I'm done

We've had a pretty good run, here in the US. At least, since the Great Depression, things have been remarkably stable. My feeling, and that of others, is that the time for relative peace and economic growth has come to an end. You can see the signs everywhere, if you look for them. Unfortunately, too many people refuse to look, or refuse to recognize them for what they really are.

The bailout is not the problem. Sub-prime lending is not the problem. The credit crisis is not the problem. Unemployment, foreclosures, and defaults are not the problem. They are merely symptoms of the real problem. The real problem lies in our paradigm, the problem lies in our belief that things will, or must, always grow, always improve, and that tomorrow will always be better than today. This blind faith in inexorable progress is belied by the simple fact that our growth is simply unsustainable. Daily, more proof arrives that the tremendous march of "progress" since the industrial revolution has been purchased at a tremendous cost- one that the planet can scarcely bear for much longer. Or, as award-winning journalist Chris Hedges argued yesterday in a brilliant article, "It's not going to be OK".

Many will wonder why nobody tried to warn them what was coming. The reality is, there are voices out there that are telling you what is coming, but it's not a pretty picture and so you choose to ignore them. For myself, I listen to those who have been right all along. I choose track-record over happy thoughts. Since the current economic crisis really picked up steam in September of last year, the "experts" have been wrong time and time again, while those few voices in the wilderness have been saying that this downturn will be worse than anyone's expecting, will last longer than anyone's expecting, and the consequences will be far worse than anyone's expecting. Those are the voices I choose to listen to now. It certainly is not the politicians that have been saying that nobody could have predicted the current crisis, ignoring the fact that plenty of people did predict it. No longer comparing the current crisis to milder recessions of the 70's, 80's or 90's, expert economists are now calling for an unprecedented depression.

Journalists are starting to realize that they've been far too complicit. Lost in all the news about why newspapers are shuttering their doors around the country is the simple fact that they have been wrong, horribly wrong, for far too long. The rise of the internet has delivered undreamt of resources to those of us who demand truth, and that truth has come at the expense of the so-called opinion makers and spin-doctors. When the media only quotes those who say that we've reached a "bottom", and it becomes clear within days (or hours) that there is no end in sight, it becomes clear that both those sources and the media themselves are no longer worthy of attention. At the same time, they are useful as they ferret out a small portion of the corruption in our modern age. A staggering amount of wrongdoing exists in all levels of government, and if the populace were truly paying attention, the government would have already been overthrown. Taking one small glance at the news of the day reveals that two of Obama's cabinet level appointees (or 17%) have suddenly remembered that they forgot to pay taxes on perks or income they received, to the tune of hundreds of thousands of dollars. Luckily, they remembered just as Obama won the election! Geithner has been confirmed, and Daschle is expected to be. These two people should have been disqualified on that basis alone, and yet nobody seems to think it's a problem.

Politicians only have themselves to blame, both for the current crisis and the fact that nobody is yet grasping the gravity of the situation. Like the boy who cries wolf, decades of overheated rhetoric has numbed the public to pronouncements of genuine seriousness. A week ago Friday, our new president had this to say: "Look, we are all political animals here. If we don't do this, we may lose seats. I may not be re-elected. But none of that's going to matter if we don't pass this because the economy will be in a crisis and the American people will be hurting." Ignoring for a moment the fact that his solution is unlikely to work, and just listen to the raw appeal for desperate measures. "I may not be re-elected. But none of that's going to matter." When have you ever heard a politician say that getting re-elected does not matter? It's a half-step away from admitting (as a British minister did last week) "The banks are fucked, we're fucked, the country's fucked."

Iceland's government has fallen in this crisis. It will not be the last. Civil unrest is spreading rapidly throughout Eastern Europe and China, and there have been many predictions that it will strike in America before we're done. We've thrown trillions of dollars at the problem, close to 30 banks have failed (with hundreds or thousands more poised to fail at any moment), unemployment has been rising at over half a million per month, and still we are no closer to anything resembling a solution, or even a slowing in the bloodbath.

I'm not asking anyone to take this all on faith. Read both sides of these arguments. Then go back and read the counter-arguments. Read opinions that disagree with yours, read about subjects that you ordinarily would not. Rely as much as you can using direct evidence, or any statistics you can find. The reporting of statistics can be spun, but the raw numbers themselves do not lie. Obama was indisputably correct during his inaugural speech when he said "the time has come to set aside childish things." Stop watching "American Idol", or whatever mindless drivel masquerades as entertainment these days. Are you prepared to provide for yourself and your family should the grocery stores suddenly be empty of food- or closed due to bankruptcy? Or if water stops coming free from the tap, how will you conquer thirst?

Food banks around the country are reporting a 30% increase in demand, double the increase from six months ago. Last week, on Monday- in a single day- approximately 80,000 Americans lost their jobs, and the stock market rejoiced, if only briefly. That's 15% of the total loss for December, and it came in a single day. Where will you go for food when you have job, no money, and the food banks are empty? I hope you won't be part of the rising numbers of Americans taking their own lives.

For what it's worth, the government now admits that we have essentially ignored global warming for too long- it's now irreversible. The twin crises of global economic collapse and climate change are more interrelated than most people realize. In any case, it's too late to do much to solve either- the time has now come to focus on ways to mitigate the fallout. This is what collapse looks like. A slow-motion collapse is now occurring, and time is short for you to figure out how best to weather it.

As I said, rely on those whose predictions have been proven correct, not those who tell you comforting lies. Consider this from a 2006 Maclean's article:

And when the truth can no longer be obscured, the price will spike, the economy nosedive, and the underpinnings of our civilization will start tumbling like dominos. The U.S. -- Consumer No. 1 in the lingo of Leggett's book -- will be the most vulnerable, having allowed its citizens to pile up mountains of debt. "The price of houses will collapse. Stock markets will crash. Within a short period, human wealth -- little more than a pile of paper at the best of times, even with the confidence about the future high among traders -- will shrivel." There will be emergency summits, diplomatic initiatives, urgent exploration efforts, but the turmoil will not subside. Thousands of companies will go bankrupt, and millions will be unemployed. "Once affluent cities with street cafés will have queues at soup kitchens and armies of beggars. The crime rate will soar. The earth has always been a dangerous place, but now it will become a tinderbox."

By 2010, predicts Leggett, democracy will be on the run. As with the Great Depression, economic hardship will bring out the worst in people. Fascists will rise, feeding on the anger of the newly poor and whipping up support. These new rulers will find the tools of repression -- emergency laws, prison camps, a relaxed attitude toward torture -- already in place, courtesy of the war on terror. And if that scenario isn't nightmarish enough, Leggett predicts that "Big Oversight Number One" -- climate change -- will be simultaneously making its presence felt "with a vengeance." On the heels of their rapid financial ruin, people "will now watch aghast as their food and water supplies dwindle in the face of a climate seemingly going awry." Prolonged droughts will spread, decimating harvests. As oceans warm, fish catches "will fall off a cliff," and protein will become a luxury.

The first paragraph reads like recent history or current newspaper headlines (see hyperlinks for examples, or your local newspaper), the second paragraph is yet to come. If you wish, there are plenty of others out there that have made similar arguments. Contrast the words of these prophets with the statements of your politicians, you will find very little overlap, if any. One of these groups has been consistently correct, the other group repeats lame excuses that "nobody could have anticipated the reach, depth, or severity of the current crisis" and then proceeds to promise you a return to "normal" in short order, if you only vote for them or agree with their decision to throw trillions of dollars at the crisis.

How can I begin to explain to you the insanity of politicians? They advocate spending close to a trillion dollars in a stimulus package in which they argue that every $1 of stimulus results in $1.50 in economic growth. If that were true, then why not spend like this every day? Why not spend quadrillions of dollars, and make everyone in the US wealthy? Or why has nobody noticed that every four years we have this masturbatory celebration known as an election- new politicians come to power promising change, vowing to tackle corruption and to solve the really hard problems; and yet, nothing ever changes, corruption is endemic, and the really hard problems are only growing in severity? Frankly though, we're all to blame. We keep looking to them for solutions to problems that they caused in the first place. Well, those days are ending, soon they will no longer be able to pretend that they have solutions- in fact, you can hear that in their statements right now if you are paying attention. The word "unprecedented" is used all too frequently for them to really know what they are doing. Even economists seem eager to get the stimulus on, as it will solve for them the debate over whether fiscal stimulus really works or not. Although politicians worldwide seem to act as though that debate was already settled, in fact, it's not. And what are we to do if we throw trillions into this black hole, and it doesn't do anything after all? Is anyone even asking that question? The Wall Street Journal quotes Rahm Emanuel as saying, "Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before." This frank admission is chilling to anyone familiar with Naomi Klein's Shock Doctrine. In short, the frightened masses which would normally oppose this type of reckless endangerment of their fiscal health (not to mention that of their children and grandchildren) can be persuaded that "desperate times call for desperate measures." Left unsaid is the fact that the desperate measures will tend to benefit the upper class of society disproportionately.

Most of the masses take some comfort in the fact that doomsdayers have been wrong before, a point I freely grant. However, doomsayers only have to be correct once. Additionally, those who believed their empires would last forever have also been wrong-- 100% of the time, historically. As the great Roman society was poised on the brink of destruction, did anyone alive at the time really believe what was happening, did they recognize the signs for what they were? Or any of the great civilizations that have sprang up to dominate their world- Mayan, Incan, Egyptian, Norse- did any of them recognize the coming collapse? Clearly, not in time to prevent it. Are we any different?

Of course, the end of the world has been promised by Jews, Christians, Muslims and assorted crazies with sandwich boards for as long as there has been a human world to end. But those doomsdays were the product of faith; reason always used to say the world will continue. The point about the new apocalypse is that this situation has reversed. Now faith tells us we will be able to solve our problems; reason says we have no answers now and none are likely in the future. Perhaps we can't cure cancer because the problem is simply beyond our intellects. Perhaps we haven't flown to the stars because our biology and God's physics mean we never can. Perhaps we are close to the limit and the time of plenty is over.

The evidence is mounting that our two sunny centuries of growth and wealth may end in a new Dark Age in which ignorance will replace knowledge, war will replace peace, sickness will replace health and famine will replace obesity. You don't think so? It's always happened in the past. What makes us so different? Nothing, I'm afraid.

If we manage to escape the current crisis relatively unscathed, will we heed it for the warning sign it is? Jared Diamond's amazing book Collapse: how societies choose to fail or succeed poses an interesting question: What did the person on Easter Island who cut down the last tree think about as he was doing it? You see, deforestation was a major factor in the collapse of Easter Island society. Diamond spotlights several other once-mighty societies that collapsed because of their stupid, short-term, profligate use of natural resources. Put simply, they used their resources until they were gone, and then they died. Their societies crumbled surprisingly quickly, often within only decades from reaching their peak. There is nothing to suggest that American society is any different, or has learned the lessons of the past. Quoting Diamond:

"One of the disturbing facts of history is that so many civilizations collapse. Few people, however, least of all our politicians, realize that a primary cause of the collapse of those societies has been the destruction of the natural resources on which they depend. Fewer still appreciate that many of those civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power."

If we assume this is not the great collapse, then it will certainly arrive within decades if we continue on our current path, and probably even if we make radical changes. The deniers have been far too successful, and we are utterly unprepared for the implications. They have postponed action on the most pressing of problems, citing potential damage to the economy (which after all, must continue to grow, at all costs). Well, they've succeeded, and gained the ultimate pyrrhic victory. The economy is now in the process of being destroyed, and it's too late to solve the environmental problems we will be facing. Scientific consensus is now that the human race, if not all life on Earth, will go extinct within the next 100 years. It takes a bit of connecting the dots, but they are all well-regarded scientific studies. Or, if you choose not to believe that one, how about the NASA scientist and climate expert that says Obama has only 4 years to save planet earth? I, for one, am not optimistic that he can muster the will to do so, even if we grant that it's not yet too late.

In any case, I am not going to be spending much more time chronicling this collapse. I'm definitely done posting about political and economic corruption within the US, as there are far too many articles and I have too little time. I urge you to spend whatever time and resources you can muster in preparing yourself for what's to come. I am not going to point you in the direction of "recommended reading" or some similar list. If you are interested, you can find such information on your own, but I suspect that most of you are not interested enough to even try. Pity, but consider this parting thought: before the rise of the age of oil (a mere two centuries ago), the earth was able to support approximately 1 billion people. There are now approximately 6.7 billion. If there is the slightest chance that any of our most respected scientists are correct then the coming wars, pandemics, droughts, famine, and extreme weather are set to reduce that number dramatically, if not totally erase it. Mankind has proven itself to be a parasite, remorselessly feeding on the resources of our host planet. Like a parasite, we may just be killing ourselves along with our host. Or perhaps a cancer is an apt description- growing exponentially, eventually choking out and destroying the healthy parts until the whole organism dies.

Thanks to all who have taken the time to read my postings over the past year or two, and I'm very sincerely wishing you good luck.

THE SECOND COMING

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: a waste of desert sand;
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Wind shadows of the indignant desert birds.
The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

It's not going to be OK

I'm finding it difficult to have much to say about this article. For once, I don't have anything to criticize. I thought I might be able to pick on the reporter himself, but he's impeccably credentialed, as far as I can tell.

It’s Not Going to Be OK

Posted on Feb 2, 2009

AP Photo / Nikolas Giakoumidis

Riots have spread across Europe since the economic crisis began. Here, Greek riot police stand near a burning car.

By Chris Hedges

The daily bleeding of thousands of jobs will soon turn our economic crisis into a political crisis. The street protests, strikes and riots that have rattled France, Turkey, Greece, Ukraine, Russia, Latvia, Lithuania, Bulgaria and Iceland will descend on us. It is only a matter of time. And not much time. When things start to go sour, when Barack Obama is exposed as a mortal waving a sword at a tidal wave, the United States could plunge into a long period of precarious social instability.

At no period in American history has our democracy been in such peril or has the possibility of totalitarianism been as real. Our way of life is over. Our profligate consumption is finished. Our children will never have the standard of living we had. And poverty and despair will sweep across the landscape like a plague. This is the bleak future. There is nothing President Obama can do to stop it. It has been decades in the making. It cannot be undone with a trillion or two trillion dollars in bailout money. Our empire is dying. Our economy has collapsed.

How will we cope with our decline? Will we cling to the absurd dreams of a superpower and a glorious tomorrow or will we responsibly face our stark new limitations? Will we heed those who are sober and rational, those who speak of a new simplicity and humility, or will we follow the demagogues and charlatans who rise up out of the slime in moments of crisis to offer fantastic visions? Will we radically transform our system to one that protects the ordinary citizen and fosters the common good, that defies the corporate state, or will we employ the brutality and technology of our internal security and surveillance apparatus to crush all dissent? We won’t have to wait long to find out.

There are a few isolated individuals who saw it coming. The political philosophers Sheldon S. Wolin, John Ralston Saul and Andrew Bacevich, as well as writers such as Noam Chomsky, Chalmers Johnson, David Korten and Naomi Klein, along with activists such as Bill McKibben and Ralph Nader, rang the alarm bells. They were largely ignored or ridiculed. Our corporate media and corporate universities proved, when we needed them most, intellectually and morally useless.

Wolin, who taught political philosophy at the University of California in Berkeley and at Princeton, in his book “Democracy Incorporated” uses the phrase inverted totalitarianism to describe our system of power. Inverted totalitarianism, unlike classical totalitarianism, does not revolve around a demagogue or charismatic leader. It finds its expression in the anonymity of the corporate state. It purports to cherish democracy, patriotism and the Constitution while cynically manipulating internal levers to subvert and thwart democratic institutions. Political candidates are elected in popular votes by citizens, but they must raise staggering amounts of corporate funds to compete. They are beholden to armies of corporate lobbyists in Washington or state capitals who write the legislation. A corporate media controls nearly everything we read, watch or hear and imposes a bland uniformity of opinion or diverts us with trivia and celebrity gossip. In classical totalitarian regimes, such as Nazi fascism or Soviet communism, economics was subordinate to politics. “Under inverted totalitarianism the reverse is true,” Wolin writes. “Economics dominates politics—and with that domination comes different forms of ruthlessness.”

I reached Wolin, 86, by phone at his home about 25 miles north of San Francisco. He was a bombardier in the South Pacific during World War II and went to Harvard after the war to get his doctorate. Wolin has written classics such as “Politics and Vision” and “Tocqueville Between Two Worlds.” His newest book is one of the most important and prescient critiques to date of the American political system. He is also the author of a series of remarkable essays on Augustine of Hippo, Richard Hooker, David Hume, Martin Luther, John Calvin, Max Weber, Friedrich Nietzsche, Karl Marx and John Dewey. His voice, however, has faded from public awareness because, as he told me, “it is harder and harder for people like me to get a public hearing.” He said that publications, such as The New York Review of Books, which often published his work a couple of decades ago, lost interest in his critiques of American capitalism, his warnings about the subversion of democratic institutions and the emergence of the corporate state. He does not hold out much hope for Obama.

“The basic systems are going to stay in place; they are too powerful to be challenged,” Wolin told me when I asked him about the new Obama administration. “This is shown by the financial bailout. It does not bother with the structure at all. I don’t think Obama can take on the kind of military establishment we have developed. This is not to say that I do not admire him. He is probably the most intelligent president we have had in decades. I think he is well meaning, but he inherits a system of constraints that make it very difficult to take on these major power configurations. I do not think he has the appetite for it in any ideological sense. The corporate structure is not going to be challenged. There has not been a word from him that would suggest an attempt to rethink the American imperium.”

Wolin argues that a failure to dismantle our vast and overextended imperial projects, coupled with the economic collapse, is likely to result in inverted totalitarianism. He said that without “radical and drastic remedies” the response to mounting discontent and social unrest will probably lead to greater state control and repression. There will be, he warned, a huge “expansion of government power.”

“Our political culture has remained unhelpful in fostering a democratic consciousness,” he said. “The political system and its operatives will not be constrained by popular discontent or uprisings.”

Wolin writes that in inverted totalitarianism consumer goods and a comfortable standard of living, along with a vast entertainment industry that provides spectacles and diversions, keep the citizenry politically passive. I asked if the economic collapse and the steady decline in our standard of living might not, in fact, trigger classical totalitarianism. Could widespread frustration and poverty lead the working and middle classes to place their faith in demagogues, especially those from the Christian right?

“I think that’s perfectly possible,” he answered. “That was the experience of the 1930s. There wasn’t just FDR. There was Huey Long and Father Coughlin. There were even more extreme movements including the Klan. The extent to which those forces can be fed by the downturn and bleakness is a very real danger. It could become classical totalitarianism.”

He said the widespread political passivity is dangerous. It is often exploited by demagogues who pose as saviors and offer dreams of glory and salvation. He warned that “the apoliticalness, even anti-politicalness, will be very powerful elements in taking us towards a radically dictatorial direction. It testifies to how thin the commitment to democracy is in the present circumstances. Democracy is not ascendant. It is not dominant. It is beleaguered. The extent to which young people have been drawn away from public concerns and given this extraordinary range of diversions makes it very likely they could then rally to a demagogue.”

Wolin lamented that the corporate state has successfully blocked any real debate about alternative forms of power. Corporations determine who gets heard and who does not, he said. And those who critique corporate power are given no place in the national dialogue.

“In the 1930s there were all kinds of alternative understandings, from socialism to more extensive governmental involvement,” he said. “There was a range of different approaches. But what I am struck by now is the narrow range within which palliatives are being modeled. We are supposed to work with the financial system. So the people who helped create this system are put in charge of the solution. There has to be some major effort to think outside the box.”

“The puzzle to me is the lack of social unrest,” Wolin said when I asked why we have not yet seen rioting or protests. He said he worried that popular protests will be dismissed and ignored by the corporate media. This, he said, is what happened when tens of thousands protested the war in Iraq. This will permit the state to ruthlessly suppress local protests, as happened during the Democratic and Republic conventions. Anti-war protests in the 1960s gained momentum from their ability to spread across the country, he noted. This, he said, may not happen this time. “The ways they can isolate protests and prevent it from [becoming] a contagion are formidable,” he said.

“My greatest fear is that the Obama administration will achieve relatively little in terms of structural change,” he added. “They may at best keep the system going. But there is a growing pessimism. Every day we hear how much longer the recession will continue. They are already talking about beyond next year. The economic difficulties are more profound than we had guessed and because of globalization more difficult to deal with. I wish the political establishment, the parties and leadership, would become more aware of the depths of the problem. They can’t keep throwing money at this. They have to begin structural changes that involve a very different approach from a market economy. I don’t think this will happen.”

“I keep asking why and how and when this country became so conservative,” he went on. “This country once prided itself on its experimentation and flexibility. It has become rigid. It is probably the most conservative of all the advanced countries.”

The American left, he said, has crumbled. It sold out to a bankrupt Democratic Party, abandoned the working class and has no ability to organize. Unions are a spent force. The universities are mills for corporate employees. The press churns out info-entertainment or fatuous pundits. The left, he said, no longer has the capacity to be a counterweight to the corporate state. He said that if an extreme right gains momentum there will probably be very little organized resistance.

“The left is amorphous,” he said. “I despair over the left. Left parties may be small in number in Europe but they are a coherent organization that keeps going. Here, except for Nader’s efforts, we don’t have that. We have a few voices here, a magazine there, and that’s about it. It goes nowhere.”

More news on the dollar

After yesterday's brief discussion on the future of the dollar, there are three major articles today on the subject.

First, the Wall Street Journal takes issue with the presumptive replacement for Tim Geithner at the New York Fed- a Mr. William Dudley.

One of the Fed's most important tasks in coming months will be deciding when to remove the oceans of liquidity that it has been pushing into the economy to fight off a deeper recession. Remove it too late once the recovery begins, and the Fed will risk creating new asset bubbles or a run on the dollar. Yet as chief economist for many years at Goldman Sachs, Mr. Dudley consistently supported a weak dollar in the name of reducing the U.S. trade deficit.

This is a dangerous message to send at any time, but in particular as the new Administration embarks on an epic spending spree that will require from $2 trillion to $3 trillion in new U.S. borrowing over the next two years. The world's creditors aren't likely to lend as much, or as cheaply, if they think their dollar assets will be debased as a matter of U.S. policy.

Reuter's provides a contrasting view- that Geithner and Obama face a daunting, but vital, task of persuading the world that they intend to maintain a strong-dollar policy.

"This time around the administration probably means it when it says it backs a strong dollar. They have to be dead serious about it," said Samarjit Shankar, a director for global strategy at the Bank of New York Mellon, in Boston.

"Trillions worth of U.S. debt is coming soon to the markets. Which foreign central bank or institution will buy this debt if they are not fully convinced the dollar will remain strong?" he added.

The challenge for Obama's team, analysts said, will be to support the dollar's value without direct manipulation in the markets, with the economy in recession, interest rates near zero, and a ballooning current account deficit.

Moreover, Washington will have to achieve all that without antagonizing China, the biggest holder of U.S. Treasury debt, the analysts said.

"It will be a real test. One thing is to finance a $450 billion deficit and another is to finance $2 trillion," said Chris Rupkey, a senior financial economist at Bank of Tokyo-Mitsubishi in New York.

And finally, a wonderful op-ed piece from Peter Schiff.

Barack Obama has spoken often of sacrifice. And as recently as a week ago, he said that to stave off the deepening recession Americans should be prepared to face "trillion dollar deficits for years to come."

But apart from a stirring call for volunteerism in his inaugural address, the only specific sacrifices the president has outlined thus far include lower taxes, millions of federally funded jobs, expanded corporate bailouts, and direct stimulus checks to consumers. Could this be described as sacrificial?

What he might have said was that the nations funding the majority of America's public debt -- most notably the Chinese, Japanese and the Saudis -- need to be prepared to sacrifice. They have to fund America's annual trillion-dollar deficits for the foreseeable future. These creditor nations, who already own trillions of dollars of U.S. government debt, are the only entities capable of underwriting the spending that Mr. Obama envisions and that U.S. citizens demand.

These nations, in other words, must never use the money to buy other assets or fund domestic spending initiatives for their own people. When the old Treasury bills mature, they can do nothing with the money except buy new ones. To do otherwise would implode the market for U.S. Treasurys (sending U.S. interest rates much higher) and start a run on the dollar. (If foreign central banks become net sellers of Treasurys, the demand for dollars needed to buy them would plummet.)

In sum, our creditors must give up all hope of accessing the principal, and may be compensated only by the paltry 2%-3% yield our bonds currently deliver.

As absurd as this may appear on the surface, it seems inconceivable to President Obama, or any respected economist for that matter, that our creditors may decline to sign on. Their confidence is derived from the fact that the arrangement has gone on for some time, and that our creditors would be unwilling to face the economic turbulence that would result from an interruption of the status quo.

But just because the game has lasted thus far does not mean that they will continue playing it indefinitely. Thanks to projected huge deficits, the U.S. government is severely raising the stakes. At the same time, the global economic contraction will make larger Treasury purchases by foreign central banks both economically and politically more difficult.

Cult of Personality

All excerpts from Wikipedia's entry for "Cult of Personality." All emphasis mine.

A cult of personality or personality cult arises when a country's leader uses mass media to create a heroic public image through unquestioning flattery and praise. Cults of personality are often found in dictatorships.

Generally, personality cults are most common in regimes with totalitarian systems of government, that seek to radically alter or transform society according to (supposedly) revolutionary new ideas. Often, a single leader becomes associated with this revolutionary transformation, and comes to be treated as a benevolent "guide" for the nation, without whom the transformation to a better future cannot occur. This has been generally the justification for personality cults that arose in totalitarian societies of the 20th century, such as those of Joseph Stalin and Adolf Hitler.

Millionaire Obama freezes pay of top millionaire staff

Obama vows new 'era of openness', freezes pay of top staff: "President Barack Obama Wednesday vowed to forge a new era of government openness and froze the pay of top staff earning more than 100,000 dollars to show Americans their leaders could also tighten their belts amid economic crisis."

Boy, I sure hope those top staffers will be OK if they don't get any more raises! I mean, to be limited to your $100,000+ salary must be pretty painful! Millionaire Barack Obama shows he really knows how to tighten the belt, by freezing the salaries of his (millionaire) staffers, including Rahm Emanuel (estimated net worth of between $5,023,020 and $13,171,000 in 2007). Most progressive bloggers are praising the move, saying that it shows Obama empathizes with ordinary Americans' struggles. But he's not actually reducing anyone's salary, so I don't see how it's proof that the White House has a new commitment to "do more with less". Maybe it's along the lines of congressional spending, which when you hear about "slashing spending" really means "reducing the rate at which spending is increasing".

I think Obama's doing some good things here, especially if his commitment to "openness" holds. I'm all for restraining lobbyist influence, but color me skeptical that the tens of thousands of lobbyists in Washington are suddenly going to be unemployed.

Riots continue in Iceland

As I noted here December 23rd, riots and violent protests were disrupting Iceland, a country not known for these types of actions. Admittedly, the economic situation there is much worse (currently) than in the United States, but perhaps not for long. The Icelandic current account deficit is currently 22% of GDP, vs. 7% for US; the Icelandic GDP is forecast to decline by 9.6% for 2009- a number nobody is contemplating for the US. Inflation in Iceland is rampant, while deflation has taken hold in America.

However, there are several parallels worth noting. Iceland is forecasting a rise in the unemployment rate to 7.8% in 2009 (a number the US would be lucky to maintain in the face of steeply mounting layoffs and business closures). Iceland's currency has lost more than half its value, which is certainly not unforeseeable in the future for the US. But more than just the numbers, the story certainly sounds familiar to those of us in the United States. From The Guardian:

The fault is clearly shared between the business elite and the government, which failed to regulate the newly privatised financial sector, allowing a few incompetent and egotistical business tycoons to gamble with the nation's fortune. And yet neither the government nor the bankers – who, by the way, seem to have disappeared into the cold thin air – see anything wrong with their own behaviour.

The governor of the central bank blames the risk-seeking bankers, the bankers blame the government and the prime minister attributes the whole crisis to the international credit crunch. This lack of any sense of responsibility has angered the Icelandic public to the extent that they have turned to the streets in greater numbers than ever before.

Sound familiar? Do you hear anyone in American politics or banking accepting responsibility?

From the Huffington Post:

Thomas Jefferson wrote in the American Declaration of Independence that "Governments are instituted among Men, deriving their just powers from the consent of the governed [and] whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government." As the protesters fight to enforce that right, in this county that has known no war for generations, that has not seen violent conflict among its citizens for centuries, we must ponder what could be.

Today, as the United States makes a fundamental shift in direction, Iceland is tearing itself apart. The peaceful transition of power we watched in Washington following a fiercely contested election is a symbol of hope to us. The competent confidence and inspiring rhetoric of Barack Obama have rallied the vast majority of Americans behind him to face the myriad challenges all around us. The arrogance and obliviousness of Iceland's ruling elite has had the opposite effect.

Once again, I sincerely hope that I am wrong about the direction we are headed. However, the way I see it, he stimulus package cannot stand up to the kind of fiscal devastation that has been unleashed around the planet, nor can the TARP (or TARP 2.0, 3.0, etc... which are surely going to be coming). Please consider what could happen here if the results that people expect from the incoming administration fail to live up to the expectations engendered by the utterly non-specific rhetoric of "hope", and "change", and "yes, we can". What happens if we simply cannot? Once more, from The Guardian:

It is the first time in Icelandic history that a young anarchist can well expect to meet his grandmother in the crowd demonstrating against the government and drumming with her kitchen knife on pots and pans. The government is surely hanging by a thin thread and might fall at any moment.

The Icelandic public fear that their country has virtually been stolen by the globetrotting business elite that spent more time rubbing shoulders with international high society than giving back to the society that enabled them to enjoy this privileged lifestyle. Now ordinary Icelanders are determined to take their country back.

Happy Inauguration Day

I stole the graphic from Nostate.com, a page run by an anarchist that has just renounced his American citizenship. Kudos to him! As a commenter there pointed out, perhaps "Stooge" isn't exactly the right word, given how complicit Obama is in being the ruling class, so make up your own mind.
As an atheist, I don't see why prayer has to be part of a government function at all, but as prayers go, this one is decent. I like a lot of the sentiments there, but asking an invisible skydaddy to give you tolerance, compassion, etc... tends to absolve one of the responsibility to research those things on your own.

You may have heard the controversy over the bigot Rick Warren being invited to give the invocation. Subsequently, Gene Robinson was invited to give a prayer to open the whole inaugural event, and here's what he prayed:

O God of our many understandings, we pray that you will…

Bless us with tears – for a world in which over a billion people exist on less than a dollar a day, where young women from many lands are beaten and raped for wanting an education, and thousands die daily from malnutrition, malaria, and AIDS.

Bless us with anger – at discrimination, at home and abroad, against refugees and immigrants, women, people of color, gay, lesbian, bisexual and transgender people.

Bless us with discomfort – at the easy, simplistic “answers” we’ve preferred to hear from our politicians, instead of the truth, about ourselves and the world, which we need to face if we are going to rise to the challenges of the future.

Bless us with patience – and the knowledge that none of what ails us will be “fixed” anytime soon, and the understanding that our new president is a human being, not a messiah.

Bless us with humility – open to understanding that our own needs must always be balanced with those of the world.

Bless us with freedom from mere tolerance – replacing it with a genuine respect and warm embrace of our differences, and an understanding that in our diversity, we are stronger.

Bless us with compassion and generosity – remembering that every religion’s God judges us by the way we care for the most vulnerable in the human community, whether across town or across the world.

And God, we give you thanks for your child Barack, as he assumes the office of President of the United States.

Give him wisdom beyond his years, and inspire him with Lincoln’s reconciling leadership style, President Kennedy’s ability to enlist our best efforts, and Dr. King’s dream of a nation for ALL the people.

Give him a quiet heart, for our Ship of State needs a steady, calm captain in these times.

Give him stirring words, for we will need to be inspired and motivated to make the personal and common sacrifices necessary to facing the challenges ahead.

Make him color-blind, reminding him of his own words that under his leadership, there will be neither red nor blue states, but the United States.

Help him remember his own oppression as a minority, drawing on that experience of discrimination, that he might seek to change the lives of those who are still its victims.

Give him the strength to find family time and privacy, and help him remember that even though he is president, a father only gets one shot at his daughters’ childhoods.

And please, God, keep him safe. We know we ask too much of our presidents, and we’re asking FAR too much of this one. We know the risk he and his wife are taking for all of us, and we implore you, O good and great God, to keep him safe. Hold him in the palm of your hand – that he might do the work we have called him to do, that he might find joy in this impossible calling, and that in the end, he might lead us as a nation to a place of integrity, prosperity and peace.

AMEN.

The Audacity of Hypocrisy

Barack Obama's inaugural address is expected to rely heavily on themes of sacrifice, of paring down the excesses, of hearkening back to a time when people were responsible for themselves, as well as for others in their communities.

Aides said the President-Elect's first words as president would hark back to John F Kennedy's plea to "ask not what your country can do for you – ask what you can do for your country".

Rahm Emanuel, who will be chief of staff in the new White House, said: "We need that culture of responsibility, not just to be asked of the American people, but its leaders must also lead by example."

The address was mostly written a week ago, according to new press secretary Robert Gibbs, and will be "heavily infused with this notion of responsibility and getting our country back on track".

Just don't expect our overlords in Washington to set an examply of the sacrifice required. To ensure that the American people gets the message loud and clear, a estimated total of $150 million will be spent. Yes, these truly are perilous times: tens of millions unemployed, businesses closing their doors all around the country, millions facing foreclosure. Obama is showing how important it is to squarely face these challenges by having a big party that costs a shitload of money. Of course, the banking industry is suffering more than most, but they somehow still found it within their means to donate more than any other industry to the celebration. I guess all those billions of dollars we gave them weren't wasted after all. The phrase "fiddling while Rome burns" springs to mind.

jkerkez1 has written a brilliant diary on the subject over at DailyKos, please read the whole thing. If you can't, check out the final two paragraphs:

In my opinion, Barack Obama should have cancelled the inauguration celebration, re-directed all of the money set aside for the events to food banks around the nation, and modeled for the nation the sobering realities that we face. Instead he has chosen a grand and glorious wedding rather than a quiet marriage in front of a Justice of the Peace. He has opted for the ten thousand dollar wedding ring rather than weaving blades of grass together into a wedding band. He has baked a cake for a million wedding invitees, a lovely frosting-encased edifice that has no nutritional value for the country. And once the grand wedding is over, all of the drunk celebrants will return home and wake up on Wednesday morning with hangovers and less money in the bank and will scratch their heads and wonder what happens next.

Truth be known, I believe that in time the festivities of the inauguration will serve to undermine Obama's authority during this the most trying moment in American History. People will recall the smiles and good feelings and they will wonder aloud, "what the hell were we thinking?". Had Barack Obama opted for a more understated and somber inauguration, people may have been jolted out of their somnabulent complacency. Unfortunately, while the rest of the nation battens down the hatches, it's party time in Washington!

Cynicism part II- "How's that 'change' working out?"

I praised David Sirota's reporting on the bailout earlier, here's a perfect example of what I mean:

The veto is the legislative equivalent of a nuclear warhead — a rarely used instrument of devastating force that singularly vaporizes the votes of 535 elected representatives. So when a president-elect issues a veto threat before being sworn into office, it sets off a particularly big explosion because it is a deliberate agenda-setting edict about priorities for the next four years. That's why every American who isn't a financial industry executive should be nervous.

After President Bush this week asked Congress to release the bank bailout fund's remaining $350 billion, Obama pledged to veto any bill rejecting the request, meaning he is beginning his presidency not by "turn[ing] the page on policies that have put the greed and irresponsibility of Wall Street before the hard work and sacrifice of folks on Main Street," as he once pledged. Instead, he is promising a mushroom cloud unless lawmakers let taxpayer cash continue flowing to the biggest of Big Money interests.

Amid paeans to "new politics," we're watching old-school paybacks from a politician who raised more Wall Street dough than any other, a president-to-be whose inauguration festivities are being underwritten by the very bankers who are benefiting from the bailout largesse. Safely distanced from electoral pressure, Obama has appointed conservative economists to top White House positions; floated a tax cut for banks; and is now trying to preserve corporate welfare that almost exclusively benefits the political donor class.

This isn't much-ballyhooed "change"; it's money politics by a different name. How do we know? Because neither Obama nor anyone else is genuinely trying to justify the bailout on its merits — and understandably so. Even the most basic queries prove such merits don't exist.

Has the bailout increased bank lending, as was its stated objective? "Hundreds of billions of dollars have been injected into the marketplace with no demonstrable effects on lending," says a new report by the congressional panel charged with overseeing the money.

Do federal officials have a solid plan to improve the bailout? The report raises alarms about "the shifting explanations of its purposes," noting that the government has "not yet explained its strategy."

Is the cash being spent responsibly? The report says a lack of transparency means the public "still does not know what the banks are doing with taxpayer money."

But the most damning question isn't even being voiced: Is a bank bailout the best way to boost the economy?

Somehow, immediately releasing more bailout funds is being portrayed as a self-evident necessity, even though The New York Times reported this week that "the Treasury says there is no urgent need" for additional money. Somehow, the burden of proof is on bailout opponents who make these points, not on those who want to cut another blank check.

This bizarre dynamic is anything but the "pragmatism" Obama rhetorically fetishizes — and the anti-bailout majority knows it.

The myth of electoral accountability

DailyKos and Open Left especially have been making an issue of "progressive accountability", or ways to ensure progressive priorities on the campaign trail are translated into action. This typically takes one of two forms- first, by complaining that Democrats as a party tend to be overly willing to accede to demands of the Republican (minority) party (see here, here, and here for examples), or secondly by seeking strategies to ensure that Democrats are forced to be more responsive to progressives (see here and here).

This type of discussion has usually been restricted to progressive dissatisfaction with Obama's cabinet selections, which makes sense given that he has yet to advance any specific policy positions. However, in the wake of Obama's decision to have Rick Warren offer the invocation at the inauguration, the issue appears to be at a boiling point. Rachel Maddow called it "a lose-lose proposition" and "the first big mistake of his post-election politicking." However, Obama has defended his selection as his attempt to "create an atmosphere where we can disagree without being disagreeable and then focus on those things that we hold in common as Americans." This attitude seems to match well with that of his White House Chief of Staff selection, Rahm Emanuel, whose attitude seems to be that it's OK to piss off the progressives since it makes the new administration "look bipartisan."

What the progressive commenters here are missing is the same thing that they've been missing all along. Namely, that neither of the two major parties will ever be more interested in what progressives say than what big business says. Markos at the DailyKos even disparaged Nader supporters, saying

Fuck Ralph Nader, and fuck his supporters. If the past eight years hasn't smacked any sense into their addled brains, then nothing will. This site caters to the reality-based community. No one else need apply.

So at what point do you start to question your repeated (and failed) attempts to pursue your strategy, Markos? Well, it appears he's on the right track:

So you either tear your hair out and go mad at the rank idiocy of it all, or you laugh. And let me tell you, the number of times we've gone through this crap makes laughing about it increasingly difficult.

Welcome to the true reality-based community here, Markos. Maybe you have a few more years of disappointment ahead before some sense gets smacked into your addled brain, but I think sooner or later you'll come around.

Censorship at Open Left?

This was posted on Open Left, earlier today:

I Have Just Unsubscribed To Obama's E-Mail List

from Open Left - Front Page by avenged savant

First of all, I have been VERY VERY VERY incensed by Obama's flippant, dismissive, and almost contempt for liberals so far in his policy "changes" and statements since the campaign was over with.

Secondly, the lack of diversity in his Cabinet and advisors is dreadful. Only ONE token Hispanic, and he's not even a liberal, no openly gay person (no, Janet doesn't count, cus she's not open), and, most of all, no bona fide progressive.

When you press "unsubscribe" at the bottom of one of the deluge of emails Obama's team sends you, it prompts you to state your reasons for taking your email address off his list. So I did. And I listed the things written above.

I also told them (whichever flunky reads it...IF it even gets read), that I no longer support Obama, that I gave him over a grand in the campaign cycle, and that I consider him to be center-right at best. And that's not who or what I gave my money and time and efforts to.

He won't be getting my fucking money of my fucking vote in 2012.

Btw, our backlash MUST start in earnest NOW. Why? BECAUSE IF WE DON'T, THEN WE SURELY WON'T BE GETTING ANY TRUE PROGRESSIVES OF LATINOS OR ANYTHING ELSE BUT DEMOCONS TO HIS ADMINISTRATION!!! ONLY PUSSY "UNCLE TOM" LIBERALS HAVE THIS PUSSY-ASS, "WAIT-AND-SEE APPROACH."

I tried to click on the link from my reader, being certain some interesting stuff would be in the comments following such an incendiary post, but this is what I got. Followed in short order by this:

About the diary that disappered (Chris Bowers) Quick note and apology about the stupid diary that briefly appeared on the front-page:

Back when Open Left was started, posting Quick Hits required editor status. So, I promoted a bunch of people who had expressed interest in writing Quick Hits, under the condition that they not post front page diaries. The user in question was one of those early editor promotions. In this case, s/he broke his or her promise to not post on the front page.

Apologies to all.

And I understand that many of these blogs are trying to maintain "journalistic" standards, so I'm not necessarily mad at them for taking it down. I do think "avenged savant" had a valid point of view, one that is indisputably shared by many on the left. Further, the sense of betrayal in the post is almost palpable, and it's what I've been warning about since before the election. If you pin your hopes for change on a politician, especially one from the two indistinguishable major parties, then prepare to start removing the knife from your back. There is simply no way that your measly donation of "a grand" can compete with these types of donors. The real challenge is to keep this sense of betrayal from turning to apathy; we must learn to channel the frustration and anger at establishment politics into achieving our goals. But make no mistake about it: "our goals" will never be in alignment with Washington's goals.

Obama Knows How to Move to the Market

Political Perceptions : Obama Knows How to Move to the Market

You need look no further than the Wall Street Journal for confirmation of what I've been saying: Obama and Wall Street... like a hand and a glove.

For a liberal Democrat who made no secret of his Robin Hood economic instincts, President-elect Barack Obama has been showing a savvy understanding of how to get the hard-core capitalists on Wall Street to do his bidding.

The way that Mr. Obama has handled his ambiguous role in the last week — before he actually has any real power, but is viewed by the nation as the economic savior — has been telling.

Most notable is the way he gave investors a shove toward the buy side with a press leak that may have prevented another scary stock market sell-off. Instead, his deft maneuvering was followed by a substantial rally that avoided even more financial angst around holiday dinner tables.

The way he teased the markets and the media about what he will do about taxes and spending also showed an aptitude for operating in the Wall Street-Washington arena.

Oh, that joker! People thought he was going to raise taxes on the rich and cause problems for the biggest of the big capitalists. Boy, he sure showed them... he's one of them after all!

It was then that the Obama folks leaked word that New York Federal Reserve Bank President Tim Geithner would be the new secretary of the Treasury – the post most important to the folks who make a living trading stocks and bonds. The Obama team was confident that Mr. Geithner would be viewed favorably by the market because he was a known and approved commodity among the Wall Street crowd.

They were right.

The leak was meant to buttress the market; normally announcements that seem likely to move stock prices one way or another are made before or after trading hours, from 9:30 a.m. to 4 p.m. Before the leak, investors had feared the Dow would test the 7,000 range. As the news spread, the market rallied and the Dow finished the day up almost 500 points, above 8000.

That was the point. The Obama folks wanted to move the markets, but they weren’t ready to officially announce Mr. Geithner’s selection, which they did the following Monday along with the rest of his top economic team.

*Phew*... I can sure rest easy, knowing that Obama's watching over the markets, making sure that they don't go down too much!

Democracy Now! | Noam Chomsky: "What Next? The Elections, the Economy, and the World"

It's ideas and speeches like this that exemplify the type of political dissent this country needs most, especially now. I love Noam Chomsky, can I say that? He points out so many things that bear focusing upon- not least of which is the concept that change comes from us, not from Washington. That was his message before Obama co-opted it, and it's still his message today.

This is a speech that I first heard on Democracy Now, but now I've taken the transcript and added some hyperlinks if you are curious (as I was) about some of the suprising things that Chomsky talks about. For example, did you know the Obama campaign won the largest award in the advertising industry? I didn't. And why did the advertising industry award a political campaign it's highest honor? Because Obama had a tremendous sales presentation- and enough people purchased brand Obama, that now he's heading to the White House. Chomsky also points out that this was not a landslide election. Oh sure, the electoral college results make it appear as if it were, but the two major candidates were only separated by some 7 million votes. And did you believe the stories about record turnout? Not true. But it sure was a great sales job, so he deserves the advertising industry's highest honor. He beat out Apple- can you imagine? Obama ran a better sales campaign this year than the people who brought you the ubiquitous iPod. But the product is already turning out to be different than advertised- he's not going to raise taxes on the riches Americans after all, and his cabinet is filling up with warmongers.

As usual, pay special attention to the bolded sections:

Democracy Now! | Noam Chomsky: "What Next? The Elections, the Economy, and the World"

NOAM CHOMSKY: Well, let’s begin with the elections. The word that the rolls off of everyone’s tongue is historic. Historic election. And I agree with it. It was a historic election. To have a black family in the white house is a momentous achievement. In fact, it’s historic in a broader sense. The two Democratic candidates were an African-American and a woman. Both remarkable achievements. We go back say 40 years, it would have been unthinkable. So something’s happened to the country in 40 years. And what’s happened to the country- which is we’re not supposed to mention- is that there was extensive and very constructive activism in the 1960s, which had an aftermath. So the feminist movement, mostly developed in the 70s-–the solidarity movements of the 80’s and on till today. And the activism did civilize the country. The country’s a lot more civilized than it was 40 years ago and the historic achievements illustrate it. That’s also a lesson for what’s next.

What’s next will depend on whether the same thing happens. Changes and progress very rarely are gifts from above. They come out of struggles from below. And the answer to what’s next depends on people like you. Nobody else can answer it. It’s not predictable. In some ways, the election—the election was surprising in some respects.

Going back to my bad prediction, If the financial crisis hadn’t taken place at the moment that it did, if it had been delayed a couple of months, I suspect that prediction would have been correct. But not speculating, one thing surprising about the election was that it wasn’t a landslide. By the usual criteria, you would expect the opposition party to win in a landslide under conditions like the ones that exist today. The incumbent president for eight years was so unpopular that his own party couldn’t mention his name and had to pretend to be opposing his policies. He presided over the worst record for ordinary people in post-war history, in terms of job growth, real wealth and so on. Just about everything the administration was touched just turned into a disaster. [The] country has reached the lowest level of standing in the world that it’s ever had. The economy was tanking. Several recessions are going on. Not just the ones on the front pages, the financial recession. There’s also a recession in the real economy. The productive economy, under circumstances and people know it. So 80% of the population say that the country’s going in the wrong direction. About 80% say the government doesn’t work to the benefit of the people, it works for the few and the special interests. A startling 94% complain that the government doesn’t pay any attention to the public will, and on like that. Under conditions like that, you would expect a landslide to a opposition almost whoever they are. And there wasn’t one.

So one might ask why wasn’t there a landslide? That goes off in an interesting direction. And other respects the outcome was pretty familiar. So once again, the election was essentially bought. 9 out of 10 of the victors outspent their opponents. Obama of course outspent McCain. If you look at the—and we don’t have final records yet from the final results, but they’re probably going to be pretty much like the preliminaries a couple of months ago. Which showed that both Obama and McCain were getting the bulk of their financing from the financial institutions and for Obama, law firms which means essentially lobbyists. That was about over a third a few months ago. But the final results will probably be the same. And there is a—the distribution of funding has over time been a pretty good predictor of what policies will be like for those of you who are interested, there’s very good scholarly work on this by Tom Ferguson in Umass Boston, what he calls the investment theory of politics. Which argues essentially that elections are moments when groups of investors coalesce and invest to control the state and has quite the substantial predictive success. Gives some suggestion as to what’s likely to happen. So that part’s familiar. The—what the future is as I say, depends on people like you.

The response for the election was interesting and instructive. It kept pretty much to the soaring rhetoric, to borrow the cliché, that was the major theme of the election. The election was described as an extraordinary display of democracy, a miracle that could only happen in America and on and on. Much more extreme than Europe even than here. There’s some accuracy in that if we keep to the West. So if we keep to the West, yes, it’s probably true. That couldn’t have happened anywhere else. Europe was much more racist than the United States and you wouldn’t expect anything like that to happen.

On the other hand, if you look at the world, it’s not that remarkable. So let’s take the poorest countries in the Western Hemisphere. Haiti and Bolivia. In Haiti, there was an election in 1990 which really was an extraordinary display of democracy much more so than this.

In Haiti, there were grassroots movements, popular movements that developed in the slums and the hills, which nobody was paying any attention to. And they managed, even without any resources, to sweep into power their own candidate. A populist priest, Jean-Bertrand Aristide. That’s a victory for democracy when popular movements can organize and set programs and pick their candidate and put them into office, which is not what happened here, of course.

I mean, Obama did organize a large number of people and many enthusiastic people in what’s called in the press, Obama’s Army. But the army is supposed to take instructions, not to implement, introduce, develop programs and call on its own candidate to implement them. That’s critical. If the army keeps to that condition, nothing much will change. If it on the other hand goes away activists did in the sixties, a lot can change. That’s one of the choices that has to be made. That’s Haiti. Of course that didn’t last very long. A couple of months later, there was military coup, a period of terror, we won’t go through the whole record. Up the present, the traditional torturers of Haiti, France, and the United States have made sure that there won’t be a victory for democracy there. It’s a miserable story. Contrary to many illusions.

Take the second poorest country, Bolivia. They had an election in 2005 that’s almost unimaginable in the West. Certainly here, anywhere. The person elected into office was indigenous. That’s the most oppressed population in the hemisphere, those who survived. He’s is a poor peasant. How did he get in? Well, he got in because there were again, a mass popular movement, which elected their own representative. And they are the source of the programs, which are serious ones. There’s real issues, And people know them. Control over resources, cultural rights, social justice and so on.

Furthermore, the election was just an event that was particular stage in a long continuing struggle, a lot before and a lot after. There was day when people pushed the levers but that’s just an event in ongoing popular struggles, very serious ones. A couple of years ago, there was a major struggle over privatization of water. An effort which it would in effect deprive a good part of the population of water to drink. And it was a bitter struggle. A lot of people were killed, but they won it. Through international solidarity, in fact, which helped. And it continues. Now that’s a real election. Again, the plans, the programs are being developed, acted on constantly by mass popular movements, which then select their own representatives from their own ranks to carry out their programs. And that’s quite different from what happened here.

Actually what happened here is understood by elite elements. The public relations industry which runs elections here-quadrennial extravaganzas essentially- makes sure to keep issues in the margins and focus on personalities and character and so on–and-so forth. They do that for good reasons. They know- they look at public opinion studies and they know perfectly well that on a host of major issues both parties are well to the right of the population. That’s one good reason to keep issues off the table. And they recognize the success.

So, every year, the advertising industry gives a prize to, you know, to the best marketing campaign of the year. This year, Obama won the prize. Beat out Apple company. The best marketing campaign of 2008. Which is correct, it is essentially what happened. Now that’s quite different from what happens in a functioning democracy like say Bolivia or Haiti, except for the fact that it was crushed. And in the South, it’s not all that uncommon. Notice that each of these cases, there’s a much more extraordinary display of democracy in action than what we’ve seen–important as it was-here. And so the rhetoric, especially in Europe is correct if we maintain our own narrow racist perspective and say yeah, what happened was in the South didn’t happen or doesn’t matter. The only matters is what we do and by our standards, it was extraordinary miracle, but not by the standards of functioning democracy. In fact, there’s a distinction in democratic theory, which does separate say the United States from Bolivia or Haiti.

Question is what is a democracy supposed to be? That’s exactly a debate that goes back to the constitutional convention. But in recent years in the 20th century, it’s been pretty well articulated by important figures. So at the liberal end the progressive end, the leading public intellectual of the 20th century was Walter Lippman. A Wilson, Roosevelt, Kennedy progressive. And a lot of his work was on a democratic theory and he was pretty frank about it. If you took a position not all that different from James Madison’s. He said that in a democracy, the population has a function. Its function is to be spectators, not participants. He didn’t call it the population. He called it the ignorant and meddlesome outsiders. The ignorant and meddlesome outsiders have a function and namely to watch what’s going on. And to push a lever every once in a while and then go home. But, the participants are us, us privileged, smart guys. Well that’s one conception of democracy. And you know essentially we’ve seen an episode of it. The population very often doesn’t accept this. As I mentioned, just very recent polls, people overwhelmingly oppose it. But they’re atomized, separated. Many of them feel hopeless, unorganized, and don’t feel they can do anything about it. So they dislike it. But that’s where it ends.

In a functioning democracy like say Bolivia or the United States in earlier stages, they did something about it. That’s why we have the New Deal measures, the Great Society measures. In fact just about any step, you know, women’s rights, end of slavery, go back as far as you like, it doesn’t happen as a gift. And it’s not going to happen in the future. The commentators are pretty well aware of this. They don’t put it the way I’m going to, but if you read the press, it does come out. So take our local newspaper at the liberal end of the spectrum, “Boston Globe,” you probably saw right after the election, a front page story, the lead front page story was on how Obama developed this wonderful grassroots army but he doesn’t have any debts. Which supposed to be a good thing. So he’s free to do what he likes. Because he has no debts, the normal democratic constituency, labor, women, minorities and so on, they didn’t bring him into office. So he owes them nothing

What he had was an army that he organized of people who got out the vote for Obama. For what the press calls, Brand Obama. They essentially agree with the advertisers, it’s brand Obama. That his army was mobilized to bring him to office. They regard that as a good thing, accepting the Lippman conception of democracy, the ignorant and meddlesome outsiders are supposed to do what they’re told and then go home. The Wall Street Journal, at the opposite end of the spectrum, also had an article about the same thing at roughly the same time. Talked about the tremendous grassroots army that has been developed, which is now waiting for instructions. What should they do next to press forward Obama’s agenda? Whatever that is. But whatever it is, the army’s supposed to be out there taking instructions, and press work. Los Angeles Times had similar articles, and there are others. What they don’t seem to realize is what they’re describing, the ideal of what they’re describing, is dictatorship, not democracy. Democracy, at least not in the Lippman sense, it proved- I pick him out because he’s so famous, but it’s a standard position. But in the sense of say, much of the south, where mass popular movements developed programs; organize to take part in elections but that’s one part of an ongoing process. And brings somebody from their own ranks to implement the programs that they develop, and if the person doesn’t they’re out. Ok, that’s another kind of democracy. So it’s up to us to choose which kind of democracy we want. And again, that will determine what comes next.

Well, what can we anticipate if the popular army, the grassroots army, decides to accept the function of spectators of action rather than participants? There’s two kinds of evidence. There’s rhetoric and there’s action. The rhetoric, you know, is very uplifting: change, hope, and so on. Change was kind of reflective any party manager this year who read the polls, including the ones I cited, would instantly conclude that our theme in the election has to be change. Because people hate what’s going on for good reasons. So the theme is change. In fact, both parties put both of them, the theme was change. So the theme is change. In fact both parties, both of them the theme was change. You know, break from the past, none of old politics, new things are going to happen. The Obama campaign did better so they won the marketing award, not the McCain campaign.

And notice incidentally on the side that the institutions that run the elections, public relations industry, advertisers, they have a role—their major role is commercial advertising. I mean, selling a candidate is kind of a side rule. In commercial advertising as everybody knows, everybody who has ever looked at a television program, the advertising is not intended to provide information about the product, all right? I don’t have to go on about that. It’s obvious. The point of the advertising is to delude people with the imagery and, you know, tales of a football player, sexy actress, who you know, drives to the moon in a car or something like that. But, that’s certainly not to inform people. In fact, it’s to keep people uninformed.

The goal of advertising is to create uninformed consumers who will make irrational choices. Those of you who suffered through an economics course know that markets are supposed to be based on informed consumers making rational choices. But industry spends hundreds of millions of dollars a year to undermine markets and to ensure, you know, to get uninformed consumers making irrational choices.

And when they turn to selling a candidate they do the same thing. They want uninformed consumers, you know, uninformed voters to make irrational choices based on the success of illusion, slander, and effective body language or whatever else is supposed to be significant. So you undermine democracy pretty much the same way you undermine markets. Well, that’s the nature of an election when it’s run by the business world, and you’d expect it to be like that. There should be no surprise there. And it should also turn out the elected candidate didn’t have any debts. So you can follow Brand Obama can be whatever they decide it to be, not what the population decides that it should be, as in the south, let’s say. I’m going to say on the side, this may be an actual instance of a familiar and unusually vacuous slogan about the clash of civilization. Maybe there really is one, but not the kind that’s usually touted.

So let’s go back to the evidence that we have, rhetoric and actions. Rhetoric we know, but what are the actions? So far the major actions are selections, in fact the only action, of personnel to implement Brand Obama. The first choice was the Vice President, Joe Biden, one of the strongest supporters of the war in Iraq in the Senate, a long time Washington insider rarely deviates from the party vote. In cases where he does deviate they’re not very uplifting. He did break from the party and voting for a Senate resolution that prevented people from getting rid of their debts by, individuals, that is, from getting rid of their debts by going into bankruptcy. It’s a blow against poor people who’ve caught in this immense debt that’s a large part of the basis for the economy these days. But usually, he’s a, kind of, straight party-liner with the democrats on the sort of ultra naturalist side. The choice of Biden was a, must have been a conscious attempt to show contempt for the base of people who were voting for Obama, or organizing for him as an anti-war candidate.

Well, the first post-election appointment was for Chief of Staff, which is a crucial appointment; determines a large part of the president’s agenda. That was Rahm Emanuel, one of the strongest supporters of the war in Iraq in the House. In fact, he was the only member of the Illinois delegation who voted for Bush’s effective declaration of war. And, again, a longtime Washington insider. Also, one of the leading recipients in congress of funding from the financial institutions hedge funds and so on. He himself was an investment banker. That’s his background. So, that’s the Chief of Staff.

The next group of appointments were the main problem, the primary issue that the governments’ going to have to face is what to do about the financial crisis. Obama’s choices to more or less run this were Robert Rubin and Larry Summers from the Clinton--Secretaries of Treasury under Clinton. They are among the people who are substantially responsible for the crisis. One leading economist, one of the few economists who has been right all along in predicting what’s happening, Dean Baker, pointed out that selecting them is like selecting Osama Bin Laden to run the war on terror.

[laughter]

Yeah, I’ll finish. This saves me the problem of what’s coming next, so I’ll finish with the elections. Let me make one final comment on this. There was meeting on November 7, I think of a group of couple, of a dozen advisers to deal with the financial crisis. Their careers were, records were reviewed in the business press, and Bloomberg News had an article reviewing their records and concluded that these people, most of these people shouldn’t be giving advice about the economy. They should be given subpoenas.

[applause]

Because most of them were involved in one or other form of financial fraud, that includes Rahm Emanuel, for example. What reason is there to think that the people who brought this crisis about are some how going to fix it? Well, that’s a good indication of what’s likely to come next, at least if we look at actions. We couldn’t, but it won’t. You can bring this up. Ask what we expect to see in particular cases. And there’s evidence about that from statements from Obama’s website. I’ll mention just one thing about Obama’s website, which gives an indication of what’s happening. One of the major problems coming is Afghanistan and Pakistan. That’s pretty serious. Take a look at Obama’s website under issues, foreign policy issues. The names don’t even appear. I mean, we’re supposed to be ignorant and meddlesome outsiders. We’re not supposed to know what Brand Obama is. So you can’t find out that way. The statements that you hear are pretty hawkish. And it doesn’t change much as you go through the list. I’ll wrap up here. So it’s up to you to continue.