2017 09 – Newsnotes

Notes On The News

by Gwydion M Williams

It’s the Mixed Economy, Stupid

“The long-term structural defects that brought us the Great Recession and lackluster recovery haven’t gone anywhere…  Our economy’s structural problems have plagued the post-2008 recovery…

“America still hasn’t recovered the output it was on pace to produce before the last recession — a failure without precedent in the postwar era.

“Between 1947 and 2007, the American economy fell into recession ten times. During each of these downturns, America’s GDP — the total value of goods and services produced by the economy — dipped far below the level it had been on pace to reach before the hard times set in.

“But none of those recessions permanently reduced our economy’s productive capacity. And so, when the recovery arrived, America always enjoyed a period of accelerated growth that allowed it to reach — and exceed — its pre-recession potential.

“Eight years after the Great Recession ended, we’ve yet to catch up. In fact, growth rates in the recovery’s first years were actually below the pre-crisis average…We’ve yet to enjoy a genuine boom. As a result, the gap between our GDP and the level that we were on pace to achieve before the crisis is larger today than it was in 2010.”[A]

What matters more is that government intervention after the 2008 crisis has been fine-tuned to keep the wealth wealthy.  To dump suffering on the middle class, as well as the poor. Or you can think it an amazing coincidence that it benefited the people who have dominated the USA since the 1980s.  Who helped create New Labour and the Clinton Democrats, to give us more of the same when the public wanted a change. The rich have been well looked after.[B]  They have used privately-owned media and political donations to get governments elected that look after the rich at the expense of the general public.043 Inequality in the USA

But how was this possible?

From the 1940s to the 1970s, the dominant view was that the West was no longer capitalist.  That it had become something quite different, a Mixed Economy.  Foolishly, the left mostly rejected this.  Put vast efforts into convincing people that what they had was still Wicked Old Capitalism.  Thatcher and Reagan agreed that it was ‘Wicked Old Capitalism’.  Or rather, Virtuous Old Capitalism that socialist foolishness had burdened and damaged. The Mixed Economy never in fact ended.  But in the West it became a kind of ‘Secret Vice’: the squalid reality behind the rhetoric of Imaginary Capitalism.

This was never the case in the Asian Tigers, nor in People’s China when it opened up after Mao. But rather than being noted as proof of the merits of a Mixed Economy, it gets sneered at as Crony Capitalism.[C] Crony capitalism looks after the general public, so that they will tolerate its corruption.  The New Right persuaded the public that pure market forces would be honest, decent and good. Less and less people now believe this.  But too many Britons still see Big Government as the problem.  In the USA, this is the dominant view.[D] The USA is a rich country that makes itself unhappy by believing in greedy freedoms.  ‘Substance abuse’ including alcoholism is widespread among people who once were content with much less.[E] If their Christianity were more serious, they would know better. Time to tell people that they have been fooled by sophisticated propaganda.  Conned by a conservative pose by those who just looked after the rich.

 

And in China…

Economic experts on China:

  1. China is succeeding, because it abandoned socialism for capitalism.
  2. China faces looming disaster, because it has not abandoned socialism.

How they can believe both of these things is unclear. If indeed they believe.

The rich make sure that economists are nicely looked after if they stay ‘on message’. A Swedish bank got Swedish academics to create a new Nobel Prize for Economics.  Academics need funding, but only the rich have been smart enough to take advantage.  Invent a nice-sounding prize for people whose dogmas put money in the pockets of the rich.

Mostly they believe their own stuff.  It was otherwise careless for The Economist to say:

“The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.”[F]

The average US worker gets slightly more than 7 times the pay of their Chinese equivalents.  The Big Bosses gets 221 times as much.[G]  A Chinese boss gets 7.3 times their country’s average.  Their US equivalent gets 430 times as much.  And that’s ignoring the cheaper price of most Chinese goods.

China’s not ideal.  But is utopian compared to the post-1980s USA. Of course Chinese expect their government to look after them.  While it does so, almost all of them are content to have limits on their choice of candidates and their right to criticise. In Western Democracies, we have the cherished liberal formula of Free Press – mostly owned by the rich.  A free choice of candidates who need massive funding, with the rich as the simplest source.

Of course competitive multi-party democracies can work well.  The USA moved from Classical Capitalism to the Mixed Economy in the 1930s, and grew much faster than ever before.  The system worked. Elections can also play on fears and get people voting against their own best interests.  Accepting false promises of liberation though greedy freedoms. The New Right did not in fact end the Mixed Economy.  They wanted to, but bumped up against the reality of Classical Capitalism being unable to deliver acceptable results.  But with US citizens terrified of Big Government, they can still rig the system to give most of the benefits to the rich.

 

Deadly Weather

2017 is shaping up as another record-breaking year. Climate Denialists pin their hopes on small imperfections and uncertainties in the broad forecasts of Climate Change.  Small parts of the data are imperfect – therefore it is entirely safe to proceed as if nothing much will happen. The chances of the doom-sayers being broadly wrong are absurdly small.  To date, actual events have been worse than most gloomy warnings from qualified climate scientists.  And since 1980, the decade-by-decade trend has been amazingly clear.

044 Global Warming

Worse, much of the Indian Subcontinent could end up uninhabitable if the trend continues:

“While the normal temperature inside our bodies is 37C, our skin is usually at 35C. This temperature difference allows us to dissipate our own metabolic heat by sweating. “However, if wet bulb temperatures in our environment are at 35C or greater, our ability to lose heat declines rapidly and even the fittest of people would die in around six hours.

“While a wet bulb 35C is considered the upper limit of human survivability, even a humid temperature of 31C is considered an extremely dangerous level for most people…

“Wet bulb temperature would approach the 35C threshold ‘over most of South Asia, including the Ganges river valley, north eastern India, Bangladesh, the eastern coast of China, northern Sri Lanka and the Indus valley of Pakistan’.

“According to the scientists, around 30% of the population is projected to live in a climate characterised by a median of the maximum annual wet bulb temperature of 31C or more. At present, the number of people facing this level of threat is essentially zero.”[H]

Land inhabited by 30% of the human race may become uninhabitable within three generations.  So where would they go? Too many people are gambling on the very remote chance that at least 90% of qualified experts will turn out to be massively wrong.  A very poor bet.

 

Our Weather, Their Weather

The hurricane and floods in Texas are indeed tragic.  But why do the BBC and most other global news services treat its suffering as special? As at 29th August, Hurricane Harvey has caused flooding in Texas and killed eight – ENORMOUS NEWS FOR SEVERAL DAYS.

The same hurricane killed one person in the Guyana.  Barely counts as news.[I] 12 people were killed in China by Typhoon Hato: barely news.  The BBC relegated it to its on-line China section.[J]  Treating Britain as a dependency of the USA, they report the tragic plight of the poor Texans, and ignore much needier people elsewhere.

Only the Chinese global news services gave equal weight to the two disasters. Note that ‘hurricanes’ and ‘typhoons’ are two names for the same thing.

 

Hail to Robert E. Lee, Who Got the South Broken and Slaughtered

The US Civil War began in 1861 – Lincoln was elected in 1860, but did not take office for several months.  Secession in the Deep South happened before he was in office, spoiling his hopes that he could reassure them by mild use of the limited powers he had as President.

The war might have ended in 1862 if the Confederate capital Richmond had been captured.  Might have happened had Lee accepted Lincoln’s offer to give him command of the Union forces. Likewise if he had done nothing – he was 54, too old for ordinary service.

What actually happened was that Lee took over when the general in charge of defending Richmond was killed by a stray shell.  He reversed the Union advantage.  He kept the war going till 1865, causing enormous suffering.

Lee by 1864 should have seen that the war was lost.  Gettysburg had ended indecisively.  The Confederacy was losing its men of military age.  Their best hope was Lincoln being voted out in the election of 1864.  This failing, Lee should have said the war was lost.  He kept it going until Richmond fell and his own army disintegrated.

In the abstract, Lee was against slavery.  But actions speak louder than words.  This was shown when he ran the Arlington Estate, which his wife inherited: “In 1857, his father-in-law George Washington Parke Custis died, creating a serious crisis when Lee took on the burden of executing the will. Custis’s will encompassed vast landholdings and hundreds of slaves balanced against massive debts, and required Custis’s former slaves:

to be emancipated by my executors in such manner as to my executors may seem most expedient and proper, the said emancipation to be accomplished in not exceeding five years from the time of my decease.’”[K]

The inheritance was in disarray.  Poorly managed and losing money. Lee chose to keep the slaves as slaves for the full five years – the most he could manage without actually breaking the law.  And he worked them as hard as he could.  It was a scandal at the time.  The New York Tribune in 1859 printed a letter on it:

“They have been deprived of all means of making a little now and then for themselves, as they were allowed to do during Mr. Custis’s life, have been kept harder at work than ever, and part of the time have been cut down to half a peck of unsifted meal a week for each person, without even their fish allowance. Three old women, who have seen nearly their century each, are kept sewing, making clothes for the field hands, from daylight till dark, with nothing but the half-peck of meal to eat; no tea or coffee — nothing that old people crave — and no time given them to earn these little rarities, as formerly. One old man, eighty years old, bent with age, and whom Mr. Custis had long since told ‘had done enough,’ and might go home and ‘smoke his pipe in peace,’ is now turned out as a regular field hand. A year ago, for some trifling offense, three were sent to hail, and a few months later three more, for simply going down to the river to get themselves some fish, when they were literally starved.

“Some three or four weeks ago, three, more courageous than the rest, thinking their five years would never come to an end, came to the conclusion to leave for the North. They were most valuable servants, but they were never advertised, and there was no effort made to regain them which looks exceedingly as though Mr. Lee, the present proprietor, knew he had no lawful claim to them. They had not proceeded far before their progress was intercepted… They were lodged in jail, and frightened into telling where they had started from… Transported back, taken into a barn, stripped, and the men received thirty and nine lashes each, from the hands of the slave-whipper, when he refused to whip the girl, and Mr. Lee himself administered the thirty and nine lashes to her. They were then sent to Richmond jail, where they are now lodged.”[L]

Oppressing the old, whipping a woman when even a regular slave-driver would not – a noble character?  And Lee had other options.  His family had inherited a lot of land.  He could have sold some, freed the slaves and bought others who had not been promised freedom.

It wasn’t exactly racism: he was even more ruthless with the lives of his own soldiers.  But after the war he kept a deafening silence about the Klu Klux Klan.

Lee and the Klan both accepted that secession had failed, but keeping down the negros could still work.  The Klan used mass intimidation.  Lee said nothing and prepared young Southern gentlemen to work within the system they had failed to escape from.

Arlington was seized by the Federal Government, by the legal trickery of refusing to accept taxes demanded unless Confederate General Lee came and paid them in person: his wife was not allowed to.  Correctly doubting that this would hold, they buried black soldiers there to lower its desirability. By an historic curio, it gradually evolved into the highest-status cemetery in the USA.

***

Don’t be confused about the reasons for the war.  The immediate issue was secession.  But Lincoln provoked it by promising he would keep slavery out of the Territories, the lightly settled land run directly by the Federal Government.  He claimed no right to forbid states within the Union to keep slaves.  The USA began with slavery legal.  The ‘glorious’ Constitution had rules for returning fugitive slaves.

For Lincoln, seceding states had forfeited their rights.  But he waited till 1863 before liberating slaves there.  Sought a deal with non-seceding slave states that would have seen slavery lasting till 1900. I agree it might have been better if the USA had broken up.  But very few governments allow secession unless they find a territory ungovernable.  Yeltsin broke up the Soviet Union because Gorbachev was still its boss.  Nice democratic India will not allow self-determination to Kashmir, nor Spain to Catalonia.  Britain fought viciously to retain Ireland.

Removing Lee’s statues was an intolerant act.  But for all their loud talk about Freedom, intolerance is normal for the USA.  The real belief is ‘Anything I Don’t Like, Isn’t Freedom’.

US culture is slow to change.  Removing Confederate statues repudiates the racist and slave-owning past.  It is intolerance for a good cause.  Helps uproot the covert racism that the Republicans have catered to ever since Nixon.

 

Snippets

Blair Almost A Trotskyist

“Tony Blair has said that he ‘toyed with Marxism’ as a young man after being inspired by a biography of Leon Trotsky that detailed ‘extraordinary causes and injustices’.

“The former prime minister, who rebranded his party ‘New Labour’ in the belief it would be most electable as a centre-ground party, said yes when asked in a BBC interview if he was ‘briefly a Trot’.”[M]

It was Toy Marxism that he toyed with.  No serious politics has ever resulted from seeing Stalin as much different from Lenin.  Or Lenin as much different from Marx.

***

The Rights of Mutilators

“Tory ministers boasted of ‘cutting red tape’ as they relaxed regulations on selling dangerous acids – a change campaigners say could have made recent attacks more likely.”[N]

Human civilisation depends on rules that fools will call ‘red tape’.  Some regulation are bad.  Many more are wise or necessary.

The only other way for real humans to live is tribalism.  Few tribalists act as free individuals.  Most cannot even think of going outside of tribal customs.  The few who dare are often murdered or driven out.

***

A Right to Die, a Right to Live

“In 1990, before it was legal [in the Netherlands], 1.7 percent of deaths were from euthanasia or assisted suicide. That rose to 4.5 percent by 2015. The vast majority — 92 percent — had a serious illness and the rest had health problems from old age, early-stage dementia or psychiatric problems…  More than a third of those who died were over 80.”[O]

If I were in pain, demented or could not live a meaningful life, I would like legal access to an easy exit. But I also take the point that unwanted old people could be pushed into being cheaply and conveniently dead.

Why not create a separate bureaucracy: an Office of Defenders of Life.  Give it the right and obligation to check each case.  See that no one gets pressured or bullied.  Give it funding to help some of them resume enjoyment of life.

More Tax-and-Spend and Big Government, out of fashion since the 1980s.

***

Dunkirk and the White Persons of Dover

Dunkirk is the best war film I’ve ever seen.  But has its flaws:

“It erases the Royal Indian Army Services Corp companies, which were not only on the beach, but tasked with transporting supplies over terrain that was inaccessible for the British Expeditionary Force’s motorised transport companies. It also ignores the fact that by 1938, lascars – mostly from South Asia and East Africa – counted for one of four crewmen on British merchant vessels, and thus participated in large numbers in the evacuation.

“But Nolan’s erasures are not limited to the British. The French army deployed at Dunkirk included soldiers from Morocco, Algeria, Tunisia and other colonies, and in substantial numbers. Some non-white faces are visible in one crowd scene, but that’s it.”[P]

***

Websites

Previous Newsnotes can be found at the Labour Affairs website, https://labouraffairsmagazine.com/past-issues/.  And at my own website, https://longrevolution.wordpress.com/newsnotes-historic/.

 

References

[A]              http://nymag.com/daily/intelligencer/2017/08/the-trump-economy-is-a-gilded-mediocrity.html

[B]              https://www.nytimes.com/interactive/2017/08/07/opinion/leonhardt-income-inequality.html

[C]              See https://gwydionwilliams.com/48-economics/replacing-capitalism-by-capitalism-the-new-rights-muddled-ideas/

[D]              http://www.gallup.com/poll/201629/americans-big-government-top-threat.aspx

[E]              https://www.vox.com/policy-and-politics/2017/8/10/16124938/study-alcoholism-addiction-epidemic

[F]              https://www.economist.com/news/finance-and-economics/21725293-outperformed-private-firms-they-are-no-longer-shrinking-share-overall (subscription site)

[G]              https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita.  If you use Purchase Parity, what you can actually buy, the gap between ordinary Chinese and US workers is closer.

[H]              http://www.bbc.co.uk/news/science-environment-40793019#

[I]               https://en.wikipedia.org/wiki/Hurricane_Harvey

[J]               http://www.bbc.co.uk/news/world-asia-china-41033428

[K]              https://en.wikipedia.org/wiki/Robert_E._Lee#Late_1850s:_Arlington_plantation_and_the_Custis_slaves

[L]              http://fair-use.org/new-york-tribune/1859/06/24/some-facts-that-should-come-to-light

[M]             https://www.theguardian.com/politics/2017/aug/10/blair-reveals-he-toyed-with-marxism-after-reading-book-on-trotsky

[N]              http://www.independent.co.uk/news/uk/politics/government-acids-acid-attacks-deregulation-act-conservatives-poisons-board-a7856041.html

[O]              http://www.catholicherald.co.uk/news/2017/08/03/euthanasia-responsible-for-4-5-per-cent-of-deaths-in-the-netherlands/

[P]              https://www.theguardian.com/commentisfree/2017/aug/01/indian-african-dunkirk-history-whitewash-attitudes

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