2018 10 – Newsnotes

Notes On The News

by Gwydion M Williams

New Labour – the Timid Tendency Fades

Chuka Harrison Umunna could easily have been Britain’s first non-white Prime Minister.  He’s a man of singular origins, with a Nigerian father from the Igbo people.[A]  On his mother’s side, his grandfather Sir Helenus Milmo came from Catholic Ireland, but was a wartime member of M15.  On the prosecution team at the Nuremberg trials.

The similarity to Barack Obama was noted in 2015.[B]  But the world changed, and he failed to change with it.

I’d suppose he thinks the elite know what they’re talking about.  Fails to grasp the significance of the 2008 crash. Or how little they ever knew: only clever at working a system whose deep logic they misunderstood.

The Centre-Left in 2008 could have said that the wonderful Mixed Economy system that they created in the 1940s had been foolishly twisted by Reagan and Thatcher.  Said ‘throw out the New Right deviation from Common Sense’.

Why was something so simple and natural beyond them?

Most began as naïve leftists, thinking that ‘capitalism’ would soon be replaced by socialism.  When this failed in the 1980s, they lost confidence.  They decided that ‘capitalism’ must be obeyed under all circumstances.

They also didn’t understand real economics, based on work and knowledge.  Were overawed by a mass of pseudo-science that has infested it.  That has been dignified by a ‘Nobel Prize’ that a Swedish bank purchased for just that purpose back in 1968.

This ‘science’ has been bad at predicting anything useful.  It ignores the awkward fact that people in a market often make massive errors.  That ‘sharp operators’ can easily fool them.

Amazingly enough, a ‘science’ that starts from a dogmatic belief that markets are perfect ends up ‘proving’ that markets are perfect.  Repeats a trick used by Adam Smith in The Wealth of Nations: if you can’t prove what you want to argue, pretend it’s true and hope that no one notices.[C]

‘Garbage In, Garbage Out’ is a phrase used in Computer Science.  Sometimes elsewhere.

Not often enough.

It should have been glaringly obvious in 2008 that New Right promises had failed, if they were even sincere.  The substance was a gigantic grab for wealth by a more-than-millionaire class.  People who never believed in the official line about state power being ineffective.  They had enough of a grip on politics to ensure that banks that should have crashed were bailed out, but not permanently nationalised, nor mostly broken up.  Given cheap credit under the meaningless buzz-word Quantitative Easing, but not required to lend it on to small businesses facing ruin.

Obama was persuaded that money given to giant banks mysteriously multiplied to generate extra wealth.  This was a garbled version of Fractional-reserve banking, in which banks lend out a lot more money than they possess in terms of real wealth.  This only works for as long as major depositors in the bank think their money is safe despite the bank being over-extended.

Because banks had to reassure rich depositors that their bank would not crash, they hung on to the sound money the state had given them.  They ignored the needs of struggling small business that would not look like a good asset to super-rich experts checking the balance sheet.

A state can also invent money that it does not possess – that does not match the real material wealth of the society.  But people with vast sums to use for speculation will downgrade the currency of any state they see doing this.  So states chose austerity, to satisfy the very rich.

An alternative was to prevent currency speculation.  China has continued to do this, despite being warned against it by the experts.

The West continues to suffer, and to trust those ‘experts’.  Didn’t notice that such expertise as they had is just about advising a greedy more-than-millionaire class about how to flourish while others suffer.

A return to the successful economic balance of the 1950s and 1960s was possible.  There was no longer the problem of militant trade unions, which blighted the 1970s and might alternatively have been resolved by extended Workers Control.  But both New Labour and the Clinton Democrats felt they had to obey the well-paid servants of a global more-than-millionaire class.  That’s why I call them the Timid Tendency.  They had an open goal and they missed it.

They did do a lot of social liberalisation, which the business and financial elite mostly wanted.  Which Tories had to drag their heels on, needing the votes of genuine conservatives.  It has been useful – but nothing like enough.

Chuka Umunna himself rose with Ed Miliband, who lost the 2015 General Election by remaining overawed by the Tories.  In 2015, Umunna was a serious candidate for leader, but withdrew for reasons that remain puzzling.[D]  But when that election unexpectedly gave victory to Jeremy Corbyn, he treated it as a blip and kept his distance.  Continued to believe this after the 2017 General Election, even though Labour under Corbyn made its first increase in seats since 1997.  Got almost as many votes as Blair with his first re-election.

Umunna has now ‘burnt his boats’ with Labour:

“Labour MP Chuka Umunna has accused leader Jeremy Corbyn of driving centre-left MPs like himself out of the party.

“The MP – a leading member of the cross-party People’s Vote for a second EU referendum – urged Mr Corbyn to ‘call off the dogs’.

“In a speech, the MP said so-called moderates face a ‘clear and present danger’ of being run out of the party by hardline factions.”[E]

But it was long-standing Labour activists who voted in Corbyn.  Most of the 400,000 new members are not conventional leftists.

Umunna fails to see that Corbyn is a return to the normal, after a generation of New Right aberrations.  Right-wing governments that did very little while 1960s radical ideas triumphed socially.  Helped a more-than-millionaire class engross most of the society’s increasing wealth, generating a dangerous Hard-Right populism in response to their failures.

Rumour has it he hopes to lead a new Centre party.  Unlikely to be called ‘Biafra’, the name of the tragic failed secession from Nigeria that his father’s people were responsible for.  But under any name, it is unlikely to flourish.  The big gainers are either renewed anti-capitalist leftists or the racist and anti-immigrant right.

If he had had the sense to line himself up with the successful Labour-Right tradition of Attlee and Ernest Bevin, he could have had a grand career, and been a plausible successor to Corbyn.

The same option is open to other Labour MPs who have not so far insulted the membership.  The recent Conference shows Labour back on track.  A supposed acute problem with anti-Semitism vanished as mysteriously as it had appeared.  Any sensible person must know that Labour is the only effective anti-Racist party.

Hurricanes – Abnormal is the New Normal

September saw two unusual hurricanes.  Hurricane Florence hit the USA north of Florida.  Typhoon Mangkhut battered the Philippine, Hong Kong and South China.[F]

Mangkhut was abnormally large.  Florence was unusual for where it hit:

“Most hurricanes that follow the path of Florence usually veer north away from the East Coast.  Florence – like Hurricane Sandy in 2012 – has continued straight because of a ‘blocking high’ that has spun off from the jet stream, the strong winds that influence much of Earth’s weather.”[G]

Meantime Hurricane Helene followed the normal track, and passed over Britain in mid-September without anything too wild.  Only tropical hurricanes that stayed further south then hit the Caribbean – at least that was the normal.  Storms dangerous to Britain mostly form north of Spain, like the Great Storm of 1987.

It has been a bad year generally:

“Typhoons are fairly common in Japan at this time of year, although they rarely cause serious damage.  Jebi’s arrival followed a summer of extreme weather in the country, including floods and landslides in July in which more than 200 people died, and a record-breaking heatwave that killed dozens of people and sent tens of thousands to hospital.”[H]

Yet the world in 2018 had cooled a little, with the ending of the most recent El Nino event.  Another may be starting soon.

All caused by Global Warming?  Bad weather has always happened, but worse weather was forecast.  Worse weather has come.

Politicians seem to think they can negotiate down or evade warnings given by climate scientists, as if it were a normal demand from a typical interest-group.  But climate scientists are only marginally an interest-group.  They respond to hard facts of natural science.

The price of doing too little about greenhouse gases is being paid by everyone.

Times Are Changing

“A radical overhaul of Britain’s economy as far-reaching as Labour’s post-war reforms and the Thatcherite revolution in the 1980s is needed to address the UK’s chronic failure to raise the standard of living of millions of workers since the 2008 financial crash, according to a major report.

“In a damning verdict on the state of the UK economy, the IPPR commission on economic justice, which includes the Archbishop of Canterbury Justin Welby, senior business leaders and economists, found that the UK is being held back by a business culture dominated by decades of short-term profit taking, weak levels of investment and low wages.  Among the report’s 73 recommendations are: a £1 rise in the minimum wage; the replacement of inheritance tax with a £9bn-a-year ‘lifetime gifts’ tax; and greater economic devolution across the UK.

“It argues that the shareholder-driven model of capitalism is outmoded and partly to blame for Britain slipping down international league tables for investment and productivity, which measures the output per hour of each worker and is seen as the cornerstone of economic progress because it drives up wages.”[I]

“Britain should limit the windfall gains of landowners by freezing the value of plots newly designated for housing…

“Calling on the government to pursue land market reforms similar to the German model, the Institute for Public Policy Research said planning authorities should be given new powers to zone land for development and freeze its price.”[J]

“Tax havens concentrate 8% of global private financial wealth and that this reduces global tax revenues by about $200 billion annually.  Several scandals have highlighted the role of banking secrecy in tax evasion.”[K]

The Chinese Example

I’ve said for years that post-Mao China never accepted Capitalism.  It copied the East Asian version of Europe’s so-called Keynesian system.  Recently, I’ve noted how similar things are now being said in mainstream media, as New Right dogma loses its status.  Here’s another instance:

“If you were seeking an example of Keynesian government today you wouldn’t look first to the West, but to China, where a Communist Party that brooks no opposition presides over a technocratic regime par excellence.  Not only are China’s economic managers hard-headedly pragmatic in their approach to the politics of the market, but the deeper impetus for the policy-makers in Beijing is, in Mann’s sense, truly Keynesian.  What is at stake is the post-Tiananmen compromise: accept and support the regime in exchange for growth and social transformation.  Much has been made of the role of neoliberal thinkers in launching Deng’s market revolution in the 1980s.  But when the going gets rough, the Chinese turn Keynesian.  Beijing’s response to the 2008 crisis was the most dramatic work-creation stimulus in history.  When in 2009 the governor of the People’s Bank of China proposed a new global currency system, he explicitly invoked Keynes’s proposals at Bretton Woods.  Beijing’s successful management of China’s growth involves exchange controls, guidance of the exchange rate and direct regulation of bank lending – techniques reminiscent of 1950s Keynesian fine-tuning.  And President Xi’s current personal priority is the elimination of the final residuum of absolute poverty by means of large-scale resettlement and investment.”[L]

Labour should cite the world’s most successful large economy.  No need to copy most of its ideas, though execution for rapists and drug dealers would be popular in some circles, mostly Tory.  But emphasise that the Chinese never accepted Capitalism as Thatcher and Reagan understood it.  They opted for a Western invention, the Mixed Economy, also called Keynesianism.

No, There Is No International Law

It is a great pity that the victors of World War Two pretended they were doing more than punishing the worst of the defeated.  It was never likely that people from strong states would be punished unless their own government repudiated them.  But many thought otherwise.

Now at last, things are out in the open:

“The US has threatened sanctions against the International Criminal Court (ICC) if it goes ahead with prosecutions against Americans.

“The court is currently considering prosecuting US servicemen over alleged detainee abuse in Afghanistan.

“National Security Adviser John Bolton called the court ‘illegitimate’ and vowed the US would do everything ‘to protect our citizens’.

“The US is among dozens of nations not to have joined the court.

“The court investigates and brings to justice people responsible for genocide, crimes against humanity, and war crimes, intervening when national authorities cannot or will not prosecute.

“The ICC was established by a UN treaty in 2002, and has been ratified by 123 countries, including the UK.

“However several countries, including China, India, and Russia, have refused to join.

“Some African countries have called for withdrawal from the court over perceived unfair treatment of Africans.”[M]

Trump is abandoning the phony New World Order of the 1990s.  The USA was never going to allow any power superior to itself, so why pretend?

Sport Polluted By Money

“Sports movies, like history, tend to be written by the victors.  The Hollywood canon is packed with stories about winning – against all odds, at all costs, when it’s all on the line, in as noble and ruggedly masculine a fashion as possible.  It’s the domain of guys like Burt Reynolds, Kevin Costner, Sylvester Stallone and Dwayne Johnson.  But films such as … The Rider are showing us the flipside of this mentality, which is not only that somebody has to lose, but that this stuff can really mess you up.  You could call that more of an anti-sports movie, but given the cliches of the genre and a certain instability in ideas of American masculinity, there’s often a more interesting story.”[N]

The film is about professional rodeo cowboys in the USA.  The review fails to notice that sport becomes something very different when money dominates it.

It’s not quite ‘money as the root of all evils’ – bad behaviour has many causes.  But where money is the main motive for ‘insiders’, there is always a pull towards bad behaviour.  What some would call evil.

A much worse pull when the difference between winning and losing is very large.  And where young men (and occasionally young women) get vast incomes, but are discarded when they age.

Racism in Sweden

“The Social Democrats have been embedded in government to a greater degree than elsewhere, as has an attachment to egalitarianism. But that began to erode in the 1980s, just as it did throughout Europe. Sweden remains a more equal country than most. Yet the rise in inequality over the past 15 years has been the steepest of all OECD nations.”[O]

This has led to a steep advance by the ‘Sweden Democrats’.  Originally a front organisation for Neo-Nazis: but people who believed in the surface values spotted and threw out the Nazis.  Repudiated Nazism and fascism.[P]

They have gone from strength to strength, rising from 5.7 to 12.9 to 17.6% of the vote since 2010.  From 20 to 49 to 63 seats in a Parliament of 349.

The successful Mixed Economies of the 1950s and 1960s saw the nation as a family.  Undermined when the elite let in large numbers of strangers, and let the rich run out of control.

Strangers are mostly needy, and will improve the culture by broadening it.  But don’t be surprised if it causes stress.

Inequality is a social evil, caused by the Centre-Left losing its nerve as the rich got more aggressive and the Soviet Union declined.

On the left, a party dominated by the former Swedish Communists has risen a little.  From 5.6% and 19 seats in 2010 to 7.9% and 29 seats now.

Sweden needs a Corbyn.

Snippets

Wider Anti-Semitism Acknowledged?

“Conservatives condemned by British Jewish leaders after MEPs vote to defend Hungary’s far-right Orban government…

“The full statement from the Board of Deputies president, Marie van der Zyl  said: ‘I note with disappointment that Conservative Party MEPs have voted in defence of Hungary’s populist, right-wing government of Viktor Orban.”[Q]

Maybe they are responding to all the criticism they’ve been getting from left-wing Jews.  Defending their dubious claim to speak for Jews in general.

***

Dangers of Alcohol

Should moderate drinkers worry about a report that suggests they risk their health?  Not really.

“For each set of 100,000 people who have one drink a day per year, 918 can expect to experience one of the 23 alcohol-related problems in any year. Of those who drink nothing, 914 can expect to experience a problem. This means that 99,082 are unaffected, and 914 will have an issue no matter what. Only 4 in 100,000 people who consume a drink a day may have a problem caused by the drinking, according to this study.

“At two drinks per day, the number experiencing a problem increased to 977. Even at five drinks per day, which most agree is too much, the vast majority of people are unaffected.”[R]

***

Brexit

Suppose Mrs May is doing exactly what she was supposed to do on behalf of the more-than-millionaire class?  Upholds by tricky methods the interests of the global more-than-millionaire class that this vicar’s daughter married into?

Before the Referendum, she was a lukewarm Remainer. [S]  Suppose her role was or became to replace Cameron and nominally support Brexit?  But to make sure it is unendurable?

Just a thought.

***

On-line

Newsnotes are also at my Long Revolution website, https://longrevolution.wordpress.com/newsnotes-historic/.
I blog occasionally at https://gwydionmw.quora.com/.
I tweet at @GwydionMW.

References

[A]              The people behind the failed Biafra secession, and then known as Ibo

[B]              https://www.irishcentral.com/news/irishvoice/the-british-obama-and-hes-irish-too

[C]              https://gwydionwilliams.com/48-economics/the-core-falsehood-of-capitalist-economics/ and https://gwydionwilliams.com/48-economics/adam-smith-on-productive-labour/

[D]              https://www.telegraph.co.uk/news/politics/labour/11610529/The-tragic-past-haunting-Chuka-Umunna.html

[E]              https://www.bbc.co.uk/news/uk-politics-45453807

[F]              Typhoon is just another name for hurricane, and it would be good if we started using just the one word

[G]              https://www.newscientist.com/article/2179377-global-warming-is-amplifying-hurricane-florences-destructive-power/

[H]              https://www.theguardian.com/world/2018/sep/05/typhoon-jebi-thousands-stranded-at-island-airport-in-japan

[I]               https://www.theguardian.com/uk-news/2018/sep/05/thinktank-calls-for-major-overhaul-of-britains-economy

[J]               https://www.theguardian.com/business/2018/aug/28/call-to-stop-landowners-making-huge-profits-from-speculation

[K]              https://voxeu.org/article/banks-defy-gravity

[L]              https://www.lrb.co.uk/v40/n17/adam-tooze/tempestuous-seasons

[M]             https://www.bbc.co.uk/news/world-us-canada-45474864

[N]              https://www.theguardian.com/film/2018/sep/10/pull-no-punches-how-sports-movies-swapped-triumph-for-truth

[O]              https://www.theguardian.com/commentisfree/2018/sep/09/sweden-elections-far-right-tolerance

[P]              https://en.wikipedia.org/wiki/Sweden_Democrats

[Q]              https://www.independent.co.uk/news/uk/politics/conservative-orban-hungary-jewish-deputies-board-antisemitism-tory-british-meps-eu-vote-latest-a8535846.html

[R]              https://www.nytimes.com/2018/08/28/upshot/alcohol-health-risks-study-worry.html

[S]              https://www.euronews.com/2016/07/12/what-is-theresa-may-s-view-on-brexit

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