustav Noske, a Social Democrat, became Minister of Defense and put down their revolt. Luxembourg and Liebknecht were both killed by anti-Communists. But in the Western countries too, the United States partly excepted , there was a quiet revolution, one that deserves the name.

In all European countries the old coalition of capitalists and traditional rulers [aristocratic landowners, more or less] was at an end. There would still be a ruling coalition; it would be of business interests, large and small, and the trade unions and their parties. Sometimes these joined in power. More often they traded it back and forth, increasingly sharing it with yet other groups. So it was in Britain, France and the British Dominions. And so, with the passage of time, it would be in the United States. It was a prospect that Marx did not foresee.

Tags: age of uncertainty, colonialism, john kenneth galbraith, lenin, world war i

John Kenneth Galbaith's "Age of Uncertainty: The Colonial Idea"

Today's episode of John Kenneth Galbraith's 1977 The Age of Uncertainty is Episode 4 The Colonial Idea:

Galbraith makes this comment on the state of the colonial enterprise, broadly conceived, in the companion volume:

Does the colonial experience belong forever to history? The United States has badly burned fingers; the effort to govern indirectly and shape political development in distant lands will henceforth surely be viewed with caution. And it is not only the United States that has had this pain. The Soviet Union, in the years following World War II, sought to extend its influence in Yugoslavia, China, Egypt, Indonesia and Ghana. Contemplating the results, it can hardly feel pleased. When Ben Bella, a Soviet acolyte, was deposed in Algeria, a Russian newspaper correspondent said to me rather sadly, "They used our tanks. Well, at least they didn't use our advisers." The Chinese, in their turn, became the bitter enemies of the Russians. Once again "The Blame of those ye better." One hopes that there is now a volume of Kipling in the Kremlin.

Tags: age of uncertainty, colonialism, john kenneth galbraith

Andrew Bacevich takes a skeptical look at our glorious generals and their organizational culture

Andrew Bacevich has been doing great work for years on the US military. But since his analyses generally fall outside the lazy assumptions of the Very Serious People, you don't see him on the TV gab-fests where such VSPs as David Brooks and Tom Friedman hold forth.

In 'Good Guys' Make Bad Generals The American Conservative 05/13/2013 (May/June 2013 issue), he uses a review of Thomas Ricks' new book to look at the real outcomes of the current organizational culture in the senior military ranks:

To become a general officer is to join an exclusive club. As with many clubs, ranking members decide whom to admit, restricting entry to those who satisfy the criteria for being the right sort. In American military vernacular, Ricks writes, the key is to be deemed a “good guy.” The good guy projects the right attitude, strikes the right pose, and recites all the right clichés. Good guys are team players. They don’t rock the boat. They get ahead by going along. In practical terms, demonstrated adherence to orthodoxy becomes the premier qualification for admission. Heretics need not apply.

And according to Ricks, once you’re in, you’re golden: with membership come privileges and protection. So when events expose the limitations of a William Westmoreland in Vietnam or a Tommy Franks in Iraq, other senior officers cognizant of those shortcomings keep mum. Sergeants or captains falling short in the performance of duty might feel the axe; not so with the generals said to be responsible for what the sergeants and captains do or don’t do. General officer responsibility turns out to be more nominal than real. Reflecting on the Iraq War, one disenchanted American officer put it this way: “As matters stand now, a private who loses a rifle suffers far greater consequences than a general who loses a war.” Needless to say, that officer’s invitation to join the club never arrived. [my emphasis]

Bacevich discusses the dubious accomplishments of Gen. William DePuy, who he credits with developing the infamou "search-and-destroy" strategy in the Vietnam War. He also credit DePuy with successfully convincing the senior officer corps to not learn the most meaningful lessons of that war:

Yet the abject failure of that concept in Vietnam—a failure above all of creative intelligence—prompted little soul-searching on DePuy’s part. Nothing that had occurred there altered his pre-existing conception of warfare. Stripped to its essentials, that conception reduced combat to a series of discrete, measurable tasks. In DePuy’s eyes, to master tasks was to master war itself. Paying lip service to war’s human dimension, disdaining its political aspect altogether, DePuy’s approach—which became the Army's approach—pretended to a sort of pseudo-empiricism, as if war were akin to a large-scale industrial enterprise.

Demanding compliance with prescribed formulas, checklists, and decision matrices, DePuy’s Army had little use for critical thinking or independent judgment. This was the Army that in 1991 fought Saddam Hussein and then in 2003 came back for a second go—an Army led by “good guys” who had mastered minor tactics but were intellectually complacent, strategically illiterate, and wore their antipathy for politics like a badge of honor.

Bacevich quotes an important observation by Ricks on the developing generals' culture in the Vietnam War era: "The Army, writes Ricks, 'was fast becoming a collection of 'organization men' ... who were far less inclined to judge the performance of their peers.' Generals 'were acting less like stewards of their profession, answerable to the public, and more like keepers of a closed guild.'"

And for all the secular and religious idolatry that US political culture currently practices toward the military and its allegedly glorious leaders, the results are not especially impressive:

In terms of providing its army with bountiful resources, no nation comes even close to the United States. In terms of willingness to commit that army into action, no nation (except perhaps Israel and the United Kingdom) compares. Yet the roster of victories achieved by the United States Army since 1945 is an abbreviated one: the Dominican Republic (1965), Grenada (1983), and Panama (1989). Twenty years ago, observers might have added the Persian Gulf War (1991) to that list. Unfortunately, the brief and seemingly glorious encounter that was Operation Desert Storm turned out to be a mere preliminary bout.

Forays ending in something other than victory—i.e., conclusive operational success yielding desired political outcomes—have been both more numerous and of greater moment. The Cold War provided the occasion for one costly draw (Korea) and one humiliating defeat (Vietnam). The post-Cold War era has included one outright failure, the embarrassing if quickly mythologized Somalia intervention, along with two wars of middling size, long duration, and ambiguous outcome. Whatever verdict historians ultimately render regarding Iraq and Afghanistan, they are unlikely to classify them as roaring successes.

But in a climate of cultural militarism with a foreign policy of global hegemony, such questions are too infrequently considered. The Very Serious People are too focused on the next war to cheer for.

Tags: andrew bacevich, militarism

John Kenneth Galbraith's "The Age of Uncertainty: Karl Marx The Massive Dissent"

Today we have Episode three of John Kenneth Galbraith's 1977 The Age of Uncertainty, Karl Marx The Massive Dissent.

I previously used this video in "Karl Marx" in 2013 04/10/2013.

The liberal philosopher John Gray recently did an essay on Marx in The Real Karl Marx New York Review of Books 60:8(05/09/2013 edition), a review of Jonathan Sperber's Karl Marx: A Nineteenth-Century Life (2013). This is an intriguing observation of Gray's:

Marx's admiration for Darwin is well known. A common legend has it that Marx offered to dedicate Capital to Darwin. Sperber describes this as “a myth that has been repeatedly refuted but seems virtually ineradicable,” since it was Edward Aveling, the lover of Marx’s daughter Eleanor, who unsuccessfully approached Darwin for permission to dedicate a popular volume he had written on evolution. But there can be no doubt that Marx welcomed Darwin’s work, seeing it (as Sperber puts it) as "another intellectual blow struck in favor of materialism and atheism."

Less well known are Marx’s deep differences with Darwin. If Marx viewed Trémaux’s work as "a very important improvement on Darwin," it was because "progress, which in Darwin is purely accidental, is here necessary on the basis of the periods of development of the body of the earth." Virtually every follower of Darwin at the time believed he had given a scientific demonstration of progress in nature; but though Darwin himself sometimes wavered on the point, that was never his fundamental view. Darwin’s theory of natural selection says nothing about any kind of betterment—as Darwin once noted, when judged from their own standpoint bees are an improvement on human beings—and it is testimony to Marx’s penetrating intelligence that, unlike the great majority of those who promoted the idea of evolution, he understood this absence of the idea of progress in Darwinism. Yet he was just as emotionally incapable as they were of accepting the contingent world that Darwin had uncovered.

Galbraith in the companion volume has an interesting anecdote relating to Hegel, one of the major influences on Marx - or rather to Hegel's reputation:

The romantic years were now at an end; the years of Hegel began. Not only was Berlin a far more serious place than Bonn but Marx was now surrounded by the disciples of Georg Wilhelm Friedrich Hegel. These young men, the young Hegelians, took themselves and their scholarly mission very seriously indeed. Recurrently in history intellectuals have been so impressed with their unique vision of truth that they have seen themselves fated to change how all men think. This was one of those moments.

What is not so easy to describe is the change the young intellectuals sought. Hegel is not a very accessible figure for the Anglo-Saxon or American mind; certainly I have never found him so. Once, years ago, I was greatly comforted by a story told me by Arthur Goodhart, the Oxford law professor and onetime Master of University College. It concerned a night in 1940 when, as a member of the Home Guard, he was deployed with a fellow professor, a distinguished philosopher at the university, to guard a small private airstrip near Oxford.

They may well have been the two most improbable soldiers in the annals of British military history. But they marched back and forth in a light mist, one with a rifle of Crimean vintage more or less, the other with a fowling piece. Occasionally, being professors, they stopped to converse. Toward dawn, during one of these pauses, Goodhart's fellow soldier lit his pipe and said, "I say, Arthur, do you suppose those wretched fellows aren't coming? I did so want a shot at them. I've always detested Hegel."

Tags: age of uncertainty, john kenneth galbraith, karl marx

John Kenneth Galbraith's "The Age of Uncertainty: The Manners and Morals of High Capitalism"

Continuing with the post featuring John Kenneth Galbraith's 1977 documentary and book, The Age of Uncertainty, Episode 2, The Manners and Morals of High Capitalism:

In this episode, Galbraith brings his not inconsiderable wit and critical capacity to the Gilded Age and the robber barons who ruled it. He also deals with the closely related doctrine of Social Darwinism.

In the book, Galbraith says this about the Social Darwinist doctrine:

No one at this happy gathering seems to have worried about a small but obvious point, which is how the Social Darwinists would bridge the generation gap. In those years John D. Rockefeller had himself formulated the doctrine for a Sunday school class in an exceptionally engaging way: "The American Beauty rose," he had explained to the young,"can be produced in the splendor and fragrance which bring cheer to its beholder only by sacrificing the early buds which grow up around it." The same sacrifices occurred in business and accounted, pro tanto, for the splendor of a Rockefeller. "This is not an evil tendency in business. It is merely the working-out of a law of nature and a law of God." The question, of course, was whether this same law of nature and of God would also explain the purely inherited splendor of John D., Jr. , or yet later of John D. III, Nelson, Laurance, Winthrop and David. Surely, on the contrary, a Rockefeller inheritance, even more than a handout to the poor, would cool the struggle to survive, devastate the moral and physical tone of the legatees and justify a confiscatory inheritance tax that would save their efforts for society. A nasty problem.

No one should imagine that Spencer and Sumner are relics purely of the past. They still restrain the hand of the well-to-do individual when he is approached by a beggar. Perhaps it will damage the man's morale. Their doctrines still lurk in the inner cells of the Rockefeller consciousness. Or maybe only in those of their speech writers. Speaking in Dallas on September 12, 1975, to a convocation of committed conservatives, Vice President Nelson Rockefeller warned against the continuing dangers of compassion:

One of the problems in this country is that we have this Judeo-Christian heritage of wanting to help those in need. And this, when added to some political instincts, sometimes causes people to promise more than they can deliver. [my emphasis]

Notice that the latter quote is from Nelson Rockefeller in 1975; and Rockefeller was the archetypal liberal Republican.

Galbraith sardonic description of the minister Henry Ward Beecher is priceless:

His reconciliation involved a distinction between theology and religion. Theology, like the animal kingdom, was evolutionary. Such change did not contradict the Holy Writ. Religion was enduring. Its truths did not change. Darwin and Spencer belonged to theology; the Bible was religion. So there was no conflict between natural selection and the Holy Scripture. I do not understand this distinction, and it is fairly certain that neither Beecher nor his congregation did either. But it sounded exceptionally good.

Beecher had other good news for his affluent flock. God particularly loved sinners, for He greatly enjoyed redeeming them. So, by implication, one could go out of an occasional evening and sin. The ensuing repentance and redemption would then do wonders for God's morale. Beecher thereupon proceeded to follow his own advice. Robert Shaplen, the author of the definitive study of Beecher's private and litigious life and later one of the most authoritative reporters on Vietnam and the Vietnam war, has shown how faithful he was in this regard . Besides comforting his rich parishioners on the legitimacy of their wealth, Beecher comforted their wives - some of them at least - by taking them to bed. Eventually one, Elizabeth Tilton , was assailed by the thought that even though Beecher was being redeemed, her case was not so clear. So she confessed not to God as intended but to her husband, and he sued Beecher. The jury disagreed on Beecher's guilt. No one who has since looked at the evidence has had any similar doubt.

Speaking of Herbert Spencer, the British scientist and author of the Social Darwinist classic Social Statics, Galbraith writes, "Earlier on, I mentioned that Beecher had told Spencer of his hope that they would meet again in heaven. There must be many, and I am one, who would prefer not to meet either."

But the best part of this segment is his description of the economist and social critic Thorstein Veblen, which begins in the documentary around 30:00, in which he calls Veblen "the preeminent critic of the manners and morals of the great American capitalists." Galbraith is conventionally considered to have been working in the "structuralist" economics tradition of Veblen. Why it's called "structuralist," I've yet to discern.

In the book, Galbraith writes:

The rich have regularly invited the resentment of the less rich or the poor. Why should they have so much? What virtue justifies their higher income and station? This attack the rich can always stand. It proceeds from envy, and this affirms their superiority.

The Veblen weapon was far more refined; it was ridicule presented as the most somber and careful science. All primitive tribes had their festivals, rituals and orgies, some of them exceptionally depraved. Likewise the rich. Their social observances and rituals might be different in form and detail but their purpose was the same - self-advertisement, exhibitionism. And for every exhibitionist mannerism or enjoyment of the rich, Veblen came up with some deplorable barbarian counterpart. The Vanderbilts bound up their women in corsets, thus proving they were purely objects of enjoyment and display. The Papuan chief carved up the faces or breasts of his wives to the same end. The rich gathered for elegant dinners and entertainments. The counterpart ritual of the aboriginal community was the potlatch or orgy. Veblen could do wonders even with a walking stick:

The walking-stick serves the purpose of an advertisement that the bearer's hands are employed otherwise than in useful effort, and it therefore has utili ty as an evidence of leisure. But it is also a weapon and it meets a felt need of barba rian man on that ground. The handling of so tangible and primitive a means of offense is very comforting to anyone who is gifted with even a moderate share of ferocity.

Galbraith concludes that chapter of the book with this memorable observation:

My own thought is that if men are sufficiently concerned to acquire money, their behavior will reflect that preoccupation and be much the same, whatever the time or place. Out of moral sense, caution or conscience- conscience being, as Mencken once said, "the inner voice which warns us that someone may be looking" - most, it may be expected, will remain within the law. But a largely stable minority will be impelled to step over the line into forthright rascality.

The rascality will not vary much as to form from one period to the next. Popular opinion and popular fiction to the contrary, this is not a line of work that attracts the highly innovative mind. The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced.

The manners of capitalism improve. The morals may not. But, equally, they do not get worse.

Tags: age of uncertainty, john kenneth galbraith

John Kenneth Galbraith, "The Age of Uncertainty: The Prophets and Promise of Classical Capitalism"

John Kenneth Galbraith did a 15-episode TV documentary series in 1977 called The Age of Uncertainty, with a companion book volume of the same name.

The episodes are currently available on YouTube, so I'm going to post them here, one per day.

Staring with, of course, The Age of Uncertainty Episode 1 - The Prophets and Promise of Classical Capitalism:

Much of this episode is devoted to the founders of economics, Adam Smith and David Ricardo.

He prepared the book's text based on the essays he wrote from which the TV script was prepared. So the text has additional material not included in the TV broadcast.

In the book's first chapter, he writes:

On one of the last pages of his last and most famous book John Maynard Keynes - by wide agreement the most influential economist of this century - observed that" ... the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." This was written in 1935. Thinking then of the oratory of Adolf Hitler, Joseph Goebbels and Julius Streicher which was at the time in full tide, and of Alfred Rosenberg and Houston Stewart Chamberlain from whose writings they drew their racial doctrines, he added: "Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." Then came his affirmation: "... the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas."

But he characteristically proceeds to qualify Keynes' observation: "... we had best not close our eyes too completely to the idea of vested interest. People have an enduring tendency to protect what they have, justify what they want to have. And their tendency is to see as right the ideas that serve such purpose. Ideas may be superior to vested interest. They are also very often the children of vested interest."

Writing of pre-Revolutionary France, he also makes this useful point:

People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged feel also that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich. So it was in the Ancien Régime. When reform from the top became impossible, revolution from the bottom became inevitable.

Tags: age of uncertainty, john kenneth galbraith

Nationalizing YPF in Argentina

Aljazeera English's Counting the Cost just over a year ago did a program whose first part is devoted to the nationalization of Argentine oil company YPF, Argentina's president vs capitalism 04/21/2012, which takes a skeptical view of the action:

They have an accompanying article, Argentina's president vs capitalism 04/27/2013. Nationalizing YPF certainly meant the state taking more control and responsibility and prioritizing Argentina's interest in developing their oil and natural gas reserves over the profit maximization of that single company, which had previously been the subsidiary of a Spanish firm, Repsol. As the article reports:

Argentina accuses Repsol of driving down production at YPF and taking 90 per cent of the company's profits.

But could this drama have a lot more to do with Fernandez falling out with Argentina's billionaire Eskenazi family? Through the family's Peterson Group it owns 25 per cent of YPF.

Nestor Kirchner, Fernandez's late husband, helped the Eskenazis buy the stake - although it was Repsol that loaned the money.

YPF is now state-owned but is not run as though it were a government agency. It remains a separate business that will need to generate a profit. Calling it "state capitalism" would be more meaningful that saying it was "vs. capitalism." State ownership of the leading oil firms of major oil-producing countries is common among a variety of governments, including China, Mexico, Norway, Russia, Saudi Arabia and Venezuela. I wrote a series of posts last year about a series of articles in The Economist on state capitalism, including one on state-owned oil companies.

Tags: argentina, state capitalism, ypf

Security theater

One of the more dysfunctional responses to the 9/11 attacks in 2001 has been the various form of security theater that have grown up in addition to actually necessary precautions. Some are aggravating, some are just dumb.

One of my favorites is when a guard at the security line on an international flight takes your passport, looks at it seriously and then looks at you and asks, "Your last name?" Because, you know, a dangerous terrorist on a secret mission to do terrible harm to somebody would probably forget to memorize the name on his fake passport. If he was even using a fake one.

Some forms of security theater, though, can be dangerous. Joe Eskenazi gives an example from last month in Insecurity SF Weekly 05/01/2013, involving AT&T Park in San Francisco, which started a no-packpack rule after 9/11 that doesn't apply to suitcase-sized handbags:

This kind of "security" attains the rare two-fer of being both moronic and oxymoronic. And, alas, it's not a vestige of a bygone era. On Friday, April 19, thousands of people — perhaps even tens of thousands — massed outside AT&T Park. First pitch was already in the books, but the swelling crowd on Willie Mays Plaza was more tightly packed than a ballpark-bound N-Judah and growing larger and denser by the minute. Black-and-orange-clad fans spilled into the crosswalks and across the intersections. Lines blended into other lines; listless fans slowly perambulated around the plaza in a Möbius-shaped path.

It was a maniacally frustrating moment — and not merely because the throngs had been essentially standing still, cheek-to-jowl, for the better part of an hour and were now missing the game they'd paid to see. More substantively: In reaction to an attack directed at many thousands of people packed alarmingly tightly into the streets of Boston, AT&T Park security measures resulted in many thousands of people being packed alarmingly tightly into the streets of San Francisco.

"They created a perfect crowd scene for killing the maximum amount of people," reflects Ohio State professor John Mueller, co-author of Terror, Security, and Money. "It's basically absurd." But not uncommon — or unexpected. "This is so stupid. And it happens all the time," says security expert Bruce Schneier. "It's very standard: Something must be done.

"This is Something. Therefore, we must do it."

Eskenazi did some follow-up and found that it's standard practice at AT&T Park that when the crowd starts backing up seriously, the just cut back the security checks and let people in, which they eventually did that night. And he makes the sensible observation, "A system in which thousands of people are pushed into the streets and rendered soft targets, followed by the predictable abandonment of that system after it produces a backup, can hardly be described as effective — or even much of a system."

Romesh Ratnesar addresses the issues in As in Boston, Resilience Can Help the U.S. Defeat Terrorist Attacks Bloomberg Businessweek 04/18/2103 (print title, "The New Normal"):

The decline in terrorist activity stems from multiple factors, ranging from more restrictive immigration policies to vast improvements in intelligence gathering. In some ways, the U.S.’s counterterrorism system is a victim of its success: The absence of attacks has heightened Washington’s obsession with preventing another one at any cost. The U.S. has spent at least $640 billion on homeland security measures in the years since the attacks on the World Trade Center and Pentagon. The inescapable logic of counterterrorism is that such vast expenditures are capable of defending the country against Sept. 11-style hijackings, but they can’t do much to prevent two relatively crude devices from producing nearly 200 casualties in Boston.

The U.S. has been successful in reducing the threat of terrorism, but it has wildly overspent in a futile attempt to achieve the goal of eliminating it. "After 9/11 we put our national security apparatus on steroids and decided that we were going to try to stop another attack from ever taking place," says Stephen Flynn, a professor of political science at Northeastern University, who has advised the government on homeland security issues. "But much less investment was made to increase our society’s ability to respond to such events."

He uses the word "resilience" to refer to the ability of government to respond effectively to terrorist attacks, as in properly trained and staffed first responders and police.

The United States paid a heavy price in numerous ways by responding to the 9/11 attacks by treating it as the occasion to become more militarily aggressive and declare a Long War against Terrorism. The focus really should have been on sensible saftety measures - like not allowing actual knives on planes - rather than on the military aggression that creates new enemies and new targets. An attack on the Al Qaeda concentrations in Afghanistan after 9/11 was a necessary part of the response. But an invasion of Iraq and a decade-plus of ongoing war in Afghanistan were not.

Tags: terrorism, global war on terrorism, gwot

Obama's latest sacrificial lamb

President Obama was under fire for the IRS Tea Party flap.

So he fired Steven Miller, acting IRS commissioner, who seems to have had nothing at all to day with it, as Alex Seitz-Wald reports (Obama’s unfortunate scapegoat Salon 05/15/2013):

The acting commissioner was not running the IRS at the time employees improperly targeted Tea Party groups — that would be Bush-appointee Doug Shulman, who resigned as commissioner last year — and Miller’s name isn’t mentioned a single time in the Treasury Department inspector general’s report. Indeed, there is no evidence that Miller was in any way responsible, involved or even aware of the inappropriate targeting of conservative groups by underlings. He is falling on his sword for something he did not do.

We've seen Obama do this before, hastily dump someone to take the heat off himself.

But I doubt this is do him much good. It certainly won't stop the Republicans from attacking him aggressively. And it reminds his supporters that he considers them pretty much all expendable.

Tags: barack obama

Austerity's fruits in Europe

Eurostat reports in a news release of 03/15/2013:

GDP fell by 0.2% in the euro area (EA17) and by 0.1% in the EU27 during the first quarter of 2013, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the fourth quarter of 2012, growth rates were -0.6% and -0.5% respectively.

Compared with the same quarter of the previous year, seasonally adjusted GDP fell by 1.0% in the euro area and by 0.7% in the EU27 in the first quarter of 2013, after -0.9% and -0.6% respectively in the previous quarter. [emphasis in original]

Euronews reports, Eurozone slips into its longest ever recession 03/15/2013:

Meanwhile in Greece, Striking vendors hand out free food in Athens Reuters Video 03/15/2013:

Jon Henley reports for the 'Recessions can hurt, but austerity kills' Guardian, 03/15/2013:

In a powerful new book, The Body Economic, [David] Stuckler and his colleague Sanjay Basu, an assistant professor of medicine and epidemiologist at Stanford University, show that austerity is now having a "devastating effect" on public health in Europe and North America.

The mass of data they have mined reveals that more than 10,000 additional suicides and up to a million extra cases of depression have been recorded across the two continents since governments started introducing austerity programmes in the aftermath of the crisis.

In the United States, more than five million Americans have lost access to healthcare since the recession began, essentially because when they lost their jobs, they also lost their health insurance. And in the UK, the authors say, 10,000 families have been pushed into homelessness following housing benefit cuts.

The most extreme case, says Stuckler, reeling off numbers he knows now by heart, is Greece. "There, austerity to meet targets set by the troika is leading to a public-health disaster," he says. "Greece has cut its health system by more than 40%. As the health minister said: 'These aren't cuts with a scalpel, they're cuts with a butcher's knife.'" [my emphasis]

And there were clearly alternatives:

Stuckler seizes on Iceland as an example of "an alternative. It suffered the worst banking crisis in history; all three of its biggest banks failed, its total debt jumped to 800% of GDP – far worse than what any European country faces today, relative to the size of its economy. And under pressure from public protests, its president put how to deal with the crisis to a vote. Some 93% of the population voted against paying for the bankers' recklessness with large cuts to their health and social-protection systems."

And what happened? Under Iceland's universal healthcare system, "no one lost access to care. In fact more money went into the system. We saw no rise in suicides or depressive disorders – and we looked very hard. People consumed more locally sourced fish, so diets have improved. And by 2011, Iceland, which was previously ranked the happiest society in the world, was top of that list again."

What also bugs Stuckler – an economist as well as a public-health expert – is that neither Iceland nor any other country that "protected its people when they needed it most" did so at the cost of economic recovery. "It didn't break them to invest in programmes to help people get back to work," he says, "or to save people from homelessness. Iceland now is booming; unemployment is back below 4% and GDP growth is above 4% – far exceeding any of other European countries that suffered major recessions."

Those countries who have followed the austericide prescriptions of German Chancellor Angela "Frau Fritz" Merkel aren't finding it such a happy choice. France, under François Hollande's Socialist majority government that came to power last year promising to resist Frau Fritz' austerity demands saw its economy shrink by 0.4% in the first quarter of 2013 compared to Q1 2012.

Ann Pettifor writes about France's situation in The reason France has gone into double-dip recession Guardian 03/15/2013:

... the French have just entered double-dip recession, while we [Britain] have just escaped. But in fact, in recent years the French and British economies have performed pretty much similarly in terms of GDP "growth" (or lack of).

The real European news today should, though, focus not so much on France, and certainly not alone, but on the dire state of the eurozone and broader EU economies. And this has no correlation with the formal political orientation of the government (centre-left, centre-right or whatever).

There is now a group of 10 EU states, not including France or the UK, who have experienced an annual fall in GDP for each of the past four quarters. This "Austerity A10 Club" includes the usual southern Europe list of Greece, Spain, Italy, Cyprus and Portugal. But it also includes two central European countries – the Czech Republic and Hungary – and the northern bloc of Belgium, Finland and the Netherlands – the land of Jeroen Dijsselbloem, Dutch finance minister and chair of the Eurogroup finance ministers, fresh from the Cyprus bailout "triumph". [my emphasis]

The lack of correlation with type of government has to do with the euro currency trap, the dominance (or "hegemony") of neoliberal ideology among bothe conservative and center-left parties, and the factual dominance of Germany in the eurozone.

Speaking of Frau Fritz, a new book emphasizes the supposed influence of East German Communist ideology on her. (New Biography Causes Stir: How Close Was Merkel to the Communist System? Spiegel International 03/14/2013)

Frau Fritz is one of my least favorite politicians in the world right now. It will be near-miraculous if the European Union survives what she's done to it, and the euro even more so. But I've read biographies of her and made some attempt to understand how much the East German system influenced her current style. This book's claims sound pretty dubious.

I do think she does partially see Germany running the EU like the Soviet Union ran the Warsaw Pact. But I think her understanding of the experience of West Germany assimilating the eastern provinces after 1990 was a much bigger influence. I just saw a Nietzsche quote that probably reflects her outlook, except for the gender: "A statesman divides people into two types, first tools, second enemies. Really, then, for him there is only one type of people: enemies."

With current policies continuing, Wolfgang Münchau foresees a decade of stagnation for the eurozone (Euro-Krise: Die lähmende Herrschaft der Zombie-Banken Spiegel Online 15.05.2013) He's looking in particular at the exceptionally dim prospects for any kind of near-term banking union, which the eurozone has to have if it is going to survive in a manner that doesn't lay waste economically to Cyprus, Greece, Ireland, Italy, Portugal, Slovenia and Spain, to mention only the countries most seriously at risk right now from Frau Fritz' austerity hammer. The banks themselves are still too affected by the ongoing depression to contribute what they should to recovery through active lending. The recent lowering of rates by the ECB can contribute in only a very limited way, if at all, to improving matters now. (José Carlos Díez, Draghi y el helicóptero El País 03.05.2013) As Münchau writes, the European banks needed to be recapitalized. And they need to be recapitalized without leaving the national governments in countries like Spain and Italy on the hook for recapitalizing them via additional borrowing which is then penalized by EU requirements for even more crippling austerity measures.

Heckuva job, Angie, heckuva job!

Tags: angela merkel, austerity economics, eu, euro, european union, france, françois hollande, greece

Krugman tells the story of present-day austericide economics

Paul Krugman has a typically insightful account on the story of austerity economics during the current depression in How the Case for Austerity Has Crumbled New York Review of Books 60:10 (06/06/13 edition; accessed 05/15/2013).

This is a key moment in the story:

... where the onset of the Great Depression was accompanied by policies that intensified the slump—interest rate hikes in an attempt to hold on to gold reserves, spending cuts in an attempt to balance budgets—2008 and 2009 were characterized by expansionary monetary and fiscal policies, especially in the United States, where the Federal Reserve not only slashed interest rates, but stepped into the markets to buy everything from commercial paper to long-term government debt, while the Obama administration pushed through an $800 billion program of tax cuts and spending increases. European actions were less dramatic—but on the other hand, Europe’s stronger welfare states arguably reduced the need for deliberate stimulus.

Now, some economists (myself included) warned from the beginning that these monetary and fiscal actions, although welcome, were too small given the severity of the economic shock. Indeed, by the end of 2009 it was clear that although the situation had stabilized, the economic crisis was deeper than policymakers had acknowledged, and likely to prove more persistent than they had imagined. So one might have expected a second round of stimulus to deal with the economic shortfall.

Instead, a faith-based enthusiasm for austerity policies, unhinged from actual evidence that such an approach would be anything but harmful in a depression, took hold in both Europe and the US. As Krugman puts it, "Standard textbook economics says that slashing government spending reduces overall demand, which leads in turn to reduced output and employment." So it's not as though nobody knew this was a bad idea. But the crowd Krugman has labeled the Very Serious People - which is probably going to be a lasting contribution of Krugman's to American English - thought otherwise.

And they found economists who were telling them what they wanted to hear, two significant pairs of whom Krugman discusses in this essay, Alberto Alesina and Silvia Ardagna, and the duo that recently became world-famous for an Excel coding error, Carmen Reinhart and Kenneth Rogoff.

And Herbert Hoover/Heinrich Brüning got an excellent real-world test. Unfortunately for most of those who experienced it. And the support from the economics profession that allegedly supported the policy proved to be built on sand, or had feet of clay, or blew away like stray in the wind, whatever metaphor you prefer:

Three years after the turn to austerity, then, both the hopes and the fears of the austerians appear to have been misplaced. Austerity did not lead to a surge in confidence; deficits did not lead to crisis. But wasn't the austerity movement grounded in serious economic research? Actually, it turned out that it wasn't—the research the austerians cited was deeply flawed.

First to go down was the notion of expansionary austerity. Even before the results of Europe’s austerity experiment were in, the Alesina-Ardagna paper was falling apart under scrutiny. Researchers at the Roosevelt Institute pointed out that none of the alleged examples of austerity leading to expansion of the economy actually took place in the midst of an economic slump; researchers at the IMF found that the Alesina-Ardagna measure of fiscal policy bore little relationship to actual policy changes. "By the middle of 2011," Blyth writes, "empirical and theoretical support for expansionary austerity was slipping away." Slowly, with little fanfare, the whole notion that austerity might actually boost economies slunk off the public stage.

Reinhart-Rogoff lasted longer, even though serious questions about their work were raised early on. As early as July 2010 Josh Bivens and John Irons of the Economic Policy Institute had identified both a clear mistake—a misinterpretation of US data immediately after World War II—and a severe conceptual problem. Reinhart and Rogoff, as they pointed out, offered no evidence that the correlation ran from high debt to low growth rather than the other way around, and other evidence suggested that the latter was more likely. But such criticisms had little impact; for austerians, one might say, Reinhart-Rogoff was a story too good to check.

It is a tribute to the power of stories that austericide economics got such a hearing. But it was more a tribute to the influence of the very wealthy who, for reasons that may in some ways have been partially rational and in other just plain misguided, supported austericide. Krugman puts it this way:

So is the austerian impulse all a matter of psychology? No, there’s also a fair bit of self-interest involved. As many observers have noted, the turn away from fiscal and monetary stimulus can be interpreted, if you like, as giving creditors priority over workers. Inflation and low interest rates are bad for creditors even if they promote job creation; slashing government deficits in the face of mass unemployment may deepen a depression, but it increases the certainty of bondholders that they’ll be repaid in full. I don’t think someone like Trichet was consciously, cynically serving class interests at the expense of overall welfare; but it certainly didn’t hurt that his sense of economic morality dovetailed so perfectly with the priorities of creditors.

It’s also worth noting that while economic policy since the financial crisis looks like a dismal failure by most measures, it hasn't been so bad for the wealthy. Profits have recovered strongly even as unprecedented long-term unemployment persists; stock indices on both sides of the Atlantic have rebounded to pre-crisis highs even as median income languishes. It might be too much to say that those in the top 1 percent actually benefit from a continuing depression, but they certainly aren’t feeling much pain, and that probably has something to do with policymakers’ willingness to stay the austerity course.

I wonder if it's conscious irony on his part that after dismissing the deeply-ingrained habit of looking at economics as a morality play, in his concluding section he uses the language of "sin" to describe the failings of the economics profession around the current depression.

Tags: austerity economics, paul krugman

Obama and press freedom

Will Bunch is pretty put out by the Obama Administration's seizing of AP phone records. In The Day the Obama Administration Went All Nixon On Us Attytood 05/13/2013, he describes the problem:

Since the day he took office, the Obama administration has undertaken an assault on government whistleblowers -- people informing citizens of what their government doesn't want them to know -- that surpasses anything that Nixon or any other president has done. Since 2009, the Obama administration has brought espionage charges against six whistleblowers. And most of these whistleblowers have been criticizing that way that America conducts its neverending war of the 21st Century. One, Thomas Drake, blew the whistle on the illegal warrantless wiretapping that began under George W. Bush. John Kiriakou dropped the dime on illegal U.S. torture -- and was sent away to prison, even as the perpetrators of torture from Dick Cheney to John Yoo continue to walk freely among us.

Nixon had Daniel Ellsberg, and Obama has Bradley Manning of Wikileaks. OK, so they didn't break into the office of Manning's psychiatrist, but they have detained Manning in a solitary confinement that a UN torture expert called "cruel, inhuman and degrading." Do you feel better about that? Because I don't. The war on whistleblowers, the treatment of Manning, and now this investigation of journalists are all hallmarks of a White House that promised transparency but has been one of the most secretive -- all to the detriment of the public's right to know.

Let's be clear -- this is about Obama...and it is about much, much more than Obama. It is yet another example of how the national security state that has dominated our political life since World War II has corrupted the American soul. It is exactly what Philadelphia's own Benjamin Franklin tried to warn us about -- trading liberty for security, and geting neither. To the conservatives reading this, who warn so much about big government running amok...here it is. To the liberals reading this, who thought that one man named Barack Obama could change the system, he couldn't. Only we, the citizens, can truly change things. [my emphasis]

The "American soul" is a little abstract for my taste. Basic rule of law in the matter would be good enough for me.

Tags: barack obama, obama administration

Stephen Walt and Realist foreign policy in the Obama Administration

Stephen Walt has an intriguing, favorable evaluation of the Obama Administration for a non-war-inclined Realist perspective in Barack the buck-passer Foreign Policy 05/06/2013. And in this instance, Walt thinks buck-passing is a good thing:

I think I have finally figured out the essence of Barack Obama's approach to foreign policy. In a word, he is a "buck-passer." And despite my objections to some of what he is done, I think this approach reveals both a sound grasp of realpolitik and an appreciation of America's highly favorable geopolitical position.

In particular, the bedrock foundation of Obama's foreign policy is his recognition that the United States is very, very secure. That statement doesn't mean we have no interests elsewhere, but none of them are truly imminent or vital and thus they don't require overzealous, precipitous, or heroic responses. There's no peer competitor out there (yet) and apart from the very small risk of nuclear terrorism, there's hardly anything that could happen anywhere in the world that would put U.S. territory or U.S. citizens at serious risk. We will inevitably face occasional tragedies like the recent Boston bombing, but the actual risk that such dangers pose is far less than many other problems (traffic fatalities, industrial accidents, hurricanes, etc.), no matter how much they get hyped by the terror industry and our over-caffeinated media. [my emphasis]

Walt faults Obama for his ill-advised escalation ("surge") in Afghaninstan, which he parenthetically describes as "a decision I'll bet he secretly regrets."

He sums up:

I have my doubts about the net benefits of the drone war and targeted assassination program, but the rest of Obama's approach makes eminently good sense to me. Indeed, I wish he could give one of his trademark speeches explaining this logic to the American people. He probably can't, alas, because this sort of realism cuts against the rhetoric of "global leadership" that has been part of the Establishment echo-chamber for decades, not to mention the self-conceit of American exceptionalists. So Obama will continue to sound like his predecessors when he talks about America's global role; he just won't do most of the foolish things that most of them would have. Good for him, and for us. [my emphasis]

That rhetorical restraint, though, is part of Obama's chronic problem from a progressive standpoint. Nixon and Kissinger, despite their many undesirable acts as public officials, did dramatically change the context of Cold War thinking with the SALT nuclear arms control treaty and the diplomatic opening to China. It was even fashionable for a few years there to talk about "detente" having replaced the Cold War, though now convention considers the entire period from 1948 (at the latest) to 1989 as the Cold War.

With their advocacy of preventive war and torture, Dick Cheney and George W. Bush also qualitatively changed the way people think about foreign policy and terrorism.

Obama has significantly restrained the policy without challenging its premises.

Tags: barack obama, obama administration, us foreign policy

Bro. Sword-of-Vengeance is after them Muslims again

Bro. Wade "Sword-of-Vengeance" Burleson writes about them thar Muslims in Sharia Law Should Be Resisted in the 21st Century Like Nazism Was Resisted in the 20th Century Istoria Ministries 05/13/2013. Short version: Muslims is like Nazis and Commies and "Adolph" Hitler and stuff and darkie Muslims rape nice blond white women.

He's probably spend the weekend catching up on The New American, the magazine and website the John Birch Society, the mother ship of crackpot rightwing conspiracy theories and one of Bro. Sword-of-Vengeance's favorite sources.

His post is Bircher quality, in its reasoning and its imagery. Oklahoma passed a law against the non-existent threat of Sharia Law (Islamic religious law). Even though for the state to have Sharia law the legislature would have to pass it. And an Australian woman was raped in Dubai and the country's justice system didn't seem to perform very well in her case. Therefore: "Does Oklahoma look so backwards now?"

Uh, yeah, Bro. Sword-of-Vengeance. And you ain't helping its image much.

The story of the Australian rape victim is real: Alicia Gali, Woman Who Spent 8 Months In UAE Jail After Being Raped, Tells Her Story The Huffington Post 05/12/2013.

But the use Bro. Sword-of-Vengeance makes of it is straight out of the segregationist playbook.

When rightwingers start expressing their heartfelt concern for the rights of women in Muslim countries, especially blond white women sexually assaulted by locals, it's time to be alert to the political message they're actually trying to send. American conservatives generally care about women's rights abroad only in countries they want to bomb and/or invade.

And Bro. Sword-of-Vengeance has really been eager lately to see the swords start swinging. Last November just after President Obama was re-elected, he wrote in On Dog Poo and Politics: A Metaphor Istoria Ministries Blog 11/07/2012. His post is about President Obama's re-election. His maudlin take on the immediate future:

I believe our world is about to be shaken on several fronts. The coming fiscal cliff, the impending Israel/Iran war, the Russian and Chinese push to switch to the Yen as the world's currency, and a host of other foundation shaking events are just months away. However, that is a good thing. Too many put their trust in this world's systems, governments, and political leaders. We are foreigners. Foreigners' votes never count because there is no stake in the election.

Now, I'm not one for using only prissy language in politics. And I've referred to the Republicans as being in a "poo flinging" mood in the last four years referring to their often hysterical attacks on Obama.

But Bro. Sword-of-Vengeance in this post devotes four paragraphs to a graphic metaphor of why four more years of a Democratic Administration is like stepping in a big pile of dog shit. I think it's kind of sickening myself.

But fear and hatred is what the Christian Right traffics in.

Tags: john birch society, wade burleson

Yes, Republicans are still obstructing, Obama keeps trying to charm them into not doing so

Bob Kuttner in Munich on the Potomac: The Republican Take-No-Prisoners Strategy -- and Obama's Conciliation Huffington Post 05/12/2013 describes the current state of play in Republican obstruction in the Congress. Including their "unprecedented stalling on judicial nominations, notwithstanding the administration's practice of checking with Republicans to see which proposed judges might win their approval -- a courtesy that has added to the delay, and one that Republicans have taken as another sign of weakness."

Obama really seems to be seriously wedding not only to neoliberal corporations-first economic ideology but to the illusion that he will achieve some kind of postpartisan state of cooperation with the Republicans. Here in the real world:

Nominees more to the GOP's ideological liking are rewarded with quick confirmation. Treasury Secretary Jack Lew, a friend of Wall Street and of fiscal austerity, sailed through 71-26, with almost half the Republican Senate caucus in support.

Meanwhile, in the next ring of the circus, House Speaker John Boehner is looking forward to the next debt ceiling showdown to see what else he can hold for ransom. According to several authoritative accounts, this time Republicans will not stop with budget cuts, but will also use the debt ceiling to demand changes in the tax code, regulatory rollbacks and pro-industry shifts in energy policy. Details are to be spelled out at a strategy meeting this coming Wednesday.

Obama's term still has more than three and a half years to run and Democrats still have a 55-45 majority in the Senate, but the Republicans are treating him like the lamest of lame ducks. It should be clear by now -- meeting these people halfway only whets their appetite.

Tags: barack obama, obama administration