The horizon is not so far as we can see, but as far as we can imagine

Month: November 2011

Public opinion is irrelevant

When Occupy started, there were polls that showed the public supported it.  Later, polls showed that support had dropped and a majority no longer supported Occupy.  In the first case progressives were pleased, in the second upset.

I didn’t care either time.  Repeat after me:

Public opinion does not matter.

It is irrelevant.  A large majority of the population wanted a public option added to the healthcare bill.  A small majority wanted single payor.  Calls against TARP were running 100:1 to 1200:1 against.  There is no public option, there is no single payer, and TARP passed.

In Europe every government other than Iceland has been sure to never allow a referendum on austerity.  Members of the Euro-zone like Spain and Greece and Italy have not had referendums on whether to leave the Euro.  They have had elections in some cases, but both major parties are FOR austerity (it’s not clear that citizens entirely understand this, watching Spaniards talking about how they had voted against austerity in the recent election was pathetic.  They elected a government which will go even more hardcore on austerity.)

Most countries in the developed world do not have functioning democracies in any meaningful sense.  You can vote for party A, B, or C, but they will all do substantially the same things, differing only in how fast they do them and the degree of gratuitous cruelty they engage in.

Your opinion does not matter.  Politicians are almost entirely in the thrall of a neo-liberal ideology, and are almost entirely the bought and paid servants of the very rich.  If a politician does what the oligarchy wants, he or she will be taken care of, even if thrown out of office.  If they don’t, money and influence will be used against them, and once out of office they will be on their own.

Politicians do not work for you.  Neither, just to be clear, do the police.  Nothing is more pathetic than watching folks at Occupy who seem to genuinely believe the cops are on their side.

Our elites will do what they will do regardless of what public opinion is.

What matters is not “opinion”, but action.  So with regards to Occupy, all I cared about is how many people were being radicalized—whether a cadre was being formed; and how much of the population supported them in real terms.  People who would donate goods, would donate money, would spread the message actively, would go down during the day.

What I care about in general, is how many people are willing to impose costs on the oligarchy.  These can be financial costs (as when French protestors occupied a refinery), or they can be personal costs, such as heckling politicians and the rich, slashing the tires of their cars (the Argentines did that, by the way) or, if rioting, rioting where they live and work.

Understand, the true rich live in the bubble.  They fly on private jets, they travel by helicopter, if they stay in hotels they cost tens of thousands of dollars a night and have private entrances, check-ins, elevators and so on that you as a peon never see or use unless you are part of their direct servant class.  Being in the bubble means never having to deal with a human being who isn’t directly financially dependent.  These people do not care what you ‘think’, they only care if you can damage their interests.

Politicians live less in the bubble.  You can reach them, and let them know what you think.  Loudly and insistently.  At their homes.  Their restaurants.  Their fund raisers.  Everywhere they go.  Don’t “occupy Wall Street”.  Occupy Bloomberg.  Go everywhere he goes, and make his life living hell.  That’s a cost to him.

Until politicians fear you more than they fear the rich and covet the favors and money of the rich, they will continue to serve the rich first.  Their salaries are not that important to them, they do not work for you, and they don’t fear you enough.

But that won’t change because of “opinion”.  Opinions don’t matter in aristocracies or oligarchies, and that’s what we are creating, what we’re heading towards.  What matters isn’t what the public thinks, what matters is what the public does which has a tangible, real, cost to politicians or their masters.

So I no longer care about polls in almost all cases.  They don’t matter.  Likewise most elections: elect whoever you want, the policies will remain the same except on the margins as long as the politicians don’t work for you, but for the rich.

Your “opinion” is irrelevant.  The powerful do not care what you think.

What’s happening in Europe is what matters: rules of the financial rich

The oligarchs have taken down two governments in the past two weeks – Italy and Greece.  The idea that the Mario Monti, the new PM of Italy, is something wonderful, is deranged.  Note that once again, neither an election nor a referendum was allowed.

If you want to save the Euro and some form of European prosperity, there is only one solution, the European Central Bank (ECB) must do what it keeps insisting it won’t do, it must buy Eurobonds from members.  And it must buy them at fixed prices.  Italian, Greek, French, German bonds will be issued at X price, and if insufficient investors want to buy at that price, tough, the ECB will buy.  If this causes inflation, great, Europe needs inflation right now.

Even France and to a lesser extent, Germany, are coming under attack.  However France is under significant attack, and Merkel and the ECB seem unwilling to really do anything about it.  France has the option to go off the Euro in a way that most other countries don’t.  The issue with going off the Euro is simple: oil prices.  You now have to buy oil with your lousy currency, which is even more worthless than the Euro.  But if you happen to control countries that have oil, like France does (for example, France is mostly in control of Libya right now, not the US), then hey, sign some long term contracts and voila.  It is not written in stone that prices must be set on open bid markets.

Which leads us to the sudden surge in the price of oil to $107 a barrel.  On the face of it, this is crazy.  Yes, the US has had a bit of a recovery, but Europe is going hard core austerity.  But this is the game the hot money is playing: they move out of bonds and into oil, out of oil and into bonds.  $107/barrel oil means the US recovery (such as it is, which isn’t much) isn’t going to last much longer.

Being rich is about being liquid when everyone else isn’t, so you can buy up assets on the cheap.  When the rich are properly under control (ie. when you keep them poor and terrified of government and the people, as they should be) they can’t create such buying opportunities, they have to wait for them, and the government makes it so that the rich can’t take too much advantage of them, because taking advantage of them means taking advantage of other people when they’re most vulnerable.

Right now the rich can and are crashing asset prices by forcing countries into austerity through attacks on their currencies and control of their elites.  They then buy up assets for fire-sale prices.  (The history of fire-sale is worth commenting on.  Crassus, the Roman Senator of the first triumvirate, had a fire fighting team.  When a fire broke out they’d go to the fire, fight off the other fire teams, then Crassus would buy the burning buildings from their owners, negotiating as they burned.  If they refused to sell, well, they lost everything.)

These attacks on currencies are deranged.  The countries are not in that much difficulty, certainly the idea that France is in enough difficulty to be under attack is crazy.  These attacks are about power: the global rich were bailed out after the crash, now they are using their hot money in attack after attack, demanding austerity, which will cause semi-permanent depression in those countries which accept it.  That allows them to buy up what they want, keeps their labor costs down, and lets them divert what money they spend on investment which creates actual real economic growth into developing countries which are cheaper for them.

But watching European leaders respond has also made clear that they are either compromised, ideologically neo-liberals or completely ineffective.  Watching the ECB insist that it won’t just buy bonds has been particularly amusing, because if the ECB won’t defend even France, the Euro is in great danger of not existing in a few years, and if the Euro doesn’t exist, neither does the ECB, which means all those central bankers will be out of jobs.  They won’t even act to save their own jobs.

All of this is crazy.  The financial elites are on a plundering spree, gleefully using their power to force entire nations into poverty, blackmailing governments into huge payouts.  Pay extra on bonds, or pay extra on oil, or hey, why not both!

The political elites are clearly either bought or completely ineffective at resisting.  If the ECB won’t buy bonds, then countries just need to leave the Euro so they can print money.  Yes, that might cause inflation and various other problems, but that is better than semi-permanent depression through austerity.

Now, what can the people do when the elites won’t allow direct referendums, and when there are elections you can only vote for parties which are all in favor of austerity?

Make them fear you.  Start as follows, which is what was done in Argentina: find their cars, those nice expensive cars, and trash them.  Every time you see someone in a suit coming from the airport, surround the car and slash the tires.

And if you’re going to riot, don’t do it in your own neighbourhoods.  Go to the parliament buildings, the bank HEADQUARTERS or to the neighbourhoods in which the rich live, and riot there.

If you insist on some form of pure nonviolence (which the European left and right don’t) then you must chain and twist tie yourselves around important areas.  Go to the headquarters and shut them down by tying yourself up to all the entrances.  Twist ties aren’t just the cop’s friends, they are yours.  Love them and learn how to use them.

The elites will only respond when they feel your pain.  And they will only feel it if you make them feel it.

The Occupy Education Continues

A huge coordinated attack in multiple cities occurred last night, in which even journalists were thrown in jail.  Many protestors are being denied access to lawyers.

Bloomberg and the police are in direct violation of a court order to allow protestors back into the park.

In other words, the law has been broken, openly and nakedly.  There will be no legal consequences for doing so which matter.

But the NY protestors built barricades while defending themselves, and they’re surrounding the cops now, at the park.  In Oakland, the General Assembly refused to pass a resolution banning all violence and condemning all vandals.

Radicalization continues.  The education continues.

The law in the US is, and has been for years, a tool which is used as a weapon.  Some people are given a pass, others are hit with the full force of the law.  That is to say, there is no rule of law in the US, it is a nation of people, not laws.  This is well known in certain circles, but needed to be shown to others at the end of a nightstick.

I’m proud of the Occupy people, however, especially the Oakland bunch.  A fool doesn’t learn even from their own experience.  The occupiers are proving that many of them aren’t fools.

We’re years from the endgame, Occupy isn’t going to convince the elites to do the right thing, it is, in fact, convincing them to do more of the wrong things.  OWS is necessary, but insufficient.

And the elites certainly are fools.

In Flanders Fields

by John McCrae

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.

How OWS actually works

Read.  I will add that this account jives with what I have heard through other sources.

(No, OWS is not leaderless, and the General Assembly is heavily managed.)

The question about OWS has always been how it will metastasize.  That remains in the air.  At the current time, one ideological fight is over absolute non-violence, and an attempt is being made by many in the Oakland/SF area to drive the anarchists completely out of the movement.  Problem being that since non-violence is the rule, they have to rely on the police to remove the anarchists and the police aren’t cooperating any more.

What passes for smart on the Greek Debt Crisis

is profoundly stupid and misleading.  Over at Americablog I stumbled across a post written by Kevin Drum on the Greek debt crisis, a post which was also linked to approvingly by Digby.  It is what passes for smart on the left, these days: superficially correct, but riddled with massive assumptions.  Back when blogging was my job, I took out garbage like this regularly, these days I do it rarely, but I’m going to tackle this one because the embedded assumption aren’t just sewage, they are toxic to dealing with the current depression we’re in. Let’s start with the New York Times (I incorrectly attributed this first quote to Kevin Drum, for which I sincerely apologize):

A return to the drachma is unlikely to offer a quick cure for Greece’s ills. Default on the nation’s $500 billion in public debt would become a certainty, depositors would take their money out of local banks and, with a sharp devaluation of as much as 50 percent, inflation would loom. A return to the international credit markets would take years.

It didn’t take years for Argentina when they defaulted.  When Iceland told Europeans to go take a long flying leap of a short pier, it didn’t take them years.  In fact, my best guess is it would take a year, maybe less.  There is too much money chasing far too few returns.  Contrary to the idea that there isn’t enough money in the world, the problem is that there is too much, and it is chasing diminishing returns.  Remember a default isn’t a bankruptcy, in a default Greece says “we aren’t paying this back as scheduled, we’ll pay you back… eventually”.  My suggestion would be to transfer it into 100 year bonds with 1% interest.  If creditors don’t like that they don’t have to take it, they can then try and collect on their credit default swaps, but if they make that claim, the Greek government considers that debt cancelled (you don’t get paid twice.)

Moreover, once Greek returns to the Drachma, it can print money.  At that point it can’t default on any new bond issues as long as they are issued in Drachma. On to Kevin Drum:

Here’s the thing, though: Greek debt is largely held by German banks that made the loans. [See update below.] If Greece has been irresponsible, so were the German banks that happily loaned out the money. So if Greece defaults, the banks go kablooey. But they’re too big to fail, which means the German government would be forced to bail them out. And guess where the bailout money comes from? Tax dollars.

This means that German taxpayers have a bleak choice. They can shovel lots of money to Greece to keep them from defaulting, or they can refuse, and then shovel lots of money into German banks to keep them from collapsing. Either way, German taxpayers are going to foot the bill.

No, no they don’t have to bail out the banks.  Not for the full value of the default (if Greece just said “we won’t pay”, as opposed to “we’ll pay at some point”.)  The banks have shareholders and bondholders.  Those institutions and people take the losses.  Some of them are public (pension funds, etc…) but many of them aren’t.  Let them eat their losses.  The banks go under, you refloat them, but the cost of doing so is far less than paying off all the bad loans, because the private actors have taken their losses and any excess losses, well, they’re just written off.  Same as when you realize cousin Fred ain’t ever paying you back than $100.  It’s gone.  Done.  Over with.

The only reason “all the debts” must be paid off is because the rich demand it.  They don’t want to take their losses. This is what should have been done in the US.  It is what should be done in Europe.  It is what our lords and masters refuse to do at all costs, because the people who own them, or they themselves, or their friends, or their lovers, are the ones who will take the bath.

(on defaulting and going to the Drachma)

But it puts Greece into a death spiral. They can’t pay their debts, so they cut back, which hurts their economy, which makes them even broker, so they cut back some more, rinse and repeat. There’s virtually no hope that they’ll recover anytime in the near future.

According to the IMF, hardly an organization that wants countries to default, the effect on the economy of defaulting is one year of sharp pain, followed (perhaps) by a few years of lesser growth than otherwise.  In other words, not that bad, and no worse than Greece has already suffered.

More Drum:

If Greece exits the euro, it will become terrifyingly obvious that other weak countries might exit too. Portugal, Spain, and Italy are the obvious candidates. Investors, spooked at the thought of their money being stuck in a country that might exit the euro and devalue all its bank deposits, would start huge runs on banks in those countries. The ECB would have to intervene and provide liquidity without limit. It would be a disaster.

Uh huh.  Or those countries could simply slap on currency controls, which experience shows (most recently and clearly in the Asian currency crisis of the 90s), works.  And permanent austerity, which is what France and Germany want to impose on Italy, Greece and Spain (with the apparent cooperation of their political classes, I might add) will erode the value of the bank holdings in time anyway.  Drum’s not exactly wrong, but it’s the other options, which never get mentioned, which matter.

There are economic tools for dealing with these issues.  Capital and currency controls are one of them, the distinction between default (we’ll pay you eventually, as opposed to we’ll never pay you) is another.  The question of who is being bailed out (private investors, in large part) is another.  And bailing out those investors is a political act, their money is their political power.  The current political class, who is complicit with the current monied class, of course wants to bail them out.

All of this is before we even get to the horribly anti-democratic nature of all of this: the repeated refusal of the political class to allow referendums, the complicity of all major political parties in the process (notice there is no party to vote for if you want to default), and so on.

There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system.   Calls can run up to 1000:1 against TARP and it will pass.  Strong majorities can be for or against particular policies and if the elite disagrees, that’s all that matters.  There are no parties to vote for if you are against the current system.

In a sense, this is fair.  Westerners thought that they could have consumer democracy: they didn’t have to participate in it except at election time, when they would vote for parties and platforms paid for and produced by someone other than them.  Coke(tm)/Pepsi(tm) politics – you have a choice, you can choose either Coke or Pepsi!  Politicians aren’t paid by you (their salaries are the least part of their real income) why would you think they care about your concerns?

You don’t pay for politicians or politics.  This is the Facebook rule: if you don’t pay the freight, you aren’t the customer, you are the product.  Politicians compete for the money and favors of the rich, and what they sell is the ability to wrangle you: to pass the austerity bills, to cut the benefits, to privatize the jewels of the public system, to force through the multi-trillion dollar bailouts.  They control government for the benefit of the rich.

And the rich pay all the way down the line.  They control the media, right down to the bottom, to make sure that what is discussed is what they want discussed, in the terms they want it discussed.  That default isn’t that bad: forbidden.  That currency controls mitigate damage in these circumstances: forbidden.  That lenders will lend to defaulting countries almost immediately: forbidden.

I will discuss the pointlessness of media and “popular sentiment” in a post soon.  In the meantime, realize that even the supposed left feeds you intellectual sewage on a regular basis.

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