Notes On The News
by Gwydion M Williams
An Extremely Inconvenient Truth [Climate Change]
Ukraine – give them democracy even if it kills them
A False Recovery? [in the UK]
“Living standards in Britain have suffered their most prolonged decline for at least half a century, according to official data that has been seized on by Labour as further proof of a cost of living crisis under the coalition.
“A report from the Office for National Statistics found that real wages have been falling consistently since 2010, the longest such period since at least 1964, when comparable records began. Statisticians put the deterioration down to several factors such as a change in the number of hours people work as well as a fall in productivity.”[i]
This happened because Western governments gave priority to saving the complex and deregulated financial structures that had developed over the last 40 years. They had an easy run, because of the deep-seated fear of state power that was a legacy of 1960s radicalism. Most protests go no further than saying “it should not happen”, rather than demands for re-regulation. People remain equally suspicious of the state and big business, meaning that big business gets to decide what the state should and should not regulate.
It’s not that large numbers of people like the outcome of the deregulationist and anti-state pattern that Thatcher and Reagan began. Inequality is correctly seen a source of endless quarrelling and ill-feeling, unless there is some clear and fair basis for it. No one minds a modest extra for people who have earned it, done something that deserves a proportionate reward. But people increasingly think that managers are vastly overpaid, while many bankers get ludicrously large rewards for doing the wrong things.
Well-qualified individuals like doctors, scientists or airline pilots manage fine on two or three times the average income, maybe 40K to 70K in Britain. So why do a few managers and speculators need to get vastly more? Very few people would rate them as being ten or twenty times as valuable and deserving as a worker on the average wage. Never mind hundreds or thousands of times more valuable and deserving, which would be the logic of saying that they’d earned it.
Speculators and dealers are mostly getting vast rewards for legalised financial crimes. Things that were banned after the Wall Street Crash and Great Depression, and which the finance industry successfully lobbied to get restored.
Of course the New Right won almost by default in the Age of Coolhearts, the era when 1950s technocracy and 1960s radicalism both lost favour. In Britain, the organised working class in the Trade Union movement was dominant in the 1970s. But the newly popular “coolheart” outlook was deeply hostile to translating this into any sort of formal arrangement. The Bullock Report offered extensive Workers Control, worker representatives on the Board of Directors. The left much preferred an endless round of formless militancy, and were utterly astonished when this led to Thatcherism.
Thatcherism appealed to a widespread gambling spirit, people hoping to be among the few who got the big prizes. The legalised financial crimes of the new finance did make a few people very rich from humble beginnings. More importantly, it gave false hopes to many more.
The housing market did the same thing at a broader and more respectable level. People saw the values of their houses shoot up, in some cases. It got a lot more people fancying that they were part of capitalism and would flourish within it. A lot of them lose money, of course. Small investors mostly do: they are the ‘silly money’ that allows the ‘smart money’ to make a profit while doing nothing useful. And it detached the market from its original purpose of providing decent places to live:
“In Spain more than 3.4m homes lie vacant, in excess of 2m homes are empty in each of France and Italy, 1.8m in Germany and more than 700,000 in the UK.
“There are also a large numbers of vacant homes in Ireland, Greece, Portugal and several other countries, according to information collated by the Guardian.
“Many of the homes are in vast holiday resorts built in the feverish housing boom in the run up to the 2007-08 financial crisis – and have never been occupied.
“On top of the 11m empty homes – many of which were bought as investments by people who never intended to live in them – hundreds of thousands of half-built homes have been bulldozed in an attempt to shore up the prices of existing properties.”[ii]
But while people complain, they don’t call for legislation to make speculative building unprofitable if it fails to meet human need. Nor do they call for a resumption of the broadly successful policy of public housing, Council Houses in Britain. There were mistakes made in such systems, of course. Tower blocks that Britons found uninhabitable, though other nationalities seem fine with them. And housing estates that were solid houses without the normal shops, pubs etc. But the whole program could be resumed with the correct lessons learned.
What’s happening just now is the reverse. New benefit rules amount to a wealth-based “ethnic cleansing”. It’s not quite a matter of class, the new elite accept social mobility at most levels, though the Old Etonians and similar are back on top. But they’d be happy to see the poor squeezed out of London.
Meantime student loans seem not to be working, at least in the sense that much of the money nominally loaned will probably never be recovered:
“Concerns about the cost of uncollected student debt, currently totalling £46bn, have grown following the rise in tuition fees for British students to £9,000 a year that increased the financial burden on graduates.
“Ministers admitted in December that an initial estimate that 30 per cent of loans would be written off had been raised to 35-40 per cent. The public accounts committee said on Friday the figure could be as high as 48 per cent.”
“Margaret Hodge, who chairs the committee, has accused the Student Loans Company of being ‘in the dark’ on the intentions of more than 350,000 borrowers who are not repaying but are classified in the repayment category. She sees the information available on overseas students as even more dubious.”[iii]
But was recovery of the money ever the main intention? I’ve heard it suggested that “the main function of the thing was to bring about a cultural change in the attitude towards debt. What better way than making debt compulsory among the most immature and impressionable sector of the community? It was ‘sold’ on the basis that a higher education qualification will guarantee a higher income in the future and the debtor could have jam today with the promise of more jam tomorrow. The same reasoning was involved in the policy of the council house sell-off. The old idea that debt was to be avoided if at all possible was destroyed on the back of council-house mortgages and student loans. Neither makes any sense in social terms but makes absolute sense in terms of the requirements of financial capitalism in the 80s and 90s”.
I share this view. Student Loans encourage the view of life as a burden on money, and money as the main measure of human worth. People accept this, or else chose an ineffective anarchic drop-out mentality. Anything to get away from the Mixed Economy view that the state can do a lot to foster human wealth, ignoring profit and loss.
We in the Ernest Bevin Society are almost the only people in Britain or Ireland who still say this without qualifications or evasions. Which is discouraging, but the other methods are visibly not working. And in the wider world, this is still the norm.
A big loss of confidence in Anglo values is quite likely in the long term. One feature of the Age of Coolhearts has been a lack of belief that there is anything worth suffering for or dying for. This has very much included the hard-core New Right, though they have been quite successful in getting others to die on their behalf. A “Book of New Right Martyrs” would be remarkably short of people you could put in it. (Which is not true of other right-wing causes, of course, including some that most of today’s West Europeans would view as obnoxious.) So the whole thing could collapse much more rapidly than it rose.
The Capitalist Restoration
Commerce long ago learned to put a nice name on whatever you’re trying to sell. So plans for a capitalist restoration in the 1980s were called “reforms”. They were an attempt at reverting to what had existed in the 1920s and should have been called “reactionary”. But this didn’t happen. Most left-wing critics made silly comparisons with Nazism, which didn’t stick.
The New Right should have been taken on over their belief in “Miraculous Mammonism”, the notion that people pursuing private profit would produce an ideal result through market mechanisms. Now this can happen sometimes, just not often enough. The arguments ignoring all the times when it fails and the state knows better.
What’s resulted has been a growth of inequality without any improvement in average economic growth, meaning that everyone has lost out except the very rich. In Britain, unlike the USA, the working mainstream are better off than they were in the 1970s, certainly. But no more than if the Mixed Economy had been fixed rather than repudiated after its 1970s crisis.
To make this clear, I decided to go back as far as there are reliable figures. And to look at GDP growth from one decade to the next, rather than year by year, which can be too variable. Britain astonished the world with its initial Industrial Revolution, beginning in the 1760s. But by the 1830s, which is when the figures start, the rest of Western Europe was adjusting.
What you see is fairly steady advance for the United Kingdom. But Germany starts to surge ahead. Damaged by losing two World Wars, they surge ahead again in the era of Mixed Economy, so-called Keynesianism. This is much the same whether you look at the whole economy or wealth per person
(Based on figures from The World Economy: Historical Statistics by Angus Maddison.)[iv]
An Extremely Inconvenient Truth [Climate Change]
Al Gore’s spiel about Climate Change, filmed and available as “An Inconvenient Truth”, turns out to be nothing like alarmist enough. He also left himself vulnerable by talking about “Global Warming” (though I think that it was the norm at the time). He didn’t give the proper emphasis to the probability of much bigger fluctuations within a general warming trend. So he might seem to have been refuted by a sudden cold snap, never mind that there were also drastic drought and unprecedented heat at other times and/or in other places.
I mentioned last month that while the US was having unusual cold, Scandinavia had an unusually mild winter, while both Australia and Argentina had heat waves. (Our winter is their summer, south of the equator.) Meantime a period of usually rainy weather in Britain was nothing so bad at first, but got increasingly disastrous as the land became saturated and far more rain than normal kept falling.
A simple rise of a degree or two would not be as serious as what’s now happening. What we have is Climate Change, a major shifting of the weather patterns. Climate scientists believe that the last 10,000 years have been unusually stable compared to most of the Earth’s history. If this is correct, then almost any major change is going to make the weather much less predictable and more likely to show patterns we’d have viewed as extreme and unlikely.
The arctic has warmed far faster than anyone predicted. Science always has some uncertainties, but that can mean “worse than predicted” as least as often as it is “not so bad”. Since scientists are generally very cautious about predictions that they know will be unpopular, “worse than predicted” is usually the best bet.
A warmer arctic seems to make a weak jet-stream more common. A weak jet-stream can no longer plough its way through existing weather patterns, meaning that these patterns last a lot longer than normal. Specifically, Western Europe and Britain especially get prolonged bouts of flooding, drought, unusual heat and unusual cold. These might average out to something not so different from the weather we know, but that’s not the main point.
“The jet stream, as its name suggests, is a high-speed air current in the atmosphere that brings with it the weather. It is fuelled partly by the temperature differential between the Arctic and the mid-latitudes. If the differential is large then the jet stream speeds up, and like a river flowing down a steep hill, it ploughs through any obstacles – such as areas of high pressure that might be in its way.”
“If the temperature differential reduces because of a warming Arctic then the jet stream weakens and, again, like a river on a flat bed, it will meander every time it comes across an obstacle. This results in weather patterns tending to becoming stuck over areas for weeks on end. It also drives cold weather further south and warm weather further north. Examples of the latter are Alaska and parts of Scandinavia, which have had exceptionally warm conditions this winter.”[v]
And the cause? It was long ago predicted that Greenhouse Gases would cause a general warming trend, plus more weather extremes. Climate models showed most of the world getting warmer but a few areas getting colder. Climate models are not yet powerful enough to predict in detail how weather patterns would shift or which climate extremes would actually happen. But it was overwhelmingly likely that things would get worse.
All of this was bad news to the rich, because a fix would cost money that the rich would rather spend on themselves. It would also damage their general view of themselves as Heavenly Creatures, beings far above the “plebs”[vi] and in control of the world. It would be convenient to say “the fault lies in our local star, not in ourselves”. But it would also be amazingly foolish, since the changes that we see are the sort of thing that was predicted, whereas many attempts have failed to prove a reliable link between minor changes in the sun and the weather here on Earth.
Yes, the sun is behaving slightly oddly. But it’s moot if this matters. The best guess is that it has had a slight cooling effect, to set against the overall warming. Which means things will get even worse if the sun gets back to normal.
All of this impacts directly on the issues of Fracking and Shale Oil. New techniques suggest that the Age of Petrol could be extended for a few more decades, if the issue of Greenhouse Gases could be ignored. This would suit the New Right, whereas an acceptance that we mostly cause our own bad weather would suggest global regulation and less choice for private capital. And there are billions to be made from Fracking and Shale Oil, if governments allow them to be freely developed.
There seems now to be a party split on the issue within Britain:
“In 2012, Cameron sacked a green energy minister, Charles Hendry, and appointed a climate change skeptic, Owen Paterson, as environment secretary. Where being green had once been a defining mission, for Cameron and others it had become a financial burden and a source of party division. Last year, Cameron was said to have been wandering around Downing Street talking of his wish to be rid of all this ‘green crap'”[vii].
“Miliband says: ‘In 2012 we had the second wettest winter on record and this winter is a one in 250-year event. If you keep throwing the dice and you keep getting sixes then the dice are loaded. Something is going on.'”[viii]
This comes on top of a reluctance to spend money allowing for future floods. Labour is not innocent on this matter, but the Tories have definitely been worse.[ix] Traditional Tory heartlands are among the worst hit, but the Tory leadership was long ago captured by people tied to finance and committed to shrinking the state. It is no longer an authentic conservative party, it is a party run by the rich for the rich, though with traditional conservatives still attached to it.
Current estimates say there is a three-to-one chance of a major El Nino event this year, meaning a hot summer almost everywhere. We’ll have to wait and see about that. Even if we get lucky on that one, more and more extremes are going to become the new normal.
Ukraine – give them democracy even if it kills them
Representative Democracy is only one of several possible democratic systems. It works very badly when the society is split on ethnic or religious lines.
“Roughly speaking, about four out of every six people in Ukraine are ethnic Ukrainian and speak the Ukrainian language. Another one in six is ethnic Russian and speaks Russian. The last one-in-six is ethnic Ukrainian but speaks Russian…
“President Yanukovych is from the eastern, more Russian part of the country, where he served as a regional governor for several years. In 2010, 74.7 percent of Kievans voted for Yanukovych’s opponent; it’s not shocking that they would want him to leave office.”[x]
What is shocking is that the hard-line Ukrainian Nationalists see no need to compromise with large minorities of ethnic Russians and Russian-speaking Ukrainians. A reasonable compromise was proposed on Friday 21 February, which would have led to early elections. Elections might have exposed the weakness of the opposition, the fact that it is just an opposition and might well have started quarrelling with itself in a fair electoral contest. And it would certainly have reduced the power of the activists occupying the centre of Kiev. These include people who identify with Ukraine’s fascist past. (Home-grown, but willing allies of the Nazi invasion.)
Note also that a “peaceful demonstration” is one in which you demonstrate and then go home. Occupying a large public space and demanding the government resign is something else, an unarmed revolution. When these same demonstrators refuse all compromise, this leaves the government with two rather nasty alternatives – use massive force, or surrender to a movement that may not represent the majority in the nation as a whole. (Capital cities were historically more radical than the rest of the country. But Leninist and ex-Leninist countries have mostly been much more pro-Western, part of globalisation and indifferent to globalisation’s victims.)
Before the Orange Revolution of 2004, Ukraine showed some signs of following the Russian example and stabilising itself. President Leonid Kuchma was getting there, and the Ukrainian presidential election of 1999 was the only one that broke through the polarisation, with both Kuchma and the rival Communist Party candidate bridging the east-west divide.[xi] Kuchma was in favour of closer ties with the European Union, as well as good relations with Russia. But scandals including allegations of ordering the murder of a journalist destroyed him and re-polarised the country. It’s been a mess ever since, one that could easily lead to the same pattern as Former Yugoslavia, a mix of fragmentation and ethnic cleansing. The pro-Western elements are refusing to recognise that Russian-speakers have any rights at all, making Ukrainian the only official language. Which contrasts with actual West-European practice, where many states have multiple official languages to accommodate existing minorities.
The aftermath of the Orange Revolution showed a familiar pattern – the New Right and its agents are good at destabilising and destroying, rather bad at creating anything new. That’s why Yanukovich was elected in 2010. He had been Kuchma’s Prime Minister, was the target of the Orange Revolution, but won decisively in 2010 against Tymoshenko, who had senselessly quarrelled with her former ally Yushchenko. Tymoshenko alleged vote rigging, as in 2004, but was not believed. But then she was jailed for corruption, probably at the instigation of Yanukovich, and that was a fatal error. Functional systems of Representative Democracy never jail the actual representatives of large parts of the population, regardless of what they may have done. Only if they can be cut off from their support-base do they become vulnerable, and even then most of them escape jail. It’s not what you’d be taught in US-funded education programs, but it is the observable reality, especially in the USA. (The notorious Boss Tweed was an exception in actually going to jail, and even this happened only after many of his former supporters had rejected him.)
The current position is an on-going car-wreck. At the time of writing, a “unity” government has been postponed to Thursday 27th. It may not happen at all. Meantime Crimea is definitely thinking about seceding. It has been separate from Ukraine for most of its history, first part of the Ottoman Empire and then taken by the Tsars, but mostly ruled as part of Russia. It was given to Ukraine in 1954 without any consultation, at the whim of Nikita Khrushchev, and contains a major Russian naval base at Sevastopol.[xii] A sensible Ukrainian Nationalist might be glad to be rid of it, but the West is probably targeting it as a way to weaken Russia globally.
As in Former Yugoslavia, Western politicians are likely to create a devastation and call it someone else’s fault.
USA – Divided They Fall
Trade Unions have always been a civilising force within the working class. The weaker the Trade Unions, the lower the level of civilisation. And sadly, large parts of the US working class remain attached to an asocial vision of society, especially in the US South and Midwest. (The movie Silkwood about workers in a US plant processing nuclear materials is worth watching for several reasons, including a good picture of such people.)
The USA is still fighting old battles, campaigns that were once liberating but are no longer relevant, state power exercised overtly by an aristocratic elite. The new elite is much cleverer and manipulation and careful not to be seen as aristocratic. And far too many ordinary whites identify with this white elite and concentrate on distancing themselves from non-whites. And Afro-Americans, at least, share the asocial vision of the poorer whites, though they naturally do so on the basis of different cultural values.
This explains the sad defeat of Trade Union organisation at a Volkswagen car plant in the southern state of Tennessee. It was close, 712 to 626 with an 89% turnout, but it is a clear setback.[xiii] And it ended the immediate prospect of the USA seeing worker representatives on the board, a German pattern that might have been extended there.
Ordinary US citizens are a bunch of sheep who’ve been persuaded that they are actually lions and tigers and bears. Many of them showed great resentment at being saved by Roosevelt’s New Deal. A relatively minor crisis in the 1970s was an excuse for going back to methods that had failed before. And have now failed again in much the same manner, except that this time round, the state rescued the financial institutions.
China Still Running Smoothly
Chinese banks have a balance-sheet that would be disastrous for a Western bank, full of bad debts. But it is all internal. China has avoided foreign debts, so while it has competent political leadership, it is in no sort of trouble.
The latest issue of Prospect saw an interesting article from someone who deals with the realities of doing business in China. Who knows that it is very different from the Western system and is very far from capitalist in the normal sense of the term:
“Another reason to be cautiously optimistic about China’s ability to bring about internal change is that its centrally-run economy has longer planning cycles than those of western democracies where politicians face elections every four or five years at most. New policies are often tested first in one or two cities or provinces. In the late 1970s, Deng Xiaoping took the first steps towards China’s unique form of socialist capitalism with the creation of a special economic zone across the border from Hong Kong in Guangzhou province—a measure that ultimately led to the transformation of a small village into a ‘Tier 1’ city, Shenzhen, that is now home to more than 10m and is one of China’s leading technology hubs. The technique continues today with the creation of a new free trade zone in Shanghai. If these experiments are successful they get rolled out across the country but if they are not they are quietly dropped (such as the trials of mobile telephone number portability which have not been extended nationwide). This approach reduces the risks of reform.”
“In my view, China has very competent leaders especially at the centre. The long road to the top, usually by way of positions in different provinces, means that only the best survive, although the technocratic focus means you don’t need charisma to get there. This has produced a very capable current leadership team which is acutely aware of the challenges that China faces. Leaders are generally loath to make the mistake they believe Mikhail Gorbachev did in Russia by not letting economic reform precede political reform. The Standing Committee of seven, the core of the leadership, is drawn from the 25 members of the Politburo; this current committee could be called politically conservative while economically liberal. However, Xi Jinping’s ascent to the top was not without hiccups and the few weeks before last year’s Standing Committee meetings saw major rivalry between different factions. His challenge now is that a failure to reform will significantly increase social tensions, particularly among the new middle class.”
“Reform means tackling some of the biggest vested interests in local governments and state owned enterprises. Xi’s supporters took most of the places on the Standing Committee last year, and that power may explain the extent of the reform plans revealed in November. He may not be in such a favourable position four years from now when five of the committee members change (only his position and that of the Premier Li Keqiang continue for the full 10 years). Xi has spent his first year in office consolidating his political power. He has taken full control of the military and very recently announced that he will set up a National Security Council in China for the first time, something that previous leaders have tried to do without success. He holds more power than his predecessors—one reason why I believe the current leadership now has a good chance of pushing through reform.”[xiv]
Leaders are selected for their talents at getting things done, rather than fooling the electorate and maybe shifting the blame for their mistakes. That seems a sensible explanation for China’s success. But then you find a curious criticism:
“One advantage Xi has today is that the middle class in China is generally optimistic about its future and loyal to the party, although this could change if the economy deteriorates. The attitude of successful and wealthy entrepreneurs is different, however; many can’t wait to get part of their wealth outside China and a number want to emigrate, although sometimes this is driven by their children’s education. The fact that the elite has less faith in the future than the rest of society is definitely worrying.”[xv]
The elite does not have the same privileges that it has in most of the world, which have been added to since the 1980s. But elites are highly replaceable – most of them have done their best work before they become rich and famous.
After numerous warnings of doom, the Sochi Winter Olympics have ended up as a considerable success for Russia. A demonstration that the place is still strong and competent.
If it cost a lot, it has been an extremely good investment. Reputation counts for plenty in the modern world.
It’s also noticeable the criticism on the BBC faded a lot after Britain won a few medals. But the greatest haul went to Russia, an improvement on their performance in previous Winter Olympics.
The USA is in many ways different from other Western or Westernised societies, mostly in bad ways. More unequal, jails far more of its citizens, spends an absurd amount on armaments etc. You can find a nice set of graphics on the matter at [http://filipspagnoli.wordpress.com/2014/02/25/10-ways-in-which-the-us-is-exceptional-and-wishes-it-wasnt/]
You’d make yourself pretty unpopular in Britain if you suggested that Britain should have made peace with Hitler in 1940 after the Fall of France. This despite Hitler’s wish to preserve the British Empire if it would accept him as ruler of Continental Europe.
In the case of Russia, Hitler was out to destroy Russia as an entity, not just its Communist regime. And the Siege of Leningrad was second only to Stalingrad in stopping the invasion and reversing the tide. So I’m not in the least surprised that ordinary Russians were enraged when someone asked whether it might not have been better for Leningrad to have surrendered and avoid the sufferings of its prolonged siege. Or that this public anger caused the closure of a minor dissident TV channel. Most Russians have anyway stopped being sympathetic to dissidents, after the Yeltsin years showed that it was easier to criticise than to rebuild.
The Guardian however chose to see it as an outrage, publishing an article entitled “Russia today is like a lost chapter from Orwell”.[xvi]
“Just a question”, people say. OK, try asking “do you agree or disagree with Hitler’s policy towards the Jews“. It would never be tolerated, and fair enough, but it is really no more outrageous. Or you could see the reaction in the USA if you asked “did Imperial Japan have strong justification for their attack on Pearl Harbour”? Which in fact they did, with the US sanctions threatening to destroy their economy, but it would certainly not be popular.
The Western strategy of trying to make the Russians ashamed of their own history has basically failed. But the media somehow fail to notice this.
It will be interesting to see how the media handle the 100th anniversary of the immediate cause of World War One, the assassination of the Archduke Ferdinand (and also his wife). They got away with demonising the Serbian claim to Bosnia- Herzegovina in the 1990s. But exactly the same claim was behind the assassination. The specific issue on which the war began was Austria-Hungary’s desire to investigate whether this was state-sponsored terrorism, which was an eminently plausible suspicion. This was the point on which Serbia refused to yield, which suggests that those suspicions were correct.
More widely, Germany had excellent reasons to suppose that the alliance between Republican France and Tsarist Russia that began in 1892 was aimed at them. It was a tie-up between the most progressive and least progressive large states in Europe, an alliance that made no sense unless the aim was to attack and weaken Germany, allowing France to recover Alsace-Loraine and Russia to advance through the Balkans and take Constantinople, core of Orthodox Christianity. (It was in no sense defensive, since German had already taken from France the territories it considered part of Germany, and had no territorial claims against the Tsarist Empire.)
But why did Britain join in? For many years, there had been a growing view among the elite of the British Empire that Germany was the main immediate threat to British global hegemony. But this did not much concern ordinary Britons, who by the early 20th century had become sufficiently powerful to stop a war they disagreed with. This explains the otherwise baffling ambiguity over Belgian neutrality when a Franco-German war began to seem likely.
A definite statement that a march through Belgium would bring in Britain against Germany would probably have persuaded them to use some other plan, or perhaps avoid war completely. The fact that it was all left vague until Germany was committed suggests that it was just a pretext.
“According to the stock market, the UK economy is in a boom. Not just any old boom, but a historic one. On 28 October 2013, the FTSE 100 index hit 6,734, breaching the level achieved at the height of the economic boom before the 2008 global financial crisis (that was 6,730, recorded in October 2007).
“Since then, it has had ups and downs, but on 21 February 2014 the FTSE 100 climbed to a new height of 6,838. At this rate, it may soon surpass the highest ever level reached since the index began in 1984 – that was 6,930, recorded in December 1999, during the heady days of the dotcom bubble.
“The current levels of share prices are extraordinary considering the UK economy has not yet recovered the ground lost since the 2008 crash; per capita income in the UK today is still lower than it was in 2007. And let us not forget that share prices back in 2007 were themselves definitely in bubble territory of the first order.”[xvii]
Thus speaks noted South Korean economist Ha-Joon Chang. He expects a crash soon, saying “most investors know that current levels of share prices are unsustainable; it is said that George Soros has already started betting against the US stock market. They are aware that share prices are high mainly because of the huge amount of money sloshing around thanks to quantitative easing (QE), not because of the strength of the underlying real economy. This is why they react so nervously to any slight sign that QE may be wound down on a significant scale.”
I’m not sure it will end in such a crash. Perhaps he’s still too orthodox, over-estimating the power of market forces and under-estimating the state. While Western governments are allowed by the electorate to squeeze ordinary people to preserve the wealth of the rich, the situation remains stable. The current leaders know that a crash would probably mean the end of their values and their hegemony. In the absence of popular rejection of their values – which has yet to happen – they have every reason to carry on.
[iv] I’ve shown the change since the start of the last decade. Figures only start in 1820. I took the average of 1830 and 1850 for Germany 1840, since no figure was given.
[vi] It’s disputed whether a Tory minister said “plebs” during a famous argument with police outside of Downing Street. But not disputed that he used the term on other occasions.
[xii] [http://english.pravda.ru/history/19-02-2009/107129-ussr_crimea_ukraine-0/] & [http://www.themoscowtimes.com/opinion/article/forget-kiev-the-real-fight-will-be-for-crimea/495145.html]