Archive for the ‘Individualism’ Category

“Liberalism is in crisis and illiberalism in the ascendant”

29/07/2016

James Traub argues that liberalism is not working, “I was in Poland this year, I asked everyone how a nation that exemplified the commitment to liberal democracy had elected a party, called Law and Justice, which openly appealed to nationalism, xenophobia, and religious traditionalism. Quite a few people responded with a question of their own: “What about Donald Trump?” Wasn’t the United States, that is, heading in the same direction? Yes, I came back, but since liberal principles are more deeply embedded in American voters and institutions, Trump won’t win. Now I find myself wondering: Isn’t that more or less what David Cameron and other advocates of staying in the European Union told themselves about British voters? I wonder if the West is sleep-walking toward “illiberal democracy,” the ideology championed by Hungary’s Viktor Orban, emulated by Poland’s Law and Justice, and implicitly endorsed by Trump and many of the Brexiteers. Turkey’s increasingly autocratic President Recep Tayyip Erdogan has gone further down this road than anyone. These populists win elections by rallying citizens against what they describe as “liberalism” — secular hostility to majority religious values, a cult of individualism that undermines the collective good, a concern with immigrants rather than citizens, and a celebration of the free market that weakens state control. (See Orban’s 2014 speech on the subject.) It would be a mistake to think that those cynical tactics can’t work in the more evolved democracies of Western Europe. Austria, to take one more example, may elect Norbert Hofer, a frank Islamophobe who advocates widespread gun ownership to counter an alleged immigrant threat, in a presidential election to be restaged later this year”.

Traub goes on to point out “These are the stakes I was thinking of when I wrote last week that elites had a moral obligation to stand up to the politics of resentment rather than exploit them. I now understand, from the torrent of abuse I received, that a great many readers thought I was saying that people who take issue with the forces of globalization, whether from the left or the right, should defer to elites, the high priests of the globalized world. That’s a repellent thought. I regret the use of the word “elites,” which conjures up the Trilateral Commission or a Masonic temple. I won’t use it again. Now I will try to explain myself. Illiberal democracy is a highly effective political strategy because many of the constituent principles of liberalism, especially the ones seized on by the populists, are intended to serve as bulwarks against majoritarianism. Perhaps the first liberal was James Madison, who in the Federalist Papers made the case that democracies, by their nature, endanger the rights of political minorities and must design institutions to protect those rights. Over the course of the 19th century, liberalism evolved to include advocacy of civil liberties, free markets, and activist government. The high-water mark of liberalism was the mid-20th century, when the world was threatened by the totalitarian nightmares of communism and Nazism. For its great exponents, like George Orwell, liberalism meant anti-totalitarianism”.

He makes the argument that “there are good reasons why liberalism is in crisis and illiberalism in the ascendant. Political leaders must find a way of dealing with the breakdown of the liberal order if they are to protect and preserve its basic principles. As I’ve written in previous columns, even Chancellor Angela Merkel, who has bravely opened Germany’s doors to hundreds of thousands of Syrian and Afghan refugees, now understands that she has left her public too far behind and has instead struck a deal with Turkey to stanch the flow of migrants. And free trade has become politically toxic and will continue to be unless more is done to buffer the effects on factory workers and others who see themselves as getting the short end of the globalization stick. Policy must change both to cushion globalization’s effects and to create the political space so that liberal-minded leaders can pursue sound policies. But there is no policy change that will mollify people who can’t stand the way the world is going and want to return to a mythical golden age where women and Mexicans and refugees and gays and atheists didn’t disturb the public with their demands. Populist leaders have a message for them: Liberalism is a plot to keep you down. Social tolerance threatens traditional culture, an independent media tells self-interested lies, and extending rights to accused terrorists undermines public safety. (See this very bizarre 2006 speech by Polish politician Jaroslaw Kaczynski.) Above all, as Turkey’s Erdogan tirelessly repeats, those who don’t share the majority’s views — ethnic minorities, secular elites, journalists — are enemies of the state and must be marginalized or crushed”.

Correctly he points out that these trends are made more dangerous by the post-truth age in which we live, “This is why I argued that rationalism itself is at stake and that the cynical fellow travelers of the illiberal democrats are feeding an anti-intellectual narrative. Michael Gove, until recently a contender to be England’s next prime minister, answered predictions — correct ones, as it turned out — that Brexit would lead to disaster by saying, “People in this country have had enough of experts.” The word “expert” is, of course, the pejorative term for someone who knows what he or she is talking about — like Gove, I imagine, who graduated from Oxford and spent years as a minister in Conservative Party governments. What Gove was actually saying was that people should be free to build gratifying fantasies free from unpleasant facts. Similarly, the Republican Party has spent years carving the path down that Donald Trump is now careening by telling voters that America’s borders are being overrun, a national default would bring no lasting harm, global warming is a hoax, and so on and so on. It wasn’t only Trump, but Ted Cruz and others, who campaigned on the need for massive increases in border security. Republican primary voters ate up this rhetoric — even though net immigration from Mexico is now flat. America has had enough of experts”.

He argues that “Absent a collective faith in reason, very little stands in the way of the gratifying fantasy, or the dreadful nightmare, that populists’ forge from voters’ hopes and fears. Of course, I don’t believe that deference to expertise, to technocratic knowledge, or even to science will defeat the scourge of illiberal democracy. Only good politics drives out bad politics. Perhaps only good populism can drive out bad populism. An obviously irate President Barack Obama recently argued that he, not Trump, was the real populist in American politics — since he cared about working people and Trump doesn’t. In fact, Obama’s remote, cerebral manner has, if anything, whetted the public’s appetite for a snake-oil salesman like Trump. We will always have charming scoundrels among us, but reckless populism is more pernicious than it was a decade or a generation ago. That’s not because Donald Trump and Viktor Orban are worse than their predecessors, but because so many people in the West feel cheated or betrayed by the impersonal forces of globalization and are seeking an alternate reality to occupy, whether Little England or Industrial Age America. The cynics who provide comfort for those delusions are as dangerous as the extremists”.

 

 

Labour seeks tax justice

10/04/2015

As the 2015 UK general election continues it seems the voters have a stark choice. The Labour Party has said it will abolish the role that allows those that are not domiciled in the UK, and therefore pay no real taxes. The Tories meanwhile have said nothing about the patently immoral rule that benefits only the tiniest portion of the wealthiest.

A report from the Guardian notes “Labour has accused the Tories of deliberately misleading voters by editing an interview with Ed Balls as a row broke out over a pledge by Ed Miliband to abolish the non-domicile tax status for anyone living in Britain for more than three years. The Tories moved to unpick the announcement by the Labour leader by releasing a video of a BBC interview back in January in which the shadow chancellor said that abolishing non-dom status might lead to a fall in tax revenue. But the Tories edited out a crucial final sentence in which Balls told BBC Radio Leeds on 9 January: “But I think we can be tougher and we should be and we will.” Labour seized on the Tory editing of the Balls interview to accuse the Tories of misleading people to defend their refusal to tackle tax avoidance. The shadow chancellor blogged: “The Tories have edited my words from January in an attempt to deliberately mislead people because they can’t defend their own refusal to act on tax avoidance”.

Labour have a point. When the Tories should be agreeing with Labour to abolish this unjust and immoral rule that seeks to have people in London in the hope that their wealth would “trickle down” they in fact are more comfortable to play politics than seek the common good and protect those who do pay taxes and protect the poorest in society.

The report goes on to mention “The row has lit up Britain’s general election campaign after Miliband promised to abolish the non-dom rule, which allows many of Britain’s richest permanent residents to avoid paying tax in the UK on their worldwide income, for those who are based in Britain for more than two to three years. Labour said the rule, introduced by William Pitt the Younger in the late 18th century, has been open to abuse and offends the moral basis of taxation. Everyone who has made the UK their permanent home should pay full UK tax on all their income and gains, Miliband argued”.

The piece adds “George Osborne, conscious of poll findings that the Tories are seen as the party of the rich, realised overnight that he had to tread carefully in response to a Labour plan to crack down on multi-millionaires. Osborne therefore moved to unpick the announcement by saying that Labour was merely planning to tinker with the non-dom tax status on the grounds that the rule would remain in place for beneficiaries who stay in the UK for under two to three years. The Tories then released a video of the shadow chancellor’s January interview in which Balls suggested that abolishing the non-dom rule could lower tax revenues by encouraging some wealthy people to leave the UK. The edited video shows Balls saying: “I think that it is important that you make sure the non-dom rules work in a fair way. I think they were too lax in the past. Both the last Labour government and this Conservative government have tightened them up”.

In an attempt to defend these people who generally do not pay tax and yet use all the services in the UK some have argued that there will be a flight from the UK. However, this argument overlooks the obvious fact that they pay only £90,000 a year, at most, on an income that is millions a year. Whatever “loss” to the coffers of the state would be minimal as so little money is raised anyway. Labour should have launched this policy years ago but all the Tories could do was pick at a few words while avoiding the larger issue.

Cruz joins Obamacare

29/03/2015

Ted Cruz is signing up for ObamaCare one day after launching his presidential bid. Cruz, one of the biggest ObamaCare foes in Congress, found himself without health insurance after his wife, an executive at Goldman Sachs, announced she is taking an unpaid leave to join his campaign. He will now head to HealthCare.gov to sign up for a plan. “We will presumably go on the exchange and sign up for health care and we’re in the process of transitioning over to do that,” Cruz told the Des Moines Register on Tuesday. The Texas senator was previously covered by a Goldman Sachs plan that was worth at least $20,000 a year, according to a 2013 report from The New York Times. Cruz has previously boasted that he was not forced to buy coverage under ObamaCare. As a freshman senator in 2013, the Republican firebrand’s efforts to defund the ObamaCare reform law led to a government shutdown and rocketed him to the national stage. Lawmakers can receive subsidies to pay for their health care through the exchanges, but it was unclear whether Cruz planned to accept one”.

Intervention of Cardinal Nichols

09/03/2015

A report from the Telegraph details the intervention of Vincent Cardinal Nichols in British politics, urging justice. It opens “The leader of the Catholic Church in England and Wales has condemned the Government for presiding over “shocking” levels of poverty and deprivation. Cardinal Vincent Nichols called on Tuesday for Catholics to judge candidates in this year’s General Election by what they intend to do to improve the lives of the poor. He said: “I’ve commented before on what I believe to be some of the unintended consequences of social welfare reform we see. I repeat; it’s shocking that in a society that is as rich as our there are people, even people in employment, dependant on food banks and hand-outs.” The Cardinal was speaking at the launch of a leaflet being sent to all Catholic parishes in England and Wales, urging members of the church to become actively involved in the political debate in the run up to May’s election”.

The report mentions that “He emphasised that it was the duty of Catholics, and other citizens to engage in discussion, cast their votes and ignore commentators such as Russell Brand, who claim there is no point voting because ‘all politicians are the same’. Cardinal Nichols said: “I’d ask them to pay more attention to me than to him [Brand]. We are citizens and we are called on to take part in society. Stir yourself”.

The piece goes on to state “The Cardinal’s call for more to be done to help the worse off follows a letter issued by the Church of England’s bishops last week, attacking the effect of the coalition’s policies on the poor. In their letter Anglican bishops condemned the legacy of Thatcherism and its emphasis on consumerism and individualism. The 52-page letter was attacked by Conservative politicians as being a ‘shopping list’ of left-wing demands.  Although the Catholic bishops’ letter to parishioners neither attacks nor endorses any party by name, it urges voters to decide on the basis of where candidate stand on the issue of poverty”.

The article adds “In its letter the Catholic Bishops’ Conference of England and Wales urges Catholics to ask “where does your candidate stand on directly helping the poorest and most vulnerable people in the UK and also helping to transform their lives”. Addressing education policy it says politicians should be trying to “ensure the best outcomes for the poorest children.” The four-page letter, 700,000 copies of which are being sent to parishes up and down the country, bemoans the fact that “rising inequality, increased loneliness for older people, job insecurity and over stretched community services” has made life more difficult for many and calls for business and the private sector to do more to meet people’s needs. “The market economy exists to serve humanity. People are not merely economic units to be exploited,” it states”.

The report rightly ends “The Cardinal repeated the Catholic church’s strong support for the living wage, saying that party candidates should be quizzed on their attitude to fair pay. He said that all Catholic organisations and charities tried to ensure not only that they paid their employees the Living Wage, and – in the case of those working in the capital – the London Living Wage, but that the church’s suppliers and contractors did so too.”

 

 

Welby poses some questions

21/01/2015

An article in the Daily Telegraph has reported on a new book launched as the 2015 General Election campaign begins, informally at least.

The piece starts “Britain under the Coalition is a country in which the poor are being “left behind” and entire cities “cast aside” because politicians are obsessed with Middle England, the Church of England says today in a damning assessment of the state of the nation. In a direct and unapologetically “political” intervention timed for the beginning of the General Election campaign, the Archbishops of Canterbury and York, warn party leaders are selling a “lie” that economic growth is the answer to Britain’s social problems”.

Yet the same newspaper defends the fact that the Church of England is a state church. At the same time they moan that the Church of England has a voice in politics. Which is it to be? The other alternative interpretation is that they are against those with religious views having a say in the public sphere at all.

The real reason for the paper’s reaction was the questioning by the Church of England of a bankrupt economic theory that has destroyed the world and brought misery to millions, while making a small elite even wealthier. This is the true reason for the reaction of the paper to the comments by the bishops.

The report goes on to note that the prelates were “Questioning David Cameron’s slogan “we’re all in this together” they condemn inequality as “evil” and dismiss the assumption that the value of communities is in their economic output as a “sin”. Britain, they argue has been “dominated” by “rampant consumerism and individualism” since the Thatcher era, while the Christian values of solidarity and selflessness have been supplanted by a new secular creed of “every person for themselves”. And while London and the South East forge ahead, much of the rest of the country is still “trapped in apparently inevitable decline”, they argue”.

It is true that the South East has been almost recession proof, apart from the parts that are already deprived which will soon be filled with wealthy people and push those who have been living there for years out, but this is not the fault of Cameron per se but is more down to geography and other long held factors that he has chosen not to fix. In reality the point of the bishops is correct. A toxic individualism has prevailed and is bearing its rotten fruit in the form of societal decay and sin.

The piece adds that “The challenge to politicians and voters alike is contained in a new volume of essays to be published next week, edited by the Archbishop of York, Dr John Sentamu, and including lengthy contributions from the Archbishop of Canterbury, the Most Rev Justin Welby, the former Labour Cabinet minister Lord Adonis and others. It sets out an excoriating critique of a country “ill at ease with itself” amid a widening “gulf” between rich and poor, between the capital and the rest of the country and between politicians and voters. The book, entitled “On Rock or Sand?”, explicitly invites comparisons with Faith in the City, the Church of England report published 30 years ago which was attacked by Conservatives as “pure Marxist theology””.

Yet this is exactly the kind of thing Rush Limbaugh said about Pope Francis. All this has done however is made fools of those who attack the Gospel and its values while they try and defend greed, sin, gross inequality, materialism and excess.

The article ends “The book characterises the welfare state as the embodiment of the Christian command to “love thy neighbour” and warns that people should not rely on what the founding father of free-market capitalism Adam Smith called the “invisible hand” of the market to create a fair society”.

It closes “Archbishop Welby provides a bleak assessment of the economic recovery in Britain claiming that “entire towns and regions” have been excluded and “trapped in an apparently inescapable economic downward spiral”. “Our economy appears to be, in one sense, a tale of two cities – one being a growing and constantly improving London (and the South East generally), and the other being most, but not all, other cities, alike in that they are each trapped in apparently inevitable decline,” he writes. Spending cuts have, he adds, helped widen that gap. “The hard truth is that many of these cities are in what appear to be lose-lose situations”.

The report concludes “But the archbishops go on to reject what they characterise as an obsession with economic growth as the solution to social problems. “There is a general social assumption that the economy has the power to dictate what is and is not possible for human beings,” Archbishop Welby writes. “We believe that if we can fix the economy, the fixing of human beings will automatically follow. “That is a lie. “It is a lie because it is a narrative that casts money, rather than humanity, as the protagonist of God’s story.” Dr Sentamu adds that a post-war vision through which the welfare state and NHS developed has “given way to an individualist and consumerist vision, with public goods such as health … and education … increasingly becoming privatised, where society has become a market society, with everything going to the highest bidder and the poor being left behind in the unceasing drive to increase the nation’s Gross Domestic Product.” Setting out his own vision, Archbishop Welby adds: “Our human journey is not a journey of individuals, it is a journey held in common, and no individual can safely be left behind”.

In a related article, though hardly a surprise, David Cameron defends a system based on radical inequality, mass poverty, unemployment, deprivation and greed, “David Cameron has said that he “profoundly disagrees” with the leaders of the Church of England after they accused the Coalition of creating a country in which the poor are being “left behind”. The Prime Minister pledged to speak “vigorously in defence” of his Government’s economic record after the Archbishops of Canterbury and York accused him and Britain’s other political leaders of selling a “lie” that economic growth is the answer to social problems”.

The sad fact is that all the figures say that Cameron is wrong. They all point to the fact that poverty levels are rising and people are being punished for being poor with all the ignorance that comes with this. They are accused of being lazy but politicians in safe seats with half a dozen directorships to top up their income are in no way fit to judge in such harsh terms the lives of others.

The report mentions that “Cameron insisted that the Coalition has is successfully tackling poverty and that improving people’s lives across the country can only be done when the economy is strong. He said: “Also, we are tackling poverty by giving 1.75million more people a job in our country. Actually under this Government inequality has fallen so I don’t think the picture they paint is accurate. “I look forward to debating and discussing it with them. They have a right to speak out as long as they don’t mind when I speak pretty vigorously in defence of the excellent economic and social record of this government. “The fact is you can’t do any of these things in terms of tackling poverty, growing opportunity, rebalancing the economy unless you have a strong economy and we have restored or are restoring the strength of the British economy.” The Archbishops said that Britain has been “dominated” by “rampant consumerism and individualism” since the Thatcher era”.

Francis echoes Benedict

01/12/2014

John Allen writes about the recent speech of Pope Francis to the EU Parliament in Strasbourg.

He starts “History’s first pope from outside the West traveled to the heart of secular Europe Tuesday and delivered a sharp wake-up call, warning European leaders that the continent risks irrelevance if it doesn’t recover its founding values, drawing in part on its Christian legacy. Pope Francis delivered back-to-back speeches to the European Parliament and the Council of Europe that amounted to a strong call to Europe to get both its social and its spiritual house in order”.

Allen notes that “Francis bluntly said today’s world is becoming ‘less and less Eurocentric,’ that Europe often comes off as ‘elderly and haggard,’ that it’s less and less a ‘protagonist’ in global affairs, and that the rest of the planet sometimes sees it ‘with mistrust and even suspicion.’ ‘Where is your vigor?’ Francis asked the Council of Europe, deliberately speaking through it to the entire continent. ‘Where is that idealism that inspired and ennobled your history?’ Despite being on the ground just four hours, Francis’ presence seemed historic since, in a sense, the New World was meeting the Old Continent”.

Allen goes on to summarise the points made by the pontiff, “Francis argued that many of the specific political problems facing Europe, from immigration and extremism to rising youth unemployment, have a spiritual core. He denounced what he called a ‘cult of opulence which is no longer sustainable,’ based on exaggerated individualism that breeds violations of human dignity. To shake off its malaise, he said, Europe needs to recover a sense of values and mission, one foundation for which is religious conviction”.

Allen gives commentary “Heading into the trip, Francis was expected to engage the hot-button questions facing Europe’s political class: rising immigration and youth unemployment, gains posted in May by far-right nationalistic movements, and backlash against austerity measures imposed by many governments as part of the ongoing Eurozone crisis”.

Notably he makes the point “Some of the pope’s most passionate language came in a call for ‘fair, courageous and realistic’ immigration policies, especially on behalf of waves of poor migrants from Africa and the Middle East who often try to reach Europe by making perilous crossings over the Mediterranean Sea. ‘We cannot allow the Mediterranean to become a vast cemetery!’ the pope said, referring to the estimated 20,000 people who have died over the past two decades attempting to make the journey. As other victims of what Francis once again denounced as a ‘throw-away culture,’ Francis cited ‘the terminally ill, the elderly who are abandoned and uncared for, and children who are killed in the womb.'”

Allen neatly summarises the point of the speech made by Francis, who “rued what he called a ‘great vacuum of ideals which we are currently witnessing in the West,’ including ‘forgetfulness of God.’ In place of a humanistic vision, he said, what Europe breeds today are ‘uniform systems of economic power at the service of unseen empires.'”

Allen ends “Francis’ predecessor, Pope Benedict XVI, was often accused of being ‘Eurocentric,’ in the sense of focusing excessively on European culture. To date, Francis has faced the opposite charge, often being seen as neglectful of Europe in favour of focusing on zones of greater growth and dynamism for the Catholic Church today, such as Asia and Africa. Yet Francis’ twin speeches on Tuesday suggested that substantively he’s got much the same agenda for Europe as his two predecessors, and both texts frequently cited John Paul II and Benedict XVI. In fact, his Strasbourg speeches were arguably the most ‘Ratzingerian’ texts of Francis’ papacy, featuring references and vocabulary often associated with Pope Benedict: The risks of ‘dictatorships of relativism,’ as well as a philosophical tendency to see human beings as radically isolated ‘monads.’ In other words, this may have been a pope from the New World, but the message for the Old Continent hasn’t changed: If Europe wants to save its soul, it needs to make room for values inspired in part by its Christian past”.

The wonders of the free market

18/10/2014

Let’s say you are someone who has recently returned from traveling in West Africa. You have visited an Ebola-ravaged country. You are understandably worried about contracting the disease during this worst-ever epidemic and, upon returning home, you catch a fever. You might then go online to try to find information about the disease and to assess whether the crippling fear you are experiencing is, in fact, well placed. That search might lead you to Ebola.com, but little do you know that that site is nothing but a moneymaking ploy. In today’s information economy, there are few more useless money-grubbers than domain squatters, and that is exactly who owns Ebola.com. Blue String Ventures, the company sitting on the domain, is asking for a mere $150,000 to transfer ownership of the site”.

“The euro crisis has not gone away”

03/09/2014

An article in the current issue of the Economist discusses the latest phase in the endless euro crisis. The piece argues that unless there is real growth in Germany, France and Italy then the economy of the eurozone and the euro itself will slip, violently, into history.

It opens “Just a few months ago the euro zone’s leaders believed that, having weathered the storm, they were set fair at last. Buoyed by the promise of Mario Draghi, the president of the European Central Bank, to do ‘whatever it takes’ to support the currency, confidence had seeped back into the continent. Growth seemed to be returning, albeit at a slow pace. Troubled peripheral countries were recovering, after bail-outs and painful measures to cut budget deficits and improve competitiveness. Unemployment, especially among the young, was still desperately high, but at least in most countries it was falling. And bond spreads had narrowed sharply, as financial markets stopped betting that the euro would fall apart”.

Of course nothing could be further from the truth and as ever those running the EU where deluding themselves. Countries like Ireland, Greece and Portugal are still mired in debt with non functioning banking systems. All of these countries will need a second “bailout” in order to finally correct some of the problems that still exist in them. However, to do this would be to admit failure and the EU, and ECB and Merkel are too either too proud or too ignorant to see this.

The article correctly argues that “It was an illusion. In recent weeks the countries of the euro zone have begun to take in water once again. Their collective GDP stagnated in the second quarter: Italy fell back into outright recession, French GDP was flat and even mighty Germany saw an unexpectedly large fall in output (see article). The third quarter looks pretty unhealthy, partly because the euro zone will suffer an extra drag from Western sanctions on Russia. Meanwhile, inflation has fallen perilously low, to around 0.4%, far below the near-2% target of the European Central Bank, raising fears that the zone as a whole could fall prey to entrenched deflation. German bond yields are hovering below 1%, another harbinger of falling prices. The euro zone stands (or wobbles) in stark contrast with America and Britain, whose economies are enjoying sustained growth. What started more than four years ago as a banking and sovereign-debt crisis has decayed into a growth crisis that is now enveloping the three biggest economies. Germany is teetering on the edge of recession. France is mired in stagnation. Italy’s GDP is barely above its level when the single currency came in 15 years ago. Since these three countries account for two-thirds of euro-zone GDP, growth in places like Spain and the Netherlands cannot make up for their torpor”.

The piece goes on to make the point that “The underlying causes of Europe’s new ills are three very familiar and interrelated problems. First, there is a shortage of political leaders with the courage and conviction to push through structural reforms to improve competitiveness and, eventually, reignite growth: the big countries have wasted the two years bought by Mr Draghi’s “whatever it takes” commitment. Second, public opinion is not convinced of the urgent need for deep and radical changes. And third, despite Mr Draghi’s efforts, the monetary and fiscal framework is too tight, throttling growth—which makes structural reforms harder”.

The writer focuses on France, “Different manifestations of these problems can be seen across the euro zone. But the country that most dramatically epitomises all three is France. This week its embattled Socialist president, François Hollande, was forced to reshuffle his government to eject Arnaud Montebourg who, despite being economy minister, was his own side’s most persistent critic from the left (see article). Mr Hollande, who came to office in 2012 promising a painless future, is hardly a Thatcherite reformer. But since he appointed Manuel Valls as prime minister in March, he has at least embraced the principle of public-spending cuts, lower taxes and structural reforms. In theory a new and more cohesive reforming government could make progress, but public opinion is not remotely prepared for that. Mr Hollande is not just deeply unpopular; unlike Italy’s Matteo Renzi, who has bravely made the case for (as yet undelivered) tough reforms, the French president has failed to convince voters that painful change, including a reduction in the size of the state, is inevitable. Instead, Mr Montebourg and his chums offer the beguiling notion that, if only the euro zone scraps its rules and allows bigger budget deficits and generous enough public spending, no more painful reforms will be needed, because the economy will miraculously lift itself out of danger by its own bootstraps”.

Ironically the author, and the Economist remain wedded to  a system that has led the world to its current state or moral, political and economic bankruptcy. Instead of the successful Anglo-Saxons teaching the French it should be the other way around, with the French and Germany communitarian model being seen as the model for nations around the world.

Admittedly the article does make the point that “Montebourg’s argument is all the more seductive because he is right about Europe’s third problem: excessive austerity, largely forced on the continent by Germany. Mr Draghi has just implicitly conceded that fiscal and monetary policy in the euro zone is too tight at the annual economics jamboree in Jackson Hole. He hinted that he was in favour of quantitative easing, which both America and Britain have used, and he called for fiscal policy to do more to encourage growth—a message plainly aimed at Germany’s chancellor, Angela Merkel. She is the leader who insists most firmly on sticking to the euro zone’s rules on fiscal discipline, just as it is the German Bundesbank that is most strongly against quantitative easing”.

The writer posits a deal, “Despite the gloom, there should be scope here for a bargain. If Mr Hollande and Mr Renzi can show they are sincere about structural reforms, Mrs Merkel should be willing to tolerate an easier fiscal stance (including higher public investment in Germany) and a looser monetary policy. Close your eyes, and you can imagine the three leaders working with the European Commission to complete the single market and pushing through a trade deal with the United States. Sadly, in the real world, Mrs Merkel has little reason to trust either France or Italy: whenever external pressure on them has eased, they have promptly backtracked on promises of reform. And she has just installed Jean-Claude Juncker, the do-nothing candidate, as president of the European Commission. So it will be hard. But without a new push from the continent’s leaders, growth will not revive and deflation could take hold”.

The author concludes “If the currency union brings nothing but stagnation, joblessness and deflation, then some people will eventually vote to leave the euro. Thanks to Mr Draghi’s promise to put a floor under government debt, the market risk that financial pressures could trigger a break-up has receded. But the political risk that one or more countries decide to storm out of the single currency is rising all the time. The euro crisis has not gone away; it is just waiting over the horizon”.

The other, more dramatic possibility is that the euro implodes from its laughable political foundations and undemocratic origins and takes the entire EU with it.

The purpose of profit

07/03/2014

Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it. Once profit becomes the exclusive goal, if it is produced by improper means and without the common
good as its ultimate end, it risks destroying wealth and creating poverty”

A bright future?

28/02/2014

An article in The Hill discusses the future of the Tea Party. This topic has been discussed here before but as the “movement” reaches five years old the article is woth noting. It opens, “As the Tea Party turns five years old, some of its stars gathered Thursday to argue the movement is still growing and not on the wane. Hundreds of activists met in Washington, D.C., to mark the cause’s advent, acutely aware their nascent movement faces challenges. But together, they sought to reassure themselves they’re as vibrant as ever even in the face of building criticism. The event was hosted by Tea Party Patriots to mark the fifth the anniversary of CNBC contributor Rick Santelli’s on-camera rant against the federal government’s “promoting bad behaviour” with its housing market bailouts and calls for a new “tea party” protest against President Obama, comments that many credit with sparking the movement. Favorites like Sens. Ted Cruz (R-Texas), Rand Paul (R-Ky.) and Mike Lee (R-Utah) discussed their own upset victories and promised great things for the future”.

Thankfully however the article goes beyond this and mentions the real problems behind the movement, “their words of optimism come at a time when the movement is under intense scrutiny within the GOP after suffering setbacks in recent months. Cruz and other leaders took blame from within their caucus for the government shutdown as the Republican brand sank to record lows. And despite a continued push from some Washington groups to dethrone establishment Republicans, many appear to be easily cruising in their primaries, including top targets like Senate Minority Leader Mitch McConnell (R-Ky.) and Sens. John Cornyn (R-Texas) and Lindsey Graham (R-S.C.)”.

The piece notes “Both Paul and Lee suggested that to sustain itself, the Tea Party movement needed to outline a positive agenda, and move beyond its initial focus on protests”. However, in order to do this it will need serious policy thinking, something which the movement has been lacking. Its obession with throwning out experienced incumbebts and hatred for President Obama have done nothing to assure the long term stablity or sustainability of the movement. The group has also shown no desire to move away from social causes, like gay rights, that have been all but settled.

The article adds that “Heritage Foundation Chief Economist Stephen Moore, who spoke at the event, told The Hill that the Tea Party movement needed to find that uplifting message Lee and Paul called for in order to continue to wield significant power within the GOP. ‘What the Tea Party was originally about back in 2009 and ’10 when it was really given birth was stopping the incredible excesses of Obama in terms of borrowing, spending. Now, I think to galvanise the movement you need really populist, positive, pro-growth initiatives,’ said Moore. As a former Club for Growth president and one-time Wall Street Journal editorial board member, Moore straddles the void between movement conservatism and the establishment. From his perch, he warned that the internal war in the GOP is hurting the party’s prospects as a whole”.

It goes on to note “The strict ideological adherence the party still calls for clearly still has strong pull in the party. Cruz’s opposition to a clean debt ceiling increase made it much more difficult for the GOP to allow it to pass earlier this month, and even McConnell and Cornyn had to break with their party and vote on a motion to allow the bill to proceed. Many centrist Republicans are constantly wary of crossing deep-pocketed Tea Party-affiliated groups like the Club for Growth and now Heritage Action that help dictate policy and fire warning shots with their key vote scorecards”.

The piece ends, “GOP leadership and establishment business groups have begun pushing back more forcefully against the movement. The fact that both McConnell and House Speaker John Boehner (R-Ohio) were willing to break with most of the party to help increase the debt ceiling without conditions shows that their frustration with the base may have surpassed their fear of it. While there are dozens of Tea Party challengers to incumbent Republicans, only Sen. Thad Cochran (R-Miss.) and Rep. Mike Simpson (R-Idaho) appear to be facing a real threat. Martin argued that just defeating incumbents was only part of what the movement needed to accomplish, though she said admitted that those races were what scared the GOP more than anything”.

221 years ago

21/01/2014

On this day, Louis XVI was murdered. Let us not forget the violence that swept France and Europe and the effects that still haunt the world to this day.

Just good feelings?

19/01/2014

An interesting blog post from the New York Times discusses the state of liberal Catholicism under Pope Francis. He opens”I’m written a bit about the question of what kind of reforms liberal Catholics should be actually be hoping for from Pope Francis, besides the good feelings that the pope’s rhetorical focus on social justice has inspired. In a deliberate provocation, Damon Linker raises the possibility that the good feelings are really all that the church’s liberal dissenters really want, because many of them just don’t think church teaching (or, for that matter, any kind of religious doctrine) matters anymore:

After reading an endless stream of gushing commentary by liberal Catholics on Pope Francis, I’m beginning to wonder if they ever really cared about reforming doctrine in the first place.

The seeds of doubt were planted a couple of weeks after myTNR essay was published, when I appeared on an NPR radio show to discuss the pope. I repeated my argument, but then a caller challenged me. Describing herself as a progressive Catholic, she dismissed my skepticism about the likelihood of Francis reforming church doctrine. “Doctrine for a Catholic, now, is not even an issue,” said Trish from Kentucky (you canlisten to her beginning at 24:43). “Catholics do not care about doctrine,” she said, adding, “It’s irrelevant. It’s a non-issue for Catholics.”

That, to be honest, is something that I hadn’t considered when I wrote my essay. As I indicated in my remarks responding to Trish, I had assumed all along that liberal Catholics wanted to liberalize Catholic doctrine — that they wanted to bring the church, as I wrote in TNR, “into conformity with the egalitarian ethos of modern liberalism, including its embrace of gay rights, sexual freedom, and gender equality.”

But here was a liberal Catholic telling me I’d gotten it all wrong. The pope’s warm, welcoming words are “everything,” Trish said, because doctrine, including that covering contraception and divorce, is “useless.”

There are dangers in reading too much into an NPR caller, obviously, but Linker is putting his finger on a real tension within liberal Christianity today— or, if you prefer, a real fork in the road, with one path leading in the direction that he assumed dissenting Catholics wanted to take (which seeks to alter church teaching precisely because it still believes that teaching really matters), and the other leading toward a kind of Emersonian, therapeutic, basically post-ecclesiastical form of faith, in which “Roman Catholicism” just happens to be the name of the stage on which your purely individual spiritual drama is taking place. The Commonweal-reading wing of liberal Catholicism would certainly reject the latter idea, but the kind of “post-Catholic Catholicism” Linker describes is clearly more of a force in our culture today than it was during the early days of the American Church’s post-Vatican II civil war (it’s hard to understand the controversy over American nuns, for instance, without recognizing its impact), and the Trishes of the culture havea strong wind at their back in a way that would-be reformers of the old, 1960s-era school of liberal Catholicism arguably do not”.

He goes on to argue that “some of those would-be reformers would argue that Trish-ism (which as Linker describes it is basically a Catholic version of Sheila-ism, Robert Bellah’s Reagan-era gloss on individualistic spirituality) is what happens, more or less inevitably, when the church’s leaders hollow out their credibility by trying to enforce the unenforceable, and that a church that had evolved with the culture forty years ago would have actually preserved a sense that doctrine actually matters. This argument is problematic, though, because the (mostly Protestant) churches that did evolve along those lines often seem to be churches where Trish-ism is fully enthroned and all talk of traditional doctrine is a dead letter. Hence the appeal of the conservative counter-argument that actually Trish-ism is the fruit of the Catholic hierarchy’sinattention to doctrinal matters, its eagerness to soft-pedal the tough stuff, its attempt to keep everyone on board in an age of division and dissent: “It’s not that dissenting Catholics don’t care what the Church teaches,” Matthew Schmitz writes in a response to Linker’s piece, “it’s that the Church has taught them not to care. To that lesson, they’ve paid close attention.” But I wonder if this argument doesn’t oversimplify things as well. To explain what I mean, let me quote an extract from Daniel Gordis’s recent argument about how Orthodox Judaism gained ground at Conservative Judaism’s expense”.

He ends the post noting that “Now for a variety of reasons this may be an easier wire for Judaism to walk than Catholicism. But Gordis is raising an issue that any tradition-minded religious body needs to think through: Namely, how to make its hardest rules seem like aspirations rather than just judgments, and how to deal with the many fine personal gradations that can exist between orthodoxy and apostasy, fidelity and dissent. And I suspect there are many Catholics who would be classified as “liberal” who want something like what he’s describing in Modern Orthodoxy from their church. That is, they want room to dissent from a teaching or fail to live up to it in practice, but they don’t necessarily want the church to change that teaching so that the dissonance or tension they feel simply goes away. Hence their positive reaction to Francis’s rhetorical shift and their lack of urgency about actual doctrinal change. They aren’t necessarily all Trishes who have decided that they don’t care about what the Catechism says. Some of them, at least, might be more like the Orthodox Jews who parked their cars around the corner without demanding that the rabbi be okay with it, and whose children turned out to be more observant, rather than less. To conclude, and clarify: I’m not trying to minimize the problem of Trish-ism (trust me!), I will be as depressed as Linker if liberal Catholicism just turns out to have faded into moralistic therapeutic deism, and I’m strongly sympathetic to Schmitz’s point about the dangers of officially upholding orthodoxy while making it seem optional and/or unimportant with winks and nods. But I think there are some complexities here. It could be that liberal Catholics who heart Francis despite his lack of doctrinal movement are testifying to a hopelessly emptied-out understanding of their faith. But some kind of cognitive dissonance in these areas, some gap between what individual Catholics believe and what they want the papacy to teach, might not be the worst sign for the future of church”.

A return to agonism?

13/01/2014

An article in Foreign Affairs discusses the need for the social democratic left in politics to return to its roots, thus saving itself, and society with it.

It opens, When the global financial crisis hit in 2008, social democrats in Europe believed that their moment had finally arrived. After a decade in which European politics had drifted toward the market-friendly policies of the right, the crisis represented an opportunity for the political center left’s champions of more effective government regulation and greater social justice to reassert themselves. After all, it was thanks to center-right policies that deregulated financial markets had devolved into a kind of black hole, detached from the wider global economy but exerting a powerful force on all kinds of economic activity. When the financial services industry finally collapsed, the effects went far beyond Wall Street and the U.S. economy, plunging financial markets and economies everywhere into a deep crisis that has still not been resolved”.

The author writes crucially, “social democrats in Europe sensed a possible silver lining. For decades, they had argued for stiffer regulations to steady inherently unstable financial markets, to no avail. The crisis, it seemed, proved them right. Moreover, in the wake of a massive global recession, millions of people had to turn for support to the welfare systems that social democrats had built and sustained: yet another vindication, they believed. And yet five years later, Europe’s social democratic moment has yet to materialise. Social democrats have won victories at the national level in a number of countries, including Denmark, France, and Slovakia. But these relatively modest gains have been overshadowed by a sense that Europe has fallen into a period of political volatility, a permanent emergency of sorts brought on by the flaws revealed in the euro system and the European Union as the global financial crisis morphed into a eurozone crisis. Even though social democrats have not yet been able to fully capitalise on the situation, they still have a chance to do so, but only if they come to see how the mistakes they made during the previous two decades reduced their political capital and left them ill prepared to take advantage of a political environment that should play to their strengths”.

The writer argues for social democrats to return to thier old ways of challenging unfettered immoral capitalism and at the same time protect the welfare state that so many now rely on during these times. The piece adds that “From the late 1970s until the mid-1990s, they had suffered significant declines in electoral support in key countries, such as Germany and the United Kingdom. These declines prompted soul-searching on the European left, which took different forms in different countries. One common conclusion, however, was that as neoliberalism spread and economies around the world changed dramatically, traditional social democratic politics seemed outdated to many voters. Across the Atlantic, in the United States, the Democratic Party, led by President Bill Clinton, responded by shifting to the right, plotting a “third way” that accommodated market-friendly neoliberal policies”.

Of course what actually happened was that the so called “New Democrats” in fact adopted, almost wholesale, the GOP platform of mass privitisation and welfare cuts. Naturally other parties joined Clinton in ditching their values and jumping off the cliff. Part of the result of this was a decline in voter turnout. People saw little ideological difference between the parties and saw fewer and fewer reasons to vote.

As the writer says, “The key intellectual shift shared by the many different third-way currents that emerged in the 1990s was their application of pro-market policies to almost every area of governing. Third-way proponents saw social security systems not primarily as insurance against major life risks, such as unemployment, illness, and infirmity, but rather as a means of economic reintegration. Their goal was to transform the social safety net into a trampoline, focused less on addressing the immediate needs of the poor and disadvantaged and more on helping such people rapidly rejoin the economy. In practice, these reforms increased the risk that the unemployed would face permanent downward mobility, with the government subsidizing their reentry into the very bottom end of the labor market”.

The writer argues, correctly that “Still, in electoral terms, the third way worked well, at least for a time. By the end of the 1990s, social democrats led most of the EU states”, the piece goes on to say that “to many voters, the extent to which social democrats had changed their stripes represented an opportunistic betrayal of their core beliefs that left them almost indistinguishable from their political competitors. Such accusations took their toll, but the weakness of the third way became undeniable only after the financial crisis. Suddenly, traditional social democratic warnings about the inherent instability of markets — the kind of talk that third-way leaders such as Blair had left behind — seemed prescient, not old-fashioned. But because social democratic leaders had spent the previous two decades adopting, rather than adapting, neglecting to develop a true alternative to neoliberalism’s insistence on unfettered markets, the crisis found them intellectually unprepared”.

The writer continues, “Today, while they should be riding high, the social democrats appear overwhelmed by the rapid change that is taking place around them — just like almost every other group in the European political ecosystem”. She goes on to add later that “To accomplish those goals in the midst of a continent-wide political crisis, social democrats must abandon their recent obsession with short-term electoral tactics and return to their political and ideological roots, offering voters in their countries a vision of a “good society.” The core social democratic values of freedom, equality, and social justice should be the guiding ideals for a good society that recalibrates the relationship among citizens, the economy, and the state. A dynamic and sustainable economy must be not an end in itself but a means to improve the lives of all citizens, not just a few at the top. The allocation of income and wealth in many places today has little to do with people’s performance; it is mostly the result of power and influence. A good society would reinstate the performance principle”.

She gives the example of Apple. In an old fashioned and paternalistic way, though these are not inherently bad concepts she writes, “It should have come as no surprise that retrofitting the techniques of retail marketing to electoral strategy would not make for coherent politics — it rarely makes for good business, either. Steve Jobs, the visionary founder of Apple, understood this well. When asked by his biographer, Walter Isaacson, why he refused to rely on traditional market research, Jobs replied, “Some people say, ‘Give the customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do. . . . People don’t know what they want until you show it to them.” Europe’s social democrats should heed Jobs’ advice and craft a new and convincing political agenda that reflects their core values, rather than trying to reverse-engineer a platform that just reflects what opinion research suggests the public wants to hear. An electoral strategy based on articulating core social democratic values would also offer a tactical advantage. As European societies become more culturally and socially fragmented, trying to target particular groups of voters with tailored messages means chasing ever-smaller segments of society with ever-narrower messages. This divide-and-conquer approach served third-way politicians well during the years of stability and prosperity. But during a crisis or a prolonged period of instability, it has prevented social democratic parties from putting forward broad-based platforms that could unite otherwise diverse social groups around a single economic and political vision”.

She ends the article, “if Europe’s social democrats are to have a real shot at winning office and governing successfully, they need to think big. Rhetorical adjustments will not suffice, nor will simply rebranding third-way ideas for the current situation. To finally seize the moment, social democrats need to return to their roots and offer Europeans a vision of a good society, one that can redeem the promise of social justice and a prosperous economy”.

Trust in America

26/12/2013

An article from the Economist examines the political polarisation in the United States. It notes “The network maps shown here look at the degree to which senators vote the same way. Each node is a senator. Links represent instances when senators have voted similarly on substantive legislation on at least 100 occasions during the same congressional session. Their placement is determined algorithmically, based on their co-operation with other legislators—which has the effect of pushing more bipartisan ones to the centre.

In a related article from the same issue examines the consequences that these deepening political divergence can have, and is having on American society.

 

“Grim findings have been coming thick and fast. Most Americans no longer see President Barack Obama as honest. Half think that he “knowingly lied” to pass his Obamacare health law. Fewer than one in five trust the government in Washington to do what is right all or most of the time. Confidence in Congress has fallen to record lows: in America, as in Italy and Greece, just one in ten voters expresses trust or confidence in the national parliament. Frankly straining credulity, a mammoth, 107-country poll by Transparency International, a corruption monitor, this summer found Americans more likely than Italians to say that they feel that the police, business and the media are all ‘corrupt or extremely corrupt'”.

Worryingly the piece reports that “Americans are also turning on one another. Since 1972 the Chicago-based General Social Survey (GSS) has been asking whether most people can be trusted, or whether ‘you can’t be too careful’ in daily life. Four decades ago Americans were evenly split. Now almost two-thirds say others cannot be trusted, a record high. Recently the Associated Press sought to add context to the GSS data, asking Americans if they placed much trust in folk they met away from home, or in the workers who swiped their payment cards when out shopping. Most said no. The press is full of headlines about an American crisis of trust. That is too hasty. Lexington spent years in Asia and Europe reporting from countries cursed by official corruption and low trust among strangers. America is not that sort of society”.

While this latter point is true the danger is that it will become a self fulfilling prophecy. America’s obsession with the free market on the one hand has made it competitive and wealthy, but the negative effects of this are now being felt. Unless a more communitarian approach is taken social decay will continue. The consequences of this over time would be a less competitive America but the benefits would outweigh any negatives in the long term.

He goes on to cite China, “In genuinely low-trust societies, suspicion blights lives and hobbles economies. In China, even successful urbanites distrust business and government, worrying constantly about the food they buy and the air they breathe. Yet those same successful Chinese have little confidence in the poor. Chinese friends used to urge Lexington never to play Good Samaritan at an accident scene, insisting that anyone rich who stopped to help would be blamed for the victim’s injuries and pursued for compensation”.

He goes on to argue correctly, “It is true that America faces grave problems. Congress has had an unproductive year: shutting down the federal government was a notable low point. The Internal Revenue Service (IRS) confessed to subjecting Tea Party and other political groups to special scrutiny, enraging conservatives. But to put such antics in perspective, this year Italy’s richest media tycoon and its ex-prime minister, Silvio Berlusconi, was convicted of tax fraud, of paying an underage prostitute and abuse of power. In genuinely low-trust countries, tax evasion comes naturally: when those at the top cheat, only dupes follow the rules. But America shows few signs of surging tax evasion. The most recent IRS “tax gap” estimates found no significant decline in the proportion of taxes paid voluntarily and on time”.

Again this point is correct but the reason that tax evasion rates are so low is that those at the highest income pay almost no tax at all with Mitt Romney confessing he paid 7% in income tax.

He ends the piece, “None of this justifies complacency. Americans are dangerously angry. But when they voice Italian levels of distrust for authorities, or sweepingly accuse fellow-citizens of being crooks, they are not describing reality. Here is a theory: Americans are instead revealing how deeply they are divided. Dig into headlines about “half of all Americans” thinking this or that, and large partisan or demographic divides lurk. Take that poll finding that half of voters think Mr Obama lied to pass his health plan. Look more closely, and eight in ten Republicans think he fibbed, but fewer than one in four Democrats. As for headline GSS numbers about overall trust between Americans, they conceal a big race gap: for decades around 80% of black Americans have consistently said that most people cannot be trusted. The bulk of the recent decline involves whites becoming less trusting, says Tom Smith, the survey’s director. Explaining that decline is a complex business, but over the same period society has become more impersonal and more economically unequal. Robert Putnam of Harvard University, a pioneer in the study of “social capital”, argues that Americans’ trust in one another has been declining steadily since the “golden” aftermath of the second world war, when civic activity and a sense of community among neighbours were at a peak. Trust in institutions has risen and fallen over that same post-war period in line with external events, plunging after the Watergate scandal, for instance, and during recessions. Yet something new seems to be happening. Anti-government cynicism is feeding on gulfs in society”.

He concludes the article, “Consider the crisis around Obamacare. Forget fussing about its useless website: websites can be fixed. The president’s headache is that voters see his plan as welfare for the poor rather than a better way of delivering medical care. That is exposing ugly divisions. Most starkly, a majority of whites think the law will make life worse for them, a National Journalpoll found, while most non-whites believe it will help people like them. That in turn tallies with a big change over the previous 15 years: a collapse in support among conservatives for government safety nets. This is America’s real problem with trust. The country faces a crisis of mutual resentment, masquerading as a general collapse in national morale. Sharply-delineated voter blocs are alarmingly willing to believe that rival groups are up to no good or taking more than their fair share. Polls describing America as a hell-hole of corruption are not to be taken literally. They are a warning. America is not a low-trust society. But it risks becoming one”.

Francis vs Rush

08/12/2013

Christian Caryl who has written somewhat correctly about Pope Francis recently, has a new article about what blowhard Rush Limbaugh has said about Francis who has in his Post-Synodal Apostolic Exhortation warned about how many people view capitalism.

Caryl writes that “In his text he assails the problem of inequality, asks that we pay greater attention to the needs of the poor, and attacks the idea that the urge to accumulate wealth is an end unto itself. Sure, the bible has a lot of harsh things to say about the wanton rich”.

Caryl add “Nowhere in the document does he mention specific policies to counter these problems. He doesn’t call for increased taxation of the rich. (The word “tax” occurs only once in the document, in a passage that criticises tax evasion and corruption.) He doesn’t sing the praises of collectivism. He doesn’t attack the principle of private property, nor does he advocate public ownership of the means of production. It’s worth noting that this pope has a long track record of opposing liberation theologists in his homeland of Argentina. Still, I guess it’s theoretically possible that the pope really is a closet Maoist”.

Caryl is correct, Francis does not advocate for collectivism or attacking property. However what Caryl misses is that the reason he does not “mention specific policies” is that because this is primarly a religious document and not an economic article. The Church is not a political organisation but it does seek the common good and reserves the right to have its voice heard on matters where there is a spiritual dimension – the worship of money being the obvious example.

He makes the correct point when he writes “The conservative commentator Rush Limbaugh, America’s premier political entertainer, was keen to pile on (though not quite so ingenious in his arguments). He was especially upset by this part of the pope’s critique: “The culture of prosperity deadens us. We are thrilled if the market offers us something new to purchase. In the meantime, all those lives stunted for lack of opportunity seem a mere spectacle. They fail to move us.” This sounds pretty keenly observed to me. But Limbaugh just couldn’t bear it: “That’s going way beyond matters that are ethical,” he spluttered. “This is almost a statement about who should control financial markets. He says that the global economy needs government control.” Well, no. Actually, Francis doesn’t say anything of the kind. Instead he’s exhorting us (a pronoun that expressly includes politicians and world leaders) to look closely at our own behavior and its consequences. That’s precisely why his text is an “exhortation,” a rumination on issues of justice and charity, not a white paper from some Washington think tank”.

Finally Caryl rightly laughs at Limbaugh, “For Limbaugh, though, it’s a clear case: Pope Francis is a ‘Marxist.’ Just for good measure, he draws a stark contrast between Francis and Pope John Paul II, who stared down the Soviet Union and made a signal contribution to the collapse of communism. John Paul II, in this reading, was the ultimate Cold Warrior, a man at the opposite end of the spectrum from this sentimental, pinko Francis. Except that he wasn’t. Here’s a sample from John Paul II’s own writings in 1991. ‘The Marxist solution has failed,’ he noted. And yet, he continued: ‘Vast multitudes are still living in conditions of great material and moral poverty. The collapse of the Communist system in so many countries certainly removes an obstacle to facing these problems in an appropriate and realistic way, but it is not enough to bring about their solution. Indeed, there is a risk that a radical capitalistic ideology could spread which refuses even to consider these problems'”

He concludes, “Francis, in short, isn’t saying that capitalism is inherently bad. What he’s saying is that we shouldn’t fetishize it. We shouldn’t treat it as if it’s beyond reproach, something that we can’t even dare to change”.

“We have created new idols”

06/12/2013
“One cause of this situation is found in our relationship with money, since we calmly accept its dominion over ourselves and our societies. The current financial crisis can make us overlook the fact that it originated in a profound human crisis: the denial of the primacy of the human person! We have created new idols. The worship of the ancient golden calf (cf.Ex 32:1-35) has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose. The worldwide crisis affecting finance and the economy lays bare their imbalances and, above all, their lack of real concern for human beings”

“A crude and naive trust”

01/12/2013

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system. Meanwhile, the excluded are still waiting”.

“A harsh critique”

27/11/2013

Pope Francis launched a harsh critique against “trickle-down” economics and an unrestricted free market Tuesday, as he lamented the growing issue of income inequality. In a new writing, the leader of the Catholic Church identified current economic conditions as a major challenge facing the globe. In particular, he argued that the “idolatry of money” in society has created a class of people who are basically disposable”.

Domestic understretch

20/10/2013

James Traub has written a piece on the consequences of the shutdown for America and the world. Traub begins his article arguing that “Americans will find themselves witnessing the same melodrama in three months unless Congress agrees on a long-term fiscal plan, which seems, to put it gently, damn unlikely. For another, Americans have been stumbling in a fog of their own devising for the last generation or so. The end is not nigh; but the decline is”.

He goes on to say the far from overstretch as in Paul Kennedy’s book he writes that “That feels like the wrong diagnosis. First of all, unrestrained defense spending in the aftermath of 9/11 has not come close to bankrupting the United States, though it has certainly squandered precious resources. Second, Americans have contracted a severe case of indigestion from President George W. Bush’s vain attempt to swallow significant portions of the Middle East; they are now spitting out the remnants. Empire is an unnatural condition for the United States, and withdrawal to its continental fortress is an almost inevitable response to fears of overstretch. If anything, it is the new national suspicion of engagement, the mood of sullen disenchantment, that marks the country’s decline. Americans don’t want to shoulder the burdens of global leadership; they want the world, along with its demands, to go away”.

He is certainly correct in saying that America’s military buildup did not bankrupt America but he is incorrect in pointing the figure at President Bush in the “attempt to swallow significant portions of the Middle East”, whatever that means. President Clinton was happy to use American power in Somalia, Haiti, and Serbia but paid little heed to the embassy bombings, the attack on the USS Cole or a host of other terrorist attacks that should have warned him of something to come. Instead he did nothing. If President Bush went too far in an attempt to overcorrect for Clinton’s mistakes than so be it but to bemoan the fact when his predcessor did so little seems, at best, unfair.

Traub is right to say that empire in unnatural for America but he overestimates the power of isolationism in the body politic, and more importantly beyond it, with current with blowhards like Cruz and Paul sucking up the most media attention. However, like most things when the economy improves the desire to pull up the rope ladder will, thankfully become considerably less.

He adds that “We need a word more like “understretch” to describe the national condition. The problem does not lie with too-muchness abroad but with too-littleness at home. And the source of the problem is not an overambitious state but an implacable hostility to the operations of the state. Kennedy also writes that while America’s laissez-faire culture and economy make it better able to adjust to rapid change than are more dirigiste societies, doing so ‘depends upon the existence of a national leadership which can understand the larger processes at work in the world today.’ The deliberations of Congress — not just in recent days but in recent years — vividly show the danger of wrongheaded leadership”.

This is undoutbedly true. He goes on to make the valid point that “The near default, the shutdown of the government, the sequestration of budget funds — these are just the latest symptoms of a political, but also psychological, disease. The leadership of the Republican Party– and not just the Tea Party faction — believes that the federal government is bad. It has believed that at least since Newt Gingrich overthrew the party’s moderate leadership in 1994. In 2012, Mitt Romney, a Republican centrist, ran for president on a platform that would have reduced federal spending to 20 percent of GDP, 2 percentage points lower than it was during the time of small-government apostle Ronald Reagan — even though Medicare costs were a small fraction then of what they are today. (Matt Miller of the Washington Post has long been an eloquent voice on this madness, as for example here.) To accommodate deep tax cuts, Romney would have eliminated much of the federal government beyond the Pentagon. That is now the orthodoxy of one of America’s two political parties. Meanwhile, the United States is falling behind in crucial areas where it led not long ago. The national store of human capital is diminishing as average rates of literacy and numerical understanding plummet in comparison with rates in other countries, as a recent OECD report demonstrated. A smaller percentage of Americans now both attend and graduate from college than in many Western countries. Crumbling infrastructure increases transaction costs; just compare the trip to JFK airport to the commute to almost any other global airport. The United States still leads the world in spending on research and development, but China has closed much of a formerly immense gap, and many countries now spend more as a percentage of GDP”.

Traub does make the valid point that “The United States is losing its position of global leadership because it is refusing to make investments that its competitors are making. In this regard, congressional Republicans may have lost the battle, but they’ve won the war. President Barack Obama agreed to accept the massive tax cuts his predecessor instituted in order to conclude a budget deal in 2011; since then, he has played on the Republican side of the field. Obama has never found, and perhaps will never find, the language needed to convince Americans that they cannot offer decent prospects to their children without a drastic change in priorities”.

He concludes the piece “Historian Edward Gibbon argued that Rome ultimately fell for moral reasons — because an ethos of patriotism and civic virtue gave way to selfishness and apathy (and lost out to the otherworldly focus of Christianity). Americans from the time of George Washington have worried that citizens would sink into a Roman torpor. That hasn’t quite happened either; Americans remain wedded to their republican virtues. Yet they don’t believe in the United States as an ongoing national project as they once did. Perhaps extreme inequality has loosened the strong stays of shared purpose so that we are predisposed to believe that virtue resides only in the individual, not in the community or collective. Thus, we redistribute resources to the individual, which of course only reinforces inequality. We respond to leaders who address us as separate, indissoluble atoms. Gibbon, who distrusted democracy, would probably say that Americans have become too individualistic”.

If, and hopefully when, America leaves this phase in its history and becomes a political class that can work together then it can still accomplish much more than any of its supposed competitors or China.

The majority out of wedlock

15/07/2013

In a somewhat unsurprising news article published recently, it was revealed that in the UK, the majority of children will be born out of wedlock within three years due to the falling marriage rates.

The piece notes that “The proportion of children born to unmarried mothers hit a record 47.5 per cent last year, according to the Office for National Statistics. The figure has risen from 25 per cent in 1988 and just 11 per cent in 1979. If the trend continues at the current rate, the majority of children will be born to parents who are not married by 2016. Conservative MPs and experts warned that the stark decline of marriage is likely to lead to more family breakdowns and damage children’s prospects. Tim Loughton, the former Children’s minister, called on the government to introduce tax breaks for married couples to help stop the decline. He said: ‘If people are prepared to make a public declaration to each other in front of their friends and family they are more likely to stay together. Without marriage people drift in and out of relationships very easily'”.

The article goes on to mention that “David Cameron has pledged to introduce legislation to give couples tax breaks worth £150 by the end of the year. The Prime Minister has been forced to put a timetable on government plans to recognise marriage in the tax system amid growing Conservative unrest over the failure to act. Last year a total of 346,595 babies were born outside marriage and civil partnerships in England and Wales, equivalent to 47.5 per cent. In 2002 the proportion was 40.6 per cent, and if the trend continues at the same rate more than half of children will be born out of wedlock by 2016. According to the 2011 Census, the number of people who are married in England and Wales has fallen from just over half of the population a decade ago to 45 per cent. The figures represented the first time since the Census was founded in 1801 that married couples have been in a minority. More than 11 million people in England and Wales are single, reflecting the growing number who have chosen not to marry, while more than 5 million unmarried people live with their partners”.

The piece adds later that “The official figures show that 729,674 children were born in 2012 and mothers now have an average of two children each, the highest fertility rate since the 1970s. The rise in the birth rates has been driven by immigration and women chosing to have children later in life. The number of women aged over 40 having children reached a record 29,994, up from just 6,519 in 2002. The average age of mothers has risen to 29.8 years in 2012, compared to 27 in 1982. The ONS said: ‘These trends reflect the increasing numbers of women delaying childbearing to later ages'”.

Much of the problem is down to a lack of marriage which hinges on the ever increasingly individualism in societies, and added to this the decline in belief in God as exemplified by attendance at an official church domination. However, the other problem is that relativistic belief that all forms of “partnership” are equally valid. This is not the case and indeed the concern is that marriage will become a thing of the past for the vast majority with only a few couples choosing to commit to what is by far the most stable form of union in society and therefore the best for children.

A complicated women

12/04/2013

A more nuanced portrait of Marget Thatcher has been published in light of her recent death. He opens the piece thoughtfully,”To her fans she remains the very embodiment of self-assured conservatism, the woman who unapologetically celebrated the values of patriotism and free enterprise. To her foes she remains Thatcher the Milk Snatcher, the sneering prima donna who slashed away at the British welfare state, spared little time for the poor, and opened the way to an era of excess and greed. Both of these images are caricatures”.

He goes on to discuss her view on the role of government writing “One of Thatcher’s signature achievements was her privatization program, which took some of the key industries that had been nationalized by the Labour Party in 1945 and restored them to private ownership. British Gas, the telephone company, and industrial firms were removed from state control, their shares sold off to investors. The idea was to get government out of the direct day-to-day management of companies that were better off exposed to the bracing discipline of the markets”. However he goes on to temper this when he writes “yet she pointedly shied away from any radical restructuring of the core institutions of the “cradle-to-grave” welfare state that the Labourites had established three decades before her. She was especially reluctant to take on the National Health Service, the all-encompassing health-care system that remains a mainstay of British society today. Though she attempted a few piecemeal reforms of the NHS, she notably refused to expose it fully to market discipline, all too aware that the British public would never stand for that”.

On the point about her passion for cutting taxes he writes “Britain became notorious in the 1970s for its astonishingly high rates of tax on top earners, prompting many a rock star and CEO to seek more hospitable financial climes. One of the Thatcher’s first moves after her election as British prime minister in 1979 was to slash income taxes. (In 1979 the top rate was an astonishing 83 percent, which her government cut to 60 percent.) By reducing the tax burden on earnings, she aimed to unleash long-suppressed entrepreneurial impulses”. All of this is well and good but thankfully he goes on to mention that “In stark contrast to today’s Republicans in the United States, though, Thatcher acknowledged that it was impossible to balance the government’s books without raising revenues elsewhere — which she did, in her first term, by boosting taxes on consumption. Though government finances during her early years received a huge boost from the flow of North Sea oil”

On the issue of social conservatism he notes that Thatcher “was the product of a strict Methodist upbringing that emphasized individual responsibility and respect for traditional values, her record as a Conservative Party parliamentarian shows that she approved of legal abortion and also voted for a landmark law in the 1960s that decriminalized homosexuality. (To be sure, she later angered gay rights advocates with her support for a 1988 measure that prohibited schools from teaching ‘the acceptability of homosexuality as a pretended family relationship.’) She might have found some common ground with today’s U.S. Republicans over capital punishment, of which she strongly approved. Yet it’s hard to imagine that her other views on social issues would have proved amenable to the American conservatives who today hold her in such high regard”.

He goes on in a similar vein to inject some nuance into her relationship with President Reagan, “the public image of a serenely harmonious “power couple” obscures more than it reveals. Both were fervent defenders of their countries’ respective national interests, which sometimes clashed. As Thatcher biographer John Campbell notes, Thatcher was profoundly disappointed when the Reagan administration failed to take her side after Argentina invaded the Falkland Islands: The White House pushed her to seek mediation rather than a military solution to the conflict”.

“Less well grasped”

12/04/2013

An article in Foreign Affairs discusses the legacy of Thatcher. It begins arguing that “The outlines of Thatcherism on the socio-economic front are well known: rolling back the frontiers of the state, emphasizing individual responsibility, and championing entrepreneurial creativity. Today, the legacy of Thatcherism is ambivalent. On the one hand, Thatcher pulled the country out of the economic tailspin of the 1970s; on the other hand, her war on regulation facilitated the banking extravaganzas that eventually resulted in the ongoing financial crisis. What is less well grasped, however, is Thatcher’s legacy in foreign policy”.

He writes that the “sobriquet “Iron Lady” was bestowed on Thatcher not by British miners or Thatcher’s many other domestic opponents, but by the Soviet press in the mid-1980s. It reflected her reputation for toughness on the military and diplomatic fronts, particularly in the joint effort with U.S. President Ronald Reagan to strengthen the West’s nuclear defenses during the Cold War”.

Sims goes on to argue that “Three interlocking — but not always mutually reinforcing — impulses drove Thatcher’s foreign policy. First, the Iron Lady hated dictators and bullies of any kind. She refused to be intimidated by IRA violence, and she despised the culture of fear that the Irish republican movement fostered to keep its community in line. Her toughness on the Falklands reflected a determination not to hand island’s inhabitants over to the military regime in Buenos Aires, whose abysmal human rights record was well known. And her opposition to the Soviet bloc was informed by a deep sympathy for the dissident movements in such places as Czechoslovakia and Poland. Later, Thatcher was one of the few members of the British political establishment to speak out strongly against Serb ethnic cleansing in Bosnia.”

However he refusal to “be intimidated” by the IRA while certainly welcome also belied an ignorance and insensitivity when dealing the the government in Dublin. She gave the impression that Northern Ireland was simply her problem when in fact, if she had worked with the government in Dublin sooner and more willingly than much bloodshed could have possibly been avoided.  On more than one occasion she seemed no to understand the complexities of the situation in Ireland and in a perverse way seemed proud of this fact. Her attempts to sideline Dublin completely did little for peace and only made grievances worse. Similarly, she did nothing to halt the rise in Unionist terrorists and preachers that fomented anger among the Unionist community.

The article then goes on, continuing the uncritical style to note “Underpinning this hatred of dictators was the second impulse that drove Thatcher’s foreign policy: her passionate commitment to democracy. She was outraged that the National Union of Mineworkers refused to allow its members to vote on whether to strike, a decision that was ultimately made for the miners by an authoritarian, Soviet-leaning leadership. Her unyielding line against IRA terror was rooted in the knowledge that the majority of those in Northern Ireland wanted to remain part of the United Kingdom. Thatcher’s close relationship with Reagan was based, above all, on their shared belief in economic liberalization at home and democracy promotion abroad, at least in the Communist world”.

The article mentions her “hatred of dictators” yet this is too simplistic. She believed in democracy but at the same time did little to end apartheid in South Africa and at the same time giving support to Pinochet in Chile despite his utter contempt for human rights. Even after vast quanitites of evidence were found to show Pinochet’s involvement in murder and corruption she steadfastly stood by him . Therefore to oversimplify her record is at best, distasteful.

He adds later on that “Where Thatcher ultimately came unstuck was in her third principle, which was a preoccupation with German power — and a related profound ambivalence about European integration. She was a strong supporter of the European common market, partly because of her belief in free trade and partly because she thought that a reinvigorated and economically robust Europe would help contain the Soviet Union. At the same time, however, Thatcher belonged to a generation that had gone through World War II and naturally feared German power and German unification. By the late 1980s, she began to view the growing influence of the European Commission in Brussels not only as an encroachment on the democratic rights of the British people, but also as a vehicle for the reassertion of German power on the continent. This divided her not only from the French, for whom Europe was a device to contain its historical enemy, but also from German Chancellor Helmut Kohl, whose genuine commitment to a united Europe she mistakenly saw as a fig leaf for the reassertion of German power. In 1989–90, Thatcher’s commitment to democracy and her fear of Germany were in direct contradiction. The fall of the Berlin Wall and the collapse of the Soviet bloc cleared the way for the German people to express their democratic desire for reunification. Thatcher now expressed concern that a united republic would ‘once again, dominate the whole of Europe.’ For a time, it seemed as if she would team up with Gorbachev and French President Francois Mitterand to prevent it. It was only with difficulty that the United States and her own advisers persuaded her to accept the inevitable. Nearly 25 years later, as Europe struggles with its sovereign debt crisis and the ever-widening gulf between Berlin and continent’s periphery, Thatcher’s concerns seem less far-fetched”.

It should be noted however that this is simply ascribing something to Thatcher that she did not know about and came into being long after she left office. Any “foresight” she had was in that sense, purely accidental. Not only that but she did after all sign the Single European Act so any hostility she had to Europe was measured by pragmatism rather than blind rage.  The article does little to balance her obvious good points with those acts that will not be judged kindly by history. It is more a  hagiography than a piece of serious historical scholarship.

CEO of the Church

09/03/2013

The Economist has taken an irreverent look at the upcoming conclave. The piece opens “as the cardinals gather in Rome to elect a new boss the church is in turmoil. The pope has no shortage of crisis-management tools at his disposal, including the doctrine of papal infallibility. But Benedict XVI spent his papacy either provoking unnecessary crises (such as welcoming back Bishop Richard Williamson, a Holocaust downplayer) or struggling with the sex scandals that are racking the church. This is partly because he was the wrong man for the job: a scholar where an administrator was required and an old man—78 when he was appointed, 85 today—where youthful vigour was needed. It is also because the problems tearing the church apart require sweeping structural reform of the sort that only a great leader can deliver. To be fair, Benedict has laid the foundations for just such a reform. His decision to retire establishes the revolutionary principle that being pope is a job, rather like being the boss of a company, that demands that you have all your wits about you”.

Yet the author ignores the fact the Benedict was elected to do more than just “administer”, although it could be argued that it was certainly a reason why he was elected, not appointed, in the first place. It ignores his fablous speeches and the great learning he brought to the papacy, his respect for the older liturgy and his challenge to modern individualistic society swept up in itself. He also ignores the point that Benedict had to speak his message through a media that was more or less relentlessly hostile, even if it ended up benefiting society as a whole.

The piece goes on to mention unfairly, that “Benedict has characteristically fumbled a good idea by insisting that he will continue to live in the Vatican and share his private secretary, Georg Gänswein, with his successor. But his decision is pregnant with possibilities. The next pope needs to be equally radical in reconsidering everything from the church’s core mission to its customer base”. The writer misunderstands the roles that Archbishop Ganswein has. Firstly his job as private secretary to Benedict, Roman pontiff emeritus has not changed but is quite minor and not at all significant due to Benedict’s obvious decision to stay away from commenting on the job of his successor. Secondly, that of prefect of the Pontifical Household is important but technical in that he organises the audiences of the pope and is not generally a close adviser, per se.

The writer the goes on to say “could learn from the private sector about how to manage the workforce he has”. Again the irrevence is grating and the comparison can be taken too far but there is some small amount of truth in what he writes. He adds, “you need to punish errant employees rather than protecting them or shuffling them about. The best companies are quick to ‘proactively outplace’ wrongdoers. Second, you need to treat your reputation as your most precious asset by drawing up clear rules on ethical behaviour, insisting staff adhere to them and conducting aggressive public-relations campaigns. Companies that have been caught lapsing, such as Tyco International, devote a lot of effort to telling their customers and employees what they are doing to fix their problems. Third, you have to keep looking ahead. Companies hold meetings of senior leaders to review their strategies every year, rather than every century or so. The church’s core competence lies in providing spiritual goods. Yet it devotes a lot of its energy to running an earthly operation. Some of this makes sense—schools and hospitals help fulfil Jesus’s mandate while promoting customer stickiness”.

His notion that the Church holds meetings “every century or so”, an obvious reference to the Vatican Council is again mistaken. The heads of the Roman Curia meet often, though admittedly not all together at once to provide “strategy” to the Church. This also ignores the regular synods that take palce every two to three years. He mentions “Big companies like IBM and Ford have got out of non-core businesses and contracted out as much as possible to specialist companies. The church should do likewise”. What he is suggesting is the Church basically abandon 2,000 years of Christianity in Europe and focus on “core businesses”, by which he means presumably Africa and Asia and Latin America despite all of what Benedict has done in the last eight years.

He goes on in a similar vein “the church remains Europe-focused. Its concession to globalisation has been to broaden the recruitment funnel for the papacy from Italy, which had an unbroken run for 456 years, to Mittel-europa. Seventy-five of the church’s 140 or so cardinals live in Rome”. While he is correct to say that the “recruitment funnel” has been widened there are not 140 cardinals, over 200 in fact and far fewer than 75 live in Rome. The fact that he gets this basic information so wrong does not bode well for his specific point.

He ends “The case for appointing a non-European pope is strong. But the church needs to go much further. Cisco created a second headquarters in Bangalore—Cisco East—that spearheads much of the company’s emerging-markets strategy. The least the church could do is to move the pope’s summer residence to Latin America. Many global companies establish centres of excellence across the world. The church should likewise move some of the Vatican’s departments, such as the ones that oversee missionaries or development, to developing countries. This would not only allow the church to plug into new ideas from Latin America and Africa; it would also help to discipline the introverted, back-biting, scandal-plagued and generally dysfunctional culture of the Curia”.

“An automatic cap on bonus payouts”

03/03/2013

On one of the few occasions when the EU actually does some good in the world instead of prolonging global economic chaos the UK has gone against history, morality and common sense and opposed the very reasonable proposal of the EU to cap bonuses of those in the banking industry.  After an series of scandals from LIBOR, to economic meltdown, incompetence, corruption and greed the UK is placing itself on the wrong side of history by clinging mindlessly to an outmoded neoliberalism that has spectacularly failed.

Reports note that “The agreement, announced by diplomats and officials after late-night talks on Wednesday between EU country representatives and the bloc’s parliament, mean bankers face an automatic cap on bonus payouts at the level of their salary, or two-times pay if a majority of shareholders vote in favour. But it represents a setback for the British government, which had long argued against such absolute limits. The City of London, the region’s financial capital with 144,000 banking staff and many more in related jobs, will be hit hardest. David Cameron said that he would “look carefully” at the proposed new regulations while defending the UK’s position as an international financial hub”.

The article goes on to mention “The change in the law will be introduced as part of a wider body of legislation demanding banks set aside roughly three times more capital and build up cash buffers to cover the risk of unpaid loans, for example. The backing of a majority of EU states is needed for the deal to be finalised. One member of the European parliament privately signalled that the deal could yet change, pointing to the ‘reservations’ of some EU countries”.

Yet those who oppose this sound measure come up with few real and valid arguments against it, with some claiming, or implying, that profit itself will be outlawed. Such “arguments” should be dismissed for the hyperbole that they are. Capping the pay of bankers and those in finance will be beneficial because it will mean more control over an industry that has run riot over the last 30 years and bring some balance back into the system that seems bent on rewarding those who fail spectacularly, eg Bob Diamond.

Another piece  has noted “Michael Fallon, the enterprise minister, said that the Treasury will demand at meetings in Brussels this week that the proposals are flexible enough to allow UK banks and foreign banks based in London to pay competitive rates. He said that although the new regulations on remuneration would only affect the highest paid, it could ultimately mean whole banking divisions being moved away from the UK as banks seek to operate in the more flexible markets of Asia and the US”. Yet, this British minister is also part of a government that has promised a re-balancing of the economy yet oddly enough it does not seem to include the industry that caused the crisis in the first place.

In related news reports mention that Switzerland, no bastion of communitarian thinking, “Under the proposal, shareholders will be given the right to hold a binding vote on executive remuneration. Companies would also no longer be able to pay so-called ‘golden hellos’ and ‘golden parachutes’, whereby senior managers receive a one-time cash lump sum, often running into millions of pounds, when joining or leaving a company. Polls show the majority of Swiss plan to vote “yes” in the referendum, despite businesses warning it will drive out companies from the country. The move will also be a blow to the many foreign firms that have moved their headquarters to Switzerland in recent years to benefit from better tax deals, including from Britain”.

The problems of capitalism

24/02/2013

The major article in the most recent Foreign Affairs entitled “Capitalism and Inequality” argues that “Recent political debate in the United States and other advanced capitalist democracies has been dominated by two issues: the rise of economic inequality and the scale of government intervention to address it. As the 2012 U.S. presidential election and the battles over the ‘fiscal cliff’ have demonstrated, the central focus of the left today is on increasing government taxing and spending, primarily to reverse the growing stratification of society, whereas the central focus of the right is on decreasing taxing and spending, primarily to ensure economic dynamism. Each side minimizes the concerns of the other, and each seems to believe that its desired policies are sufficient to ensure prosperity and social stability. Both are wrong”.

It goes to say “Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, for the problem is more deeply rooted and intractable than generally recognized. Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it”. While he is correct in the sense that inequality is rising, with both the bottom and middle suffering the most with the very wealthiest losing least, or in many cases, actually gaining. It would be wrong to say that the only reason for this was capitalism but the kind of capitalism that has been worshipped over the last 20 years, or maybe more, has greatly worsened the level of inequality in many societies. This change in capitalism has itself come about with as a result of the changing nature of the economy and the work that more people are doing. It is far more skilled, even at low levels than it was previously which in turn has meant greater emphasis on education. Yet while many more than ever before have gained university degrees the wealthiest have gone further still thereby enhancing their advantage. There is nothing wrong with parents doing this for their children but there must then be a counter balance to this in order to mitigate and lessen this effect.

He goes on to write “Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism — because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large”. He rightly praises capitalism for raising living standards and reducing poverty but goes on to warn “Capitalism’s intrinsic dynamism, however, produces insecurity along with benefits, and so its advance has always met resistance. Much of the political and institutional history of capitalist societies, in fact, has been the record of attempts to ease or cushion that insecurity, and it was only the creation of the modern welfare state in the middle of the twentieth century that finally enabled capitalism and democracy to coexist in relative harmony”.

He goes on to state rather controversially “If capitalism has opened up ever more opportunities for the development of human potential, however, not everyone has been able to take full advantage of those opportunities or progress far once they have done so. Formal or informal barriers to equality of opportunity, for example, have historically blocked various sectors of the population — such as women, minorities, and the poor — from benefiting fully from all capitalism offers. But over time, in the advanced capitalist world, those barriers have gradually been lowered or removed, so that now opportunity is more equally available than ever before. The inequality that exists today, therefore, derives less from the unequal availability of opportunity than it does from the unequal ability to exploit opportunity”.

He adds “All this progress, however, has been shadowed by capitalism’s perennial features of inequality and insecurity. In 1973, the sociologist Daniel Bell noted that in the advanced capitalist world, knowledge, science, and technology were driving a transformation to what he termed “postindustrial society.” Just as manufacturing had previously displaced agriculture as the major source of employment, he argued, so the service sector was now displacing manufacturing”.

He rightly goes on to mention the role of the family in society and its subesquent economic effects, “In the United States, among the most striking developments of recent decades has been the stratification of marriage patterns among the various classes and ethnic groups of society. When divorce laws were loosened in the 1960s, there was a rise in divorce rates among all classes. But by the 1980s, a new pattern had emerged: divorce declined among the more educated portions of the populace, while rates among the less-educated portions continued to rise. In addition, the more educated and more well-to-do were more likely to wed, while the less educated were less likely to do so. Given the family’s role as an incubator of human capital, such trends have had important spillover effects on inequality. Abundant research shows that children raised by two parents in an ongoing union are more likely to develop the self-discipline and self-confidence that make for success in life”.

He goes on to argue that education is not necessarily the answer “even though a higher percentage of Americans are attending college, they are not necessarily learning more. An increasing number are unqualified for college-level work, many leave without completing their degrees, and others receive degrees reflecting standards much lower than what a college degree has usually been understood to mean”, he adds “formal schooling itself plays a relatively minor role in creating or perpetuating achievement gaps”.

The answer to this he says is not greater redistribtuion which he argues “has two drawbacks, however. The first is that over time, the very forces that lead to greater inequality reassert themselves, requiring still more, or more aggressive, redistribution. The second is that at some point, redistribution produces substantial resentment and impedes the drivers of economic growth. Some degree of postmarket redistribution through taxation is both possible and necessary, but just how much is ideal will inevitably be contested”.

Whatever about his idea that greater redistribution will mean more redistrubition the second point that it “impedes the drivers of economic growth” is laughable.

The second solution which he also rejects is “using government policy to close the gaps between individuals and groups by offering preferential treatment to underperformers, may be worse than the disease. Whatever their purported benefits, mandated rewards to certain categories of citizens inevitably create a sense of injustice among the rest of the population. More grave is their cost in terms of economic efficiency”. Again this logic is questionable, to say the least.

The recommended cure for capitalism, he says, is more capitalism, “encouraging continued economic innovation that will benefit everybody, is more promising. The combination of the Internet and computational revolutions may prove comparable to the coming of electricity, which facilitated an almost unimaginable range of other activities that transformed society at large in unpredictable ways. Among other gains, the Internet has radically increased the velocity of knowledge, a key factor in capitalist economic growth since at least the eighteenth century. Add to that the prospects of other fields still in their infancy, such as biotechnology, bioinformatics, and nanotechnology, and the prospects for future economic growth and the ongoing improvement of human life look reasonably bright. Nevertheless, even continued innovation and revived economic growth will not eliminate or even significantly reduce socioeconomic inequality and insecurity, because individual, family, and group differences will still affect the development of human capital and professional accomplishment”.

220 years on

21/01/2013

Today marks the 220th anniversary of the murder of Louis XVI of France. The individualism and continued disruption of the common good live on.

Europe’s failed state

04/12/2012

As the EU/IMF/ECB “bailout” package progresses and on the eve on another austerity budget that is about to be announced, some have noted the strange characteristics of Ireland and the Irish.  Indeed it has been commented here before that while riots occur in Greece and mass protests in Spain as the endless euro crisis grinds on the Irish remain passive in spite of all that has happened over the last years.

An article in the Irish Times, mentions that the Irish “lack self-esteem despite a veneer of ‘garrulous sociability and self-deprecating twaddle’, according to the latest edition of the Lonely Planet which has just been published. The best-selling guide book says Irish people’s reputation for having an ‘easygoing, affable nature is justified’, but our reputation for friendliness is mostly a manifestation of our desire to chat – and our lack of self-esteem is our ‘dark secret’. The piece goes on to note “the Irish are ‘fatalistic and pessimistic to the core’, which is why they have accepted their economic fate more readily than the Greeks, who have rioted in the streets”.

A different article writes published earlier this year notes that the institutions of the Irish State have little or no significance or respect for many, though obviously not all, of the country’s citizens. It notes “You forget how tenuous and fragile a thing is the Irish State, how little it means to so many of its citizens. By the State, I don’t mean the nation, the flag, pride in being Irish – all that visceral emotion. I mean, rather, two rational things, one tangible, the other abstract. The State is a set of institutions – the Government, the Oireachtas, the Civil Service, public services, the law, the courts. It is also a broad but crucial sense of mutual dependence – the idea that there’s a collective self that goes beyond the narrow realms of family and locality”. The writer goes on to make the point that “To function at all, we have to make the working assumption that those institutions and that idea are part of what we are, that, however vehemently we disagree with each other about however many things, there is this common ground on which we stand. Even when we rail against the institutions (for loyalty is not the same thing as passive obedience), we do so because we identify with them – they are ours to criticise”. He then argues that “Everyone knows, of course, that there are subgroups – criminals, subversives – who have no loyalty to the State at all, who have contempt for its institutions and who don’t recognise the notion of the common good. But the working assumption is that these groups are small, marginal and outside the mainstream of society”.

Indeed, this notion of the common good seems to have been all but obliterated as a result of Ireland’s bizarre history and culture coupled with the ravages of rabid individualism which is prevalent all over Europe and throughout much of the Western world. He depressingly, continues ” every so often, there’s a moment when those assumptions crumble. The idea that the vast majority of people are loyal to the State is suddenly exposed for what it is: a useful fiction. What happens is that very large numbers of people who would never think of themselves as criminals or subversives reveal the truth that they don’t really have much time for key State institutions such as the law and the courts and that they simply don’t believe that there is an over-arching common good that means anything when you set it against more potent local loyalties”. He gives a concrete example, “This is what we’ve seen over the last fortnight in the Quinn affair. Very significant numbers of decent, respectable Irish people – not a majority but not a tiny minority either – are in literal contempt of the courts. They really don’t give a damn what the courts find – if those findings come into conflict with their own deeper loyalties”. He ends his piece “Nor do these decent, respectable people believe that there is a common good that operates at the level of the State and that could possibly outweigh an almost feudal loyalty to a local hero. The State, for them, is a vague, hazy and distant thing – too nebulous to command any real fidelity. The idea that encouraging the Quinns to siphon off €455 million of public assets might harm their fellow citizens has no meaning for them because, deep down, they don’t actually believe that there are such creatures as fellow citizens”, concluding, “The entire political culture of clientilism encourages people to think about the good of the locality, not of the State as a collective entity. Large parts of the Irish elite have demonstrated, with impunity, their own contempt for the law and the common good by evading and avoiding taxes. And of course the State itself is now a sad and tattered thing, stripped of the sovereignty that gives it life”.

An Irish historian weighs in and says that Ireland is not only economically but morally bankrupt also. He argues cogently “the cumulative affect of the various tribunal reports, most recently Mahon, may require political scientists and historians to question or qualify some of their earlier assumptions about the achievements of independence. Taking the long view, perhaps the very impulses that created stability and consensus in the earlier decades of independence also facilitated a fundamental neglect of civic morality and citizenship. This neglect ultimately allowed the sort of ‘systemic and endemic’ corruption exposed by the Mahon report, and as revealed previously by the Moriarty report, what amounted to a devaluing of ‘the quality of democracy itself'”. He goes on to note “There was not enough debate about policy, ideology or the consequences of a ruthless centralisation and authoritarianism. As Garvin observed, in 1922, whatever about devotion to national politics, ‘these unenthusiastic democrats were qualified in their attachment to democratic ideas and were not prepared to trust people with the power to run local affairs'”. Indeed, the nascent Irish state was too homogeneous, being almost entirely Catholic, white and poor. There were no differences in the political parties, a problem that persists to this day, and when a civil war did occur, it was over an irrelevant matter that divided the country then but has no significance in modern times. The writer goes on to mention “This point about trust is vital: if people are not trusted to run their own affairs, they devise other ways of getting things done and with that the likelihood of corruption increases. While there were valiant attempts from the 1920s to clean up malpractice in local government, in the long run local authorities were stripped of most of their powers and the few that they were left with, including the power to rezone land, were abused. In terms of national politics, Fianna Fáil and Fine Gael were born of Civil War divisions, rather than having competing visions about how to shape society. After the laying of the State’s foundations, the practice of politics became about the spoils of the system rather than engagement with ideas about the nature of citizenship. It was about management rather than vision. It was also about, in a society so homogeneously Catholic, abrogating responsibility to the Catholic church in too many crucial areas, including education, with a resultant narrow focus on what constituted immorality”. He adds importantly “Political culture was male-dominated and a closed system in which those who had ideas about doing things differently were dismissed as maverick, or, worse still, intellectuals”. This anti-intellectualism is rife in Irish culture, he mentions “Bertie Ahern – one of that glorious class of Fianna Fáil politicians first elected in 1977, that included Albert Reynolds and Pádraig Flynn – recorded in his memoirs Bertie Ahern: The Autobiography, he had nothing but contempt for intellectuals challenging the ward boss conception of politics”.

He ends his piece “Another problem was that Fianna Fáil was simply in power for far too long and the longer it held office and dispensed patronage the more perverted the definition of loyalty became, in order to justify cover-ups and lies. Lightweights were rewarded and promoted well beyond their capabilities, which resulted in a considerable devaluation of politics and the status of public office. Those who called for accountability within this culture experienced fear, menace and intimidation. As we edge towards the centenary of the events that comprised the revolution of the early 20th century, we face a stark conclusion: this is a State bereft of meaningful sovereignty due to its bankruptcy and a State whose governing culture has been exposed as rotten”.

Two pieces, published more recently, but on the same topic are also of interest and relevance. One of them reports on a conference that took place in Dublin recently. It mentions “The mistakes made in the Celtic Tiger era might be seen as Ireland’s adolescent stage but there is no guarantee that the country will grow up”. The article goes on to say “Counselling psychologist Elaine Martin said Irish society was trapped in a ‘narcissistic system’ as a result of its colonial past and would need to take active steps to move on to the next phase of development”, adding later that “The Irish tendency to devalue themselves as individuals and as a society and to idealise others were among the traits of a colonised people, she said. This is covert narcissism, which manifests itself in low self-esteem, as opposed to the grandiose narcissism more commonly associated with the term. Both types are characterised by self-obsession. The conference held a symposium on the Irish psyche in the aftermath of the Celtic Tiger in which it was claimed that we saw ourselves as a ‘deeply flawed people’. Ms Martin said Ireland needed to develop a sense of identity and self-confidence set apart from its colonial past. She said Queen Elizabeth II’s visit had helped the process, but there was a long way to go”. The piece goes on to note that “New Zealand had sought to move on from its colonial past by promoting traits such as excellence and integrity as values to develop as specific national traits. Ms Martin maintained the relationship between Ireland and its former colonisers was similar to that of a narcissistic family”. The piece ends “Dr Trisha McDonnell, a clinical psychologist, told the conference that Irish behaviour exhibited three postcolonial traits in particular: our deferential attitude to authority; our tendency to avoid the truth; and our communications strategy, which was manifested in a failure to speak plainly and assertively”.

Lastly, another opinion piece argues that no-one is held accountable in Ireland. It asks “What is it with ambitious public sector projects? It seems almost preordained that they end up with eye-watering cost overruns or getting long-fingered indefinitely after being bogged down in controversy. The National Children’s Hospital is the latest project to suffer from the dead hand of the public sector. It’s six years since reports by consultants McKinsey recommended a single, world-class paediatric centre which would amalgamate three children’s hospitals in the capital. Even though the location in the Mater was chosen shortly afterwards, political sniping and growing uncertainty over the location slowed progress. Two chairmen selected to oversee the process ended up resigning. As in excess of €30 million was poured into planning and design, it soon became clear the enormous scale of the development was a major issue. The plan rolled on regardless. It culminated in An Bord Pleanála refusing planning permission”.

He adds a further layer to this when he writes “After all the expensive consultants’ reports, expert groups and glossy plans, no one was accountable for the failure to deliver a project, while the taxpayer has been left to shoulder the burden of wasted expenditure. But perhaps it’s too simple to blame public servants. Is the Civil Service, for example, taking the flak for the failures of politicians or ministers, who have been all too keen to spend millions on half-baked schemes or ill-conceived vanity projects such as the so-called Bertie Bowl, e-voting or the Ppars computer project? For Bill Kingston, who lectures in business at Trinity College Dublin, the answer is simple: the lack of accountability in the public sector”. He goes on to add later in the article “There is also, Molloy says, a lack of expertise. The Civil Service and much of the public sector is based on “gifted generalists”. But it needs to be technically qualified and robust enough to place the public good ahead of the preferences of the incumbent government”.

While Ireland is not about to turn into Yemen or Pakistan, its utter failure to deal with these issues after more than 90 years of independence has effectively rendered it a failed state. Even worse nothing seems to have changed and so there will be another crisis in two decades or so that will set off the same pointless soul searching.

The path to success?

29/11/2012

An article about the future direction of the Republican Party argues that it must adhere to Catholic social teaching and the common good and move away from the sinful individualism that has plagued it, and so many other political parties.

It mentions that “The Catholic Church, a politically and ethnically sprawling institution, has no natural home on the American ideological spectrum. Neither major party combines moral conservatism with a passion for social justice. So Catholic leaders have often challenged Democrats to be more pro-life and Republicans to be more concerned about immigrants and the poor”.

The article goes on to mention “President Obama’s first term was a period of unexpected aggression against the rights of religious institutions. His Justice Department, in the Hosanna-Tabor case, argued against the existence of any “ministerial exception” to employment rules. Obama tried to mandate that Catholic schools, hospitals and charities offer insurance coverage for contraceptives and abortifacients. His revised policy still asserts a federal power to declare some religious institutions secular in purpose, reducing them to second-rate status under the First Amendment”.

It goes on to note “On top of this, Obama ran a stridently pro-abortion re-election campaign, seeking culture-war advantage on an issue he seldom mentioned four years ago”. However this was largely, though not completely, because of President Obama’s fear of losing the votes of women which he momentarily lost in the campaign. Obama used abortion to his advantage while at the same time as using it as a weapon to attack Romney and strengthen his advantage with women’s vote.

He makes the interest point, “Catholics have a historical advantage in understanding the imperative of inclusion in modern politics. They belong, after all, to an institution that has been multicultural since Peter first set foot in Rome. But white evangelicals are now getting their own education in coalition politics. They gave Mitt Romney a remarkable 79 percent of their vote—the same share that George W. Bush received in 2004 — while comprising a larger percentage of the electorate than they did 2004. But their energy and loyalty were rendered irrelevant—washed away—by GOP failures among other groups”.

He ends the piece “Outreach is not done in a single awkward lunge. It will involve more than endorsing comprehensive immigration legislation, though that is necessary. Hispanic voters have a series of concerns typical of a poorer but economically mobile community: working schools, college access, health care, a working safety net. Republicans will need to offer policy alternatives on these issues—defining an active, market-oriented role for government. Perhaps the greatest Republican need is to embrace and demonstrate some other sound Catholic teachings: a commitment to the common good and a particular concern for the poor and vulnerable. This might appeal to Hispanics — and others”.

Death of the dream

23/11/2012

Confirmation has finally come after many years suspecting it, the American Dream is dead, and has been for decades.

An article in Foreign Affairs argues this and elobrates on this theme. She argues that during the recent presidential campaign both GOP and Democrats wanted to promote opportunity. She notes that “In remarks in Chicago in August, Obama called for an ‘America where no matter who you are, no matter what you look like, no matter where you come from, no matter what your last name is, no matter who you love, you can make it here if you try.’ The same month, he urged the Supreme Court to uphold affirmative action in public universities, putting his weight behind what has been a mainstay of U.S. equal opportunity legislation since the 1960s. Days later, the Republican vice presidential nominee, Paul Ryan, echoed Obama’s sentiment, saying, ‘We promise equal opportunity, not equal outcomes.’ Romney, too, argued that whereas Obama ‘wants to turn America into a European-style entitlement society,'”

She mentions that “one of the United States’ major successes in the last half century has been its progress toward ensuring that its citizens get roughly the same basic chances in life, regardless of gender or race”. She adds “women are more likely to graduate from college than men” as well as some other related statistics. Yet these results are mainly from the Great Compression in the 1950s and 1960s. However, since the 1970s and 80s worldwide inequality has risen sharply since the rise of neoliberalism and effectively zero regulation. She adds that “As gender and race have become less significant barriers to advancement, family background, an obstacle considered more relevant in earlier eras, has reemerged. Today, people who were born worse off tend to have fewer opportunities in life”.

The article goes on to add that ” there is general consensus among social scientists on a few basic points. First, an American born into a family in the bottom fifth of incomes between the mid-1960s and the mid-1980s has roughly a 30 percent chance of reaching the middle fifth or higher in adulthood, whereas an American born into the top fifth has an 80 percent chance of ending up in the middle fifth or higher. (In a society with perfectly equal opportunity, every person would have the same chance — 20 percent — of landing on each of the five rungs of the income ladder and a 60 percent chance of landing on the middle rung or a higher one.) This discrepancy means that there is considerable inequality of opportunity among Americans from different family backgrounds”. She the goes on to mention, not suprisingly, that “The United States has less relative intergenerational mobility than eight of them; Australia, Canada, Denmark, Finland, Germany, Norway, Sweden, and the United Kingdom all do better. The United States is on par with France and Italy”.

She makes the point that education in America was greatly expanded in the 50s and 60s which raised living standards for people, yet she adds “The share of poorer children growing up with both biological parents has fallen sharply, whereas there has been less change among the wealthy. About 88 percent of children from high-income homes grow up with married parents. That is down from 96 percent four decades ago. Meanwhile, only 41 percent of poorer children grow up in homes with married parents, down from 77 percent four decades ago. That has hurt poorer children’s chances of success”.

Indeed this social and familial decay is becoming increasingly prevelant in more developed countries as the corrosive force of individualism eats into society. This both attacks the family as well as people seeking to start a family with the relentless drive for money which has now proven to be socially and morally corrosive.

She argues that “Low-income parents are not able to spend as much on goods and services aimed at enriching their children, such as music lessons, travel, and summer camp. Low-income parents also tend to read less to their children and provide less help with schoolwork” adding that this trend is seen again, “According to data compiled by Sean Reardon of Stanford University’s School of Education, the gap in average test scores between elementary- and secondary-school children from high-income families and those from low-income families has risen steadily in recent decades. Among children born in 1970, those from high-income homes scored, on average, about three-quarters of a standard deviation higher on math and reading tests than those from low-income homes. Among children born in 2000, the gap has grown to one and a quarter standard deviations. That is much larger than the gap between white and black children”.

The same is true for university, she argues noting “The share of young adults from high-income homes that got a four-year college degree rose from 36 percent in the first group to 54 percent in the second group. The share from low-income homes, however, stayed almost flat, rising only from five percent to nine percent. When it comes time to get a job, the story is no better”.

She writes that “A universal system of affordable, educational child care and preschool could help close the capability gap that opens up during the early years of life”, again she argues that education is key, “Among Americans whose family incomes at birth are in the bottom fifth but who get four-year college degrees, 53 percent end up in the middle fifth or higher. That is pretty close to the 60 percent chance they would have with perfectly equal opportunity. Washington needs to do better at helping people from less-advantaged homes afford college. The average in-state tuition at an American four-year public university exceeds $8,000. In Norway, Sweden, Denmark, and Finland, attending four-year public universities is free”.

One of the simplest ways to begin to reduce the inequality is to raise taxes and a country that is clearly undertaxed.

Wen’s money

11/11/2012

As the leadership of the Chinese Communist Party changes at ongoing 18th Party Congress, a piece in the New York Times casts a light on the scale of corruption in China.

It opens noting Wen’s poor background but then states bluntly, that his mother, “became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show”. The article goes on to write “Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership”.

It then notes that “A review of corporate and regulatory records indicates that the prime minister’s relatives — some of whom, including his wife, have a knack for aggressive deal making — have controlled assets worth at least $2.7 billion. In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners”.

The fact that such wealth can be gained by someone at the very top of Chinese power gives an insight into how much money is being acquired lower down the scale, the report adds “the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile, one of the country’s biggest phone operators, the documents show. At other times, the ventures won support from some of Asia’s richest tycoons. The Times found that Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects, sometimes by using offshore entities”.

The piece explains “The holdings include a villa development project in Beijing; a tire factory in northern China; a company that helped build some of Beijing’s Olympic stadiums, including the well-known “Bird’s Nest”; and Ping An Insurance, one of the world’s biggest financial services companies. As prime minister in an economy that remains heavily state-driven, Mr. Wen, who is best known for his simple ways and common touch, more importantly has broad authority over the major industries where his relatives have made their fortunes. Chinese companies cannot list their shares on a stock exchange without approval from agencies overseen by Mr. Wen, for example. He also has the power to influence investments in strategic sectors like energy and telecommunications. Because the Chinese government rarely makes its deliberations public, it is not known what role — if any — Mr. Wen, who is 70, has played in most policy or regulatory decisions. But in some cases, his relatives have sought to profit from opportunities made possible by those decisions”.

Yet it is too much of a coincidence that such wealth has been acquired by the family of the premier without his knowledge or assistance.

It goes on to give examples, “The prime minister’s younger brother, for example, has a company that was awarded more than $30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Mr. Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak. In 2004, after the State Council, a government body Mr. Wen presides over, exempted Ping An Insurance and other companies from rules that limited their scope, Ping An went on to raise $1.8 billion in an initial public offering of stock”. The article notes that there are formal rules around high officials and business but at the same time ” no law or regulation prohibits relatives of even the most senior officials from becoming deal-makers or major investors — a loophole that effectively allows them to trade on their family name”.

The article goes on to describe how a web of companies keeps Wen and his family in control but out of the limelight from the companies, “Wen’s relatives have sometimes been hidden in ways that suggest the relatives are eager to avoid public scrutiny, the records filed with Chinese regulatory authorities show. Their ownership stakes are often veiled by an intricate web of holdings as many as five steps removed from the operating companies, according to the review. In the case of Mr. Wen’s mother, The Times calculated her stake in Ping An — valued at $120 million in 2007 — by examining public records and government-issued identity cards, and by following the ownership trail to three Chinese investment entities. The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, the prime minister’s hometown”.

Of course Wen is not the only high official with money, as the article mentions “The apparent efforts to conceal the wealth reflect the highly charged politics surrounding the country’s ruling elite, many of whom are also enormously wealthy but reluctant to draw attention to their riches. When Bloomberg News reported in June” it was blocked by Chinese censors.

When asked by the New York Times to comment Wen and his family said nothing but some flimsy excuse was mentioned by, “Duan Weihong, a wealthy businesswoman whose company, Taihong, was the investment vehicle for the Ping An shares held by the prime minister’s mother and other relatives, said the investments were actually her own”.

The piece notes the role of Wen’s wife,  “Zhang Beili, is one of the country’s leading authorities on jewelry and gemstones and is an accomplished businesswoman in her own right. By managing state diamond companies that were later privatized, The Times found, she helped her relatives parlay their minority stakes into a billion-dollar portfolio of insurance, technology and real estate ventures”. Tellingly the piece goes on to mention “her lucrative diamond businesses became an off-the-charts success only as her husband moved into the country’s top leadership ranks”. Further to this Zhang enhanced her wealth because “jewellery regulators often decided which companies could set up diamond-processing factories, and which would gain entry to the retail jewelry market. State regulators even formulated rules that required diamond sellers to buy certificates of authenticity for any diamond sold in China, from the government-run testing center in Beijing, which Ms. Zhang managed”.

The article then turns its attention to Wen’s only son, Wen Yunsong, also called “Winston Wen”. The article mentions “Winston Wen and his wife, moreover, have stakes in the technology industry and an electric company, as well as an indirect stake in Union Mobile Pay, the government-backed online payment platform — all while living in the prime minister’s residence, in central Beijing, according to corporate records and people familiar with the family’s investments”. It mentions how “Wen’s earliest venture, an Internet data services provider called Unihub Global, was founded in 2000 with $2 million in start-up capital, according to Hong Kong and Beijing corporate filings. Financing came from a tight-knit group of relatives and his mother’s former colleagues from government and the diamond trade” adding that in 2005 he founded “New Horizon Capital with a group of Chinese-born classmates from Northwestern. The firm quickly raised $100 million from investors”.

In the space of seven years that article notes “the firm has returned about $430 million to investors, a fourfold profit, according to SBI Holdings”. The piece ends the discussion about Wen’s son, “In 2010, when New Horizon acquired a 9 percent stake in a company called Sihuan Pharmaceuticals just two months before its public offering, the Hong Kong Stock Exchange said the late-stage investment violated its rules and forced the firm to return the stake. Still, New Horizon made a $46.5 million profit on the sale”.

The response of Wen was to set up a probe. Apparently, he “sent a letter asking for the investigation to the Politburo Standing Committee, China’s equivalent of the Cabinet, according to the South China Morning Post. It is not known how the investigation will proceed, or if its findings will ever be made public, but the request was accepted, unnamed sources told the newspaper”.

Naturally enough the response of the Chinese government “The Chinese government swiftly blocked access Friday morning to the English-language and Chinese-language Web sites of The New York Times from computers in mainland China”. There is only so long this pattern will last for.

Vatican II at 50 Pt IV

18/10/2012

Continuing on from the series marking the 50th anniversary of the opening of the Second Vatican Council in October 1962, an article in the Irish Times, written by former Joseph Ratzinger doctoral student, Vincent Twomey.

He writes “the council had three aims: the renewal of the church, Christian unity, and an opening to the contemporary world. His programme was initially greeted with euphoria”. He adds by way of context that “To understand the impact of the council, the cultural situation of the 1960s needs to be taken into account. Prosperity had replaced the austerities of the second World War. Long in preparation, the sexual revolution erupted with volcanic force. Science and technology were quite literally reaching for the stars. New nations in Africa and Asia were shaking off the shackles of their colonial masters. The first Catholic president of the US, John F Kennedy, had ushered in a new era of confidence. The Soviet Union, the other world power, led by Nikita Khrushchev, was in the process of shaking off some of its Stalinist excesses”.

In a neutral fashion he points out that “Moral theologians were trying to develop an alternative to the legalist approach found in the manuals used to train confessors. Before the council, these developments were confined to a small number of critical theologians, some of whom had been silenced by the Holy Office”, this however was an enormous change. Thankfully the mechanistic approach that Jesus himself condemned was gone, and in came a gentleness and understanding of the complexities of human life that scant attention had been paid to before.

He notes how the Council was reported in the press, that journalists “naturally tended to interpret the intense debates in the Aula of St Peter’s in political terms, namely “progressive” versus “conservative”, thus replacing the traditional terms of orthodox and heterodox. Generally speaking, it was felt that the progressives won most battles at the council, but not without conceding compromises”.

While this was accurate it is impossible to remove politics from any aspect of life, including something that was taking place in such a time of change. He goes on to ask “This led liberal theologians to promote an interpretation of the council that was more true to what they now call “the spirit of the council” rather than the letter. Soon they were calling for even more radical developments (in doctrine, liturgy, discipline and morals), more often than not echoing contemporary currents of thought. They were assured of headlines and public approval. Others felt that the council had betrayed the church’s apostolic tradition. Confusion was rife. Was the council responsible?”

He goes on to write that “Cardinal Ratzinger, though critical of aspects of the council, denied this. The damage, he said, was due to the unleashing of polemical and centrifugal forces within the church and the prevalence, outside it, of a liberal-radical ideology that was individualistic, rationalistic and hedonistic. Those centrifugal forces, Ratzinger claimed, helped to unleash the student unrest in 1968, which he experienced first hand in Tübingen”.  There is indeed much to recommend this view which is the most historically accurate.

Though the Council remains divisive within Catholicism, it rightly continues to shape the very life of the Church.

Looking for a new economic model

12/10/2012

The rising gap between rich and poor (and the fear of socialist revolution) spawned a wave of reforms, from Theodore Roosevelt’s trust-busting to Lloyd George’s People’s Budget. Governments promoted competition, introduced progressive taxation and wove the first threads of a social safety net. The aim of this new ‘Progressive era’, as it was known in America, was to make society fairer without reducing its entrepreneurial vim”. It adds “as our special report this week argues, inequality has reached a stage where it can be inefficient and bad for growth”.

A poor distraction

25/09/2012

Mitt Romney, chose to re-enforce his wealth among the general populace, in an attempt to get away from the innumerable gaffes and sluggish poll numbers has, in an attempt to move the debate on has finally released his tax returns.

The Washington Post reports that “Mitt Romney paid $1.9 million in taxes on $13.69 million in income in 2011, most of it from his investments, for an effective rate of 14.1 percent”. The report goes on to note that Romney “could have paid less in taxes, but he engineered his 2011 returns to overpay the government to ensure that his effective tax rate would ‘conform’ with his statement last month that he had paid at least 13 percent, according to his trustee, R. Bradford Malt”. It could be easily argued that this was only done in the knowledge that these figures would have to be released eventually and that to pay less than 14% would be politically damaging.

The article goes on to write that “In their joint return, he and his wife, Ann, listed $4.02 million in donations to charity last year — nearly 30 percent of their income — which substantially reduced their tax obligation. They claimed a deduction for only $2.25 million of those contributions. Had the Romneys deducted all of their charitable donations, they would have paid about $467,000 less in taxes for an effective rate of 10.55 percent”. It is certainly laudable to give to charity but this does not change how Romney made his vast wealth. It continues that “If the Romneys had not taken any charitable deductions, their rate would have been 18.8 percent”.

Later on in the article mentions that “Romney’s 379-page 2011 returns show that he earned $6.8 million from capital gains and $3.6 million in interest. Romney earned about $190,000 in author and speaking fees, as well as $260,390 for sitting on the board of Marriott International. None of his income was from wages. Capital gains are taxed at a flat rate of 15 percent, substantially lower than the 35 percent rate typically levied on the wages of those with the highest incomes”. The article goes on to mention that “Romney also released a summary of his effective tax rates between 1990 and 2009, reporting that his average annual rate was 20.2 percent and that he never paid less than 13.66 percent. But the summary does not detail the size of Romney’s income and the amount of taxes during those years”.

There is however a general point to be made here. Romney’s actual, and nominal tax rate, be in 14% or 20% is far too low. The notion that those who play, and win, on the stock market, should pay a lower rate of tax then many middle class workers is a great shame. It is not only a shame but not in America’s long term economic interests to have such a tax system.

Deaf on both sides

21/09/2012

As  the protests spread across the Middle East and beyond, an excellent piece discusses the underlying causes of the strife from those protesting, and those being protested against.

He writes that during a conversation between President Obama and President Morsi of Egypt, “Morsi offered his condolences over the Libya killings, but White House officials report that he also seized his chance to protest directly to Mr Obama about the amateur YouTube video, apparently made in California, that defames the Prophet Mohammed”.

Vitally, the author, writes that “In so doing, Mr Morsi betrayed the yawning gulf between the two sides. The West’s failure to understand the Muslim world has been analysed to the point of exhaustion – and no doubt many criticisms have been justified”, yet being quite fair, he adds that Morsi, “When he told Mr Obama how angry he was over the YouTube film, did he not realise that he was rebuking the wrong target? Mr Obama had already made clear his revulsion over the video. No one has seriously suggested that the US government had anything to do with this absurd production. The President of the United States cannot be held responsible for the thoughts, opinions and actions of 300 million Americans. Nor, in a free society, can he ban his citizens from expressing themselves, even if they sometimes do so in crass and offensive ways”.

He adds “Egypt’s government still chose to ask Mr Obama – and every other Western leader – for something they could not possibly deliver. Hisham Qandil, the country’s prime minister, told the BBC that Western nations should revise their domestic laws to ‘ensure that insulting 1.5 billion people, their belief in their Prophet, should not happen and if it happens, then people should pay for what they do’. In other words, Egypt not only wants to ban its own citizens from expressing views that Muslims deem insulting, but its government thinks this prohibition should go global”.

This is just the kind of misunderstanding of culture that leads to violence against the West and is used by terrorists for their own ends. Morsi’s ignorance is typical of many in the Muslim world, though there are exceptions, who have no comprehension of the impact of the French Revolution and “the Enlightenment” and the ensuing individualism that has shaped Europe and North America. Until these events are explained to them then this deafness will only grow and lead to further intolerance and violence. This is no way condones the excesses of modern individualism or its roots, but without knoweledge of these events there will be no dialogue.

Blair goes on to write about this month being the 20th anniversary of the publication of The Satanic Verses, “One possible conclusion is that nothing has changed since the appearance of The Satanic Verses: the visceral reaction to the YouTube video shows that Muslim nerves are as raw as ever and the opposition to genuine freedom of expression just as deeply felt. But this would be too sweeping. Despite everything, there are some reasons to believe that the gulf of understanding might eventually close”.

He concludes that the “protests might be taking place outside US embassies, but many have little to do with America, still less the principle of freedom of expression. All Muslim leaders quickly learn how to direct the anger of their people away from themselves and towards Washington. In Sudan, for example, President Omar al-Bashir is so unpopular that massive protests against his regime have taken place in Khartoum. The situation is reaching a point where he risks becoming the next victim of the Arab Spring. So no surprise that Sudanese mobs have attacked the German, British and US missions. Mr Bashir is conveniently allowing the crowds to vent their fury on these targets, instead of on him”.

He ends the piece “So the battles being fought outside Western embassies are also signals of a wider struggle within Islam itself”. In the last 11 years much has happened to confront Muslims into sincerely thinking about their peaceful religion and its relationship with the modern world. It should be hoped that out of great violence comes wisdom.

The Chinese consumer

21/09/2012

In an interesting piece published some time ago in the Wall Street Journal, an author discusses the mindset of the consumer in China.

He opens the article noting ” From Nike to Buick to Siemens, Chinese consumers actively prefer Western brands over their domestic competitors. The rise of microbloggers, the popularity of rock bands with names like Hutong Fist and Catcher in the Rye, and even the newfound popularity of Christmas all seem to point toward a growing Westernization”.

He goes on to write importantly that “don’t be deceived by appearances. Consumers in China aren’t becoming ‘Western.’ They are increasingly modern and international, but they remain distinctly Chinese. If I’ve learned anything from my 20 years working as an advertising executive in China, it is that successful Western brands craft their message here to be ‘global,’ not ‘foreign’—so that they can become vessels of Chinese culture”. This shows much about the mindset of modern Chinese people. At the same time as being fiercely patroitic and nationalistic are almost in the same breath global and “modern”. They are brought up to despise the West and are happy to buy its products.

He adds “Though the country’s economy and society are evolving rapidly, the underlying cultural blueprint has remained more or less constant for thousands of years. China is a Confucian society, a quixotic combination of top-down patriarchy and bottom-up social mobility. Citizens are driven by an ever-present conflict between standing out and fitting in, between ambition and regimentation. In Chinese society, individuals have no identity apart from obligations to, and acknowledgment by, others. The clan and nation are the eternal pillars of identity. Western individualism—the idea of defining oneself independent of society—doesn’t exist”. He builds on this theme in China by mentioning that “self-expression is generally frowned upon, and societal acknowledgment is still tantamount to success. Liberal arts majors are considered inferior to graduates with engineering or accounting degrees. Few dare to see a psychologist for fear of losing ‘face’—the respect or deference of others—or being branded sick. Failure to have a child is a grave disappointment”. He adds that “Chinese at all socioeconomic levels try to “win”—that is, climb the ladder of success—while working within the system, not against it. In Chinese consumer culture, there is a constant tension between self-protection and displaying status. This struggle explains the existence of two seemingly conflicting lines of development. On the one hand, we see stratospheric savings rates, extreme price sensitivity and aversion to credit-card interest payments. On the other, there is the Chinese fixation with luxury goods and a willingness to pay as much as 120% of one’s yearly income for a car”. Yet, at the same time as all of this is happening, the very wealthiest Chinese are fleeing the country.

Yet these same societal traits that are so prevalent in China are at the same time under attack. The economic model the country has pursued is being challenged, albeit quietly, while at the same time the country bands together, having been fed on a diet of xenophobic ultra nationalism to bully most of its Asian neighbours.

He continues “First and most important, products that are consumed in public, directly or indirectly, command huge price premiums relative to goods used in private. The leading mobile phone brands are international. The leading household appliance brands, by contrast, are cheaply priced domestic makers such as TCL, Changhong and Little Swan. According to a study by the U.K.-based retailer B&Q, the average middle-class Chinese spends only $15,000 to fit out a completely bare 1,000-square-foot apartment”.

He gives a second example that “The second rule is that the benefits of a product should be external, not internal. Even for luxury goods, celebrating individualism—with familiar Western notions like “what I want” and “how I feel”—doesn’t work in China. Automobiles need to make a statement about a man on his way up. BMW, for example, has successfully fused its global slogan of the “ultimate driving machine” with a Chinese-style declaration of ambition”.

He concludes “Chinese crave ‘control’ of their own destiny and command over the vagaries of daily life. Material similarities between Chinese and Americans mask fundamentally different emotional impulses. If Western brands can learn to meet China’s worldview on its own terms, perhaps the West as a whole can too”. It is hoped that this urge for control does not extend to modern day control over the rest of Asia.

Conventions discussed

11/09/2012

In an interesting piece on the conventions the Economist notes that the Republicans want wish for President Obama to answer “a question so weighty that he cannot use his charm, personal popularity or powers of lofty rhetoric to escape from it, namely: is America better off today than it was four years ago, when he took office?”. This question is very convienent for the GOP to ask as it negates their own destructive, corrosive and immoral neoliberalism whilel clinging unrelentingly to their failed “trickle down” theory. Oddly enough, Romney seems to have embraced these failed policies (and attempting to buck history) by picking Paul Ryan as his running mate. Of course the GOP win the argumement if the question is framed the way they want. America, is not economically a better place after four years despite what Obama has said.

The magazine piece rightly notes that the Democratic convention “left questions unanswered about how Mr Obama, in a second term, might tackle America’s looming crisis of debt and public spending. Indeed, too many of the governors, senators, congressmen and union bosses invited to speak seemed to see no crisis at all, as they hailed the importance of continued government spending (or ‘investment’) on everything from new infrastructure to preserving middle-class jobs”.

The piece goes on to mention the Democratic convention, noting “several speakers, among them a former president, Bill Clinton, the First Lady, Michelle Obama, and a young Hispanic mayor from Texas, Julián Castro, accused today’s Republicans of misrepresenting the American dream, and even their party’s own traditions. Speaker after speaker reached into their country’s mythic past to paint a communitarian vision of American success”. There is nothing “mythic” about the communitarian values in America. Indeed, they are alive and well. To say that Americans are solely individualists is not true and ahistorical. It comments on President Clinton’s speech, who “enjoys high approval ratings from a public that remembers his two terms as a time of prosperity, solemnly painted the present-day Republican Party as captured by a hate-filled far-right and living in an ‘alternative universe’ in which all those who have achieved success are ‘completely self-made’. This he suggested, ignored a centrist case for business and government working together to promote growth and ‘broadly share prosperity'”. Yet while Clinton’s two terms were a success his policies were perhaps not quite so successful being much of the same rampant neoliberalism that the GOP are espousing now. Clinton undid the 1933 Glass Steagall Act leading to less regulation and more chaos later on.

The article concludes “for victory, Mr Obama must also win over a separate group: independents who backed him in 2008, but who are now gravely disappointed by the gap between his promises to transform Washington politics, and a reality that has seen him look like a prisoner of congressional dysfunction and obstructionism”. However, it is not a popular thing to say but few should have believed that Obama would change Washington politics forever so perhaps independents should look at themselves.

History of wikileaks

22/08/2012

Assange’s website began life controversially but “Since 2010, however, it has been pretty hard to make the case that WikiLeaks is a neutral transmission system. Nearly all its major operations have targeted the U.S. government or American corporations. When WikiLeaks released U.S. government cables, its stated purpose was to reveal ‘the contradictions between the US’s public persona and what it says behind closed doors.’ By contrast, when it released Syrian government cables in July, Assange was quick to point out, ‘The material is embarrassing to Syria, but it is also embarrassing to Syria’s opponents.’ This at a time when 14,000 people had already been killed in the uprising against Bashar al-Assad’s regime”.

The gasbag speaks

20/08/2012

In the lastest twist that is the farce of Julian Assange, “In a defiant statement from the Ecuadorian embassy’s ground floor balcony, 41 year-old Assange praised the nation of Ecuador for taking a ‘stand for justice’ in giving him political asylum. Addressing hundreds of loyal supporters outside the central London building this afternoon, the former computer hacker suggested there was ‘unity in oppression’. He urged the American government ‘renounce its witch hunt against Wikileaks’ and stop its ‘war on whistleblowers'”. All he shows is his lack of basic knowledge and chronic individualism.

Watching the slide

23/07/2012

There has been much discussion about the revival of religion, especially in Europe. It has been noticed that where there is growth it is with demoniations that are conservative, or theologically orthodox, in their thinking.

An article in the New York Times questions this assumption and argues for liberal Christianity. He writes that the leaders of the Episcopal Church (Anglican/Church of England) have “spent the last several decades changing and then changing some more, from a sedate pillar of the WASP establishment into one of the most self-consciously progressive Christian bodies in the United States”.

He goes on to write that “today the Episcopal Church looks roughly how Roman Catholicism would look if Pope Benedict XVI suddenly adopted every reform ever urged on the Vatican by liberal pundits and theologians. It still has priests and bishops, altars and stained-glass windows. But it is flexible to the point of indifference on dogma, friendly to sexual liberation in almost every form, willing to blend Christianity with other faiths, and eager to downplay theology entirely in favor of secular political causes”. Of course, if Benedict ever did this there would be no end to the demands by the reforms, until almost nothing of value was left. Undoubtedly the first thing the “liberal pundits and theologians” would abolish it the Latin Mass which has rightly been restored to a par with the vernacular Mass.

He goes on to mention that “instead of attracting a younger, more open-minded demographic with these changes, the Episcopal Church’s dying has proceeded apace. Last week, while the church’s House of Bishops was approving a rite to bless same-sex unions, Episcopalian church attendance figures for 2000-10 circulated in the religion blogosphere. They showed something between a decline and a collapse: In the last decade, average Sunday attendance dropped 23 percent, and not a single Episcopal diocese in the country saw churchgoing increase”. However, it may to too simple to equate modern reforms with declining attendence.

He makes the point that “This decline is the latest chapter in a story dating to the 1960s. The trends unleashed in that era — not only the sexual revolution, but also consumerism and materialism, multiculturalism and relativism — threw all of American Christianity into crisis”. Of course, not just the United States but “the West”, broadly defined. Indeed, it is these “values” of individualism and greed that societies are reaping now with the financial crisis and societal breakdown that Pope Benedict rightly attacks.

He writes that “if conservative Christianity has often been compromised, liberal Christianity has simply collapsed. Practically every denomination — Methodist, Lutheran, Presbyterian — that has tried to adapt itself to contemporary liberal values has seen an Episcopal-style plunge in church attendance. Within the Catholic Church, too, the most progressive-minded religious orders have often failed to generate the vocations necessary to sustain themselves”.

He goes on to write, with a note of caution that “Few of the outraged critiques of the Vatican’s investigation of progressive nuns mentioned the fact that Rome had intervened because otherwise the orders in question were likely to disappear in a generation. Fewer still noted the consequences of this eclipse: Because progressive Catholicism has failed to inspire a new generation of sisters, Catholic hospitals across the country are passing into the hands of more bottom-line-focused administrators, with inevitable consequences for how they serve the poor. But if liberals need to come to terms with these failures, religious conservatives should not be smug about them. The defining idea of liberal Christianity — that faith should spur social reform as well as personal conversion — has been an immensely positive force in our national life. No one should wish for its extinction”.

He concludes arging that “the leaders of the Episcopal Church and similar bodies often don’t seem to be offering anything you can’t already get from a purely secular liberalism. Which suggests that perhaps they should pause, amid their frantic renovations, and consider not just what they would change about historic Christianity, but what they would defend and offer uncompromisingly to the world”. While the American Conservative commenting on the same article writes that “The various conservative Christianities may not be fully reconcilable, but they all point to a source of authority, or sources of authority, beyond individual experience and subjectivity. That gives them their force, and their staying power”.

The common good secured

29/06/2012

The Supreme Court of the United States has decided to deem constitutional President Obama’s health care law in National Federation of Independent Business v. Sebelius. The 5-4 majority opinion was written by Chief Justice John Roberts.

Amid media confusion and political tactics many initially thought that law had been struck down, with Senator John Kerry (D-MA) interrupting hearings in the Senate to announce that the law had been upheld.

Reports note how “court said the health law’s individual mandate, which requires most taxpayers to either buy insurance or pay a penalty, is a tax and is constitutional. The court also altered the law’s Medicaid expansion without striking it down entirely”. The article  adds that “The fact that Roberts — a bona fide conservative appointed by former President George W. Bush — wrote the majority opinion is a blow to Republicans who had claimed the mantle of the Constitution in opposing the individual mandate. Republicans will press ahead with symbolic votes to repeal the Affordable Care Act, but they will have to make significant gains in November’s election to actually stop Obama’s signature domestic achievement from taking effect”. It goes on to note importantly that “The decision allows Roberts — whose legacy will rest in large part on this case — to avoid the severe repercussions that both sides of the case had feared. The court did not strike down the signature domestic achievement of a sitting president, nor did it give its approval to an expansion of Congress’s powers. The ruling will also change the way the political left and right view Roberts, who with his majority opinion became a target for conservatives. Roberts’ opinion on the mandate was joined by the court’s liberal members — Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan”. The report goes on to mention how the “justices upheld the mandate as a use of Congress’ tax powers — not as a regulation of interstate commerce. Obama argued repeatedly during the legislative debate that the mandate is not a tax, and the law would have been even more difficult to pass if Democrats had described the mandate as a tax”. Lastly, the piece notes how the “five justices in the Supreme Court’s majority are the first judges in the country to side with the Obama administration’s tax argument. It was rejected in every lower court, even those that ultimately upheld the healthcare law”.

Others mention how President Obama “initially thought his healthcare mandate had been overturned due to erroneous reports on cable news, according to senior administration officials. Obama had been standing in a room outside the Oval Office staring at a muted television screen showing four networks — including CNN, MSNBC, FOX News and one other — when his general counsel, Kathy Ruemmler, came into the room flashing two thumbs up. Ruemmler was the one to tell Obama and his chief of staff, Jack Lew, that the administration’s signature legislation had actually been upheld, senior administration officials said”.

Naturally, the winners and losers of the decision have been examined. The article notes that “decision has significantly changed the electoral landscape, though it remains to be seen whether the decision will help Democrats or Republicans at the polls this November”.  The article notes that among the winners are President Obama, Nancy Pelosi, AARP as well as interestingly, GOP fundraising efforts. The article says that the losers are the Tea Party, industry and President Bush, who appointed Roberts to the Court.

Others mention the reaction of the GOP with Senator Jeff Sessions (R-AL),  “a member of the Judiciary Committee who participated in Roberts’s lengthy confirmation hearings. ‘I think history may record that he was not right. I think he may have made a mistake.'” Yet such rhetoric belies not only the shock but the uncertainty and non committal attitude with what Sessions himself was saying. The report also notes the usual individualistic neoliberal hot air from Bachmann/Palin. It mentions how “Roberts ruled that the Constitution’s Commerce Clause did not allow the insurance mandate, but that it was constitutional under Congress’s power of taxation”. The usual common sense came from “Lindsey Graham (R-S.C.), another member of the Judiciary Committee, said he was not surprised at all by Roberts’s opinion and said Republican colleagues should not be upset”.

In an attempt to scare the electorate, the shamelessly hypercritical Mitt Romney said that “hat the Supreme Court’s decision to uphold President Obama’s healthcare law would put an unprecedented burden on people, including raising their taxes. ‘ObamaCare raises taxes on the American people by $500 billion,’ Romney said Thursday at a press conference across the street from the U.S. Capitol. ‘ObamaCare cuts Medicare — cuts Medicare by approximately $500 billion. And even with those cuts and tax increases, ObamaCare adds trillions to our deficits and to our national debt, and pushes those obligations onto coming generations.'”

Finally, others have tried to tie the incorrect notion of American decline to the Court’s ruling. Even if it is a tax America’s, especially wealthy Americans need to pay more tax anyway. The Court can be proud that it guarded the common good for all, not just those who can afford it, despite protecting their previous decisions of Citizens United on super pacs.

The time is now

21/06/2012

Osborne has decided to secure the common good and encact, more or less, the banking reforms proposed by Sir John Vickers.

A piece in the Guardian mentions that Osborne “is to announce that he has faced down strong lobbying pressure from the City and is to press ahead with plans to ringfence the high street operations of Britain’s major banks from their higher-risk investment banking arms. In an attempt to prevent a repeat of the crisis that saw a run on Northern Rock and the part-nationalisation of Royal Bank of Scotland and Lloyds Banking Group, a government white paper to be published by the Treasury includes the bulk of the recommendations made by the independent commission on banking (ICB) headed by Sir John Vickers”.

The report goes on to mention how Osborne “has agreed to only three significant changes from the Vickers report, but has not changed his mind about the need to ensure that banks’ customers are protected from losses generatedby the speculations of investment bankers”. The article goes on to mention how “UK banks have been urging Osborne to ensure that the ringfencing does not impose onerous restrictions on their businesses. The chancellor said in the 2011 Mansion House speech that he supported the Vickers approach to banking reform and will say that Thursday’s white paper demonstrates how the coalition plans to have a new structure for the industry in place within seven years”.

It concludes that “The chancellor will tell City grandees at Mansion House that legislation must be on the statute book by the end of the current parliament in spring 2015 and implemented by 2019 at the latest”.

As expected the drumbeat on behalf of individualistic neoliberalism is not far behind these sensible and hugely necessary reforms. The opinion piece says that “With the world economy heading for hell in a handcart – all the conventional measures of financial and economic stress are again flashing extreme, pre-Lehman-like, danger – we can be thankful for one thing. Never mind the impending doom, those clever clogs at the Treasury have been beavering away on a programme of banking reform that ensures this kind of thing can never happen again”. Yet this is the argument used time and again to frustrate the common good and protect the citizens of the state, and therefore the state itself. If regulation is not to be implemented now then when?

He goes on to describe it as “an expensive waste of effort” going on to argue that  the “Government has already dealt with failings in banking supervision by deciding to get rid of Gordon Brown’s hopelessly misconceived Financial Services Authority and reuniting prudential oversight with its natural home at the Bank of England.Yesterday we were presented with yet another White Paper on financial reform, this one intended to give substance to the Vickers proposals for changing the architecture of the banks themselves. What’s proposed is essentially just the G20 agenda for winding up problem banks, but with bells and whistles attached – a capital surcharge, depositor preference and, most controversial of all, ring-fencing of ordinary retail banking from wholesale banking”.

He concludes that “There is, of course, nothing wrong with this kind of slamming of barn doors long after the horse has bolted. After messing up so monumentally, shredding the public finances in the process, bankers have surrendered any right they might once have had to self-governance. But if we take the banking crisis now tearing the eurozone apart as an example, there is not a single thing in this White Paper which would have prevented it”, adding later that the proposed reforms are useless and implies that they do not go far enough, when he says “Large parts of yesterday’s reform agenda are just costly window dressing, a triumph of political posturing over economic sense”.

He ends saying that the present crisis should take precedence over all else, but when growth begins again it will be too late and there will be no mood for regulation. Now is the time.

The Moral man

02/06/2012

Support for Dr Vince Cable has come from the most unusual of places, Peter Oborne of The Daily Telegraph.

Oborne writes that many hard right Conservatives, like Bernard Jenkin, Peter Bone and others “regarded Vince Cable as the least congenial member of the Coalition government right from the start. A former Labour councillor in Glasgow and special adviser to John Smith when he was trade secretary in the Jim Callaghan administration of the late 1970s, Mr Cable has often seemed mulish and uncooperative”.

Oborne goes on to write that “The notorious Cable scowl has occasionally cast a dark cloud over Prime Minister’s Questions. In a government of chums he is not a chum. Part of the problem is age. The four members of the so-called “Quad” who run the Coalition and get on so well – Cameron, Clegg, Osborne, Alexander – are all in their early to mid 40s. Mr Cable was president of the Cambridge Union in 1965, before any of them was born”, adding that “Some of the briefing against Mr Cable has been merciless. One Conservative minister told me that ‘he just doesn’t like or understand business,’ accusing him of failing to listen to Britain’s largest companies. Others accuse him of blocking pro-business reforms. This insidious line of attack finally came out into the open yesterday when The Daily Telegraph carried an interview with the Tory donor and private equity boss Adrian Beecroft”.

Of course this is patently false. The notion that the Tory hard right, that still clings unquestioningly to rabid individualistic neoliberalism, that has so obviously failed, should criticise Dr Cable who aims for a more capitalism that is more ordered towards stable growth with the necessary regulation for the greater good with respect for those who are less well off. As Oborne notes, “I believe that any serious and objective consideration of Mr Cable’s record in office shows that he has been a formidable Cabinet minister, an important ally of enterprise, and, above all, one of the most loyal and supportive members of this Government” adding crucially that “The true test of loyalty comes when a minister’s support is sacrificial, in the sense that it is unpopular with his own political base and therefore damaging to his personal interests. Mr Cable endured just such a test, and emerged with flying colours, when he threw his full-hearted backing behind the higher education reforms, the responsibility of his Tory junior minister David Willetts, in the early months of the Coalition. These reforms, and in particular the proposal to raise tuition fees to an upper limit of £9,000, were toxic among Liberal Democrats. Mr Cable could have stood aside, and there were some who advised him to do so. Instead, he joined the battle”.

Oborne goes on to mention that “he has shown unstinting support for Mr Osborne’s financial strategy, and resisted what must have been a very substantial temptation to set himself up as an alternative chancellor. Accepting that retrenchment was inevitable, he oversaw a significant reduction in the number of his department’s civil servants, once again a hateful move for Liberal Democrats. He has not just acted by the letter, but in the full spirit of this reforming Government, quietly privatising the Royal Mail, standing out against new regulation in the workplace, and becoming a powerful advocate of Oliver Letwin’s ‘red tape challenge’. Mr Cable deserves the bulk of the praise for the recent small surge of inward investment into Britain, though characteristically he has not tried to grab all the credit”.

The Tory hard right are, on this issue, wrong. Cable deserves respect and support from all sides for his excellent work on the debt as well as rebalancing the British economy on a sustainable, moral centre.

A new record

25/05/2012

Reports note that “About four in 10 Americans said they support abortion rights in a new Gallup poll — the lowest figure recorded by the organization since it began asking the question in 1995“. Is the noxicous tide of individualism turning?

A fitting response

21/05/2012

After the actions, or lack thereof, by Sean Cardinal Brady became apparent, reports notes that “Just 20 of 150 priests in the Armagh Archdiocese invited to attend a prayer gathering in support of Dr Brady actually showed up”.

Her true self

17/05/2012

Rebekah Brooks having given evidence at Leveson, has been formally charged. Yet, as befits her rabid, selfish individualistic relavtivism “Brooks angrily attacked police and prosecutors for dragging her friends and family into the phone hacking scandal as she said she was ‘baffled’ to face charges”.

“Detailed discussions”

16/05/2012

As the UK phone hacking scandal rolls on, former chief executive of News International, Rebekah Brooks gave evidence to the Leveson Inquiry.

Brooks also served as editor of The Sun and other “newspapers”. Reports mention how she “‘had detailed discussion with David Cameron’ on phone hacking”, while others note how Brooks met Cameron 22 times. Related articles examine that “Cameron had a conversation with the News International executive to discuss the ‘story behind the news’ after Sienna Miller filed a legal claim against the media company. The actress’s legal action was pivotal because it proved that hacking at the News of the World was not restricted to a single ‘rogue’ reporter, as the company had insisted”. The article goes on to mention how “Brooks denied that Mr Cameron asked her for information because he was having ‘second thoughts’ about Mr Coulson, but said she had more than one conversation with him about phone hacking after the ‘rogue reporter’ defence fell apart. The Prime Minister is expected to insist that he was unaware of the significance of the Miller claim at the time of the conversation”.

Amazingly, the report goes on to mention that “a lobbyist for News Corporation emailed Mrs Brooks to say that Jeremy Hunt, the Culture Secretary, had asked him for advice on ‘Number 10’s positioning’ on the scandal. Mr Hunt’s office said yesterday that the email — the only document disclosed by Mrs Brooks — was ‘completely inaccurate’. However, previous close contact between the lobbyist and the minister’s special adviser, Adam Smith, led to Mr Smith’s resignation last month. The disclosures prompted questions about the Prime Minister’s judgment and his decision to become personally embroiled in the scandal. Mrs Brooks also alleged that Mr Cameron had ‘indirectly’ contacted her after she was forced to resign last summer to offer his support and tell her to ‘keep your head up’. This shows the obvious scale of the power of Murdoch with Hunt’s position looking increasingly tenous. Other articles also highlights the closeness of Cameron to Brooks.

Related articles mention how “email shows that News Corp was given an ‘extremely helpful’ tip-off by Mr Hunt’s office that he would refer to phone-hacking in a statement to Parliament. It was released to the Leveson Inquiry by Rebekah Brooks, the former chief executive of News International, as part of her witness statement to the Inquiry. As well as dragging Mr Hunt further into the row which has already claimed the scalp of his special adviser Adam Smith, the email makes uncomfortable reading for David Cameron, as it suggests his response to the phone-hacking scandal was being guided by the owner of the News of the World. The email was sent by Frederic Michel, the News Corp head of public affairs whose emails to and from Mr Smith, previously released to the Inquiry by Rupert Murdoch, showed that News Corp was being given advance notice of key decisions in the Government’s scrutiny of its bid to take over BSkyB”.Worse still the news article mentions how “At the time the email was sent, the Metropolitan Police was six months into its ongoing investigation into phone-hacking at the News of the World, which later led to the arrest of Mrs Brooks”. Brooks response to the email has been noted as “In response to questioning about the message and what it may have meant, Ms Brooks simply offered: “I think it speaks for itself.'” Reports that former director of communications for Cameron Andy Coulson mention that “when asked if Mr Cameron sought further assurances he was in the clear over the issue after an article was published in the Guardian in 2009, which suggested hacking went far beyond ‘one rogue reporter’, Mr Coulson said: ‘Not that I recall'”.

This continues to show the depths to which people will sink to gain a “profit” at whatever cost to society but not to oneself. All this only makes Hunt’s hold on his job more tenous and the Cameron’s hold  on the top job weaker.

To the right

28/04/2012

A piece in the Economist notes that the economic policies of Romney are facing justifiable criticism.

It notes that Romney greeted Paul Ryan’s (R-WI) proposed budget which shockingly “proposed to slash income-tax rates, especially for the rich and businesses, and replace traditional Medicare with vouchers for the elderly to buy health insurance” the first time around caution, but as he got closer to winning the nomination, the article notes that Romney “steadily warmed to Mr Ryan’s plan as he faced a series of rivals from his political right. By December he was attacking Mr Gingrich for criticising it, and this past February he released a new tax plan of his own that slashed all personal tax rates by 20%. And when Mr Ryan produced a new, very similar, version of his budget on March 20th for next fiscal year, Mr Romney was effusive. ‘It`s a bold and exciting effort,'”.

The article goes on to mention how “His 2010 book, ‘No Apology’, reads more like a McKinsey report than a memoir” with “It ranges from the business practices of Japanese doctors to how much profit Comcast, a cable company, invests. Leaf through it and last September’s policy platform with its 59 specific proposals, and you will encounter sober discussion of ways to deal with greenhouse gases, international trade and retraining”.

It goes onto examine his policy advisers who “are Glenn Hubbard, the dean of Columbia University’s business school, and Greg Mankiw, a Harvard economist and author of bestselling textbooks. Both served as chairman of George W. Bush’s Council of Economic Advisers; neither is a fire-breathing conservative, having advocated policies anathema to the right such as cheap government-backed mortgage refinancing (Mr Hubbard) and higher petrol taxes to counter global warming (Mr Mankiw)”.

It adds that “Less than two months after the election, Mr Bush’s tax cuts and Mr Obama’s temporary payroll-tax cut will expire, while savage cuts to defence and other domestic spending will automatically kick in, thanks to the deal that raised the debt ceiling last August and the failure of a congressional committee to come up with an alternative. The combined fiscal effect would be worth 3.5%-5% of GDP, enough to tip the economy back into recession”.

It notes that Romney’s own economic proposals consist of “cut the corporate income-tax rate from 35% to 25%, end taxes on companies’ foreign earnings, and eliminate taxes on capital gains and dividends for those earning less than $200,000 a year. On personal taxes he promised only to preserve Mr Bush’s tax cuts (which would keep the top rate at 35% rather than returning it to 39.6%), while murmuring that one day broader reform, involving lower rates and a broader base, might follow. But those proposals increasingly looked timid next to the heftier, and more irresponsible, tax cuts his rivals rushed to embrace”.

Yet there is no room to tax cuts of any description, and they are exactly want is not needed at this time. Taxes on the wealthiest must raised and cutting capital gains taxes and Romney and Ryan propose are ludicrous and reckless.

Not only that but as the article mentions, “Romney claims that this plan would be neutral in terms of both revenue and distribution, meaning it would not change the level of tax take or the relative position of rich and poor”, this claim is of course ridiculous.

The faster this outdated neoliberalism is ditched the better society will be with a far greater chance of the common good becoming reality.

Deeper and deeper

26/04/2012

So the phone hacking story takes another interesting turn. Yesterday, given evidence to the Leveson Inquiry, James Murdoch implicated very senior government figures in his failed attempt to take over BSkyB. These allegations, come just two months after Murdoch resigned as executive chairman of UK News International.

In December 2010 the bid was being examined by Dr Vince Cable, Secretary of State for Business. However, after a Cable was caught on camera saying he would make war on the Murdoch bid to take control of the company, Prime Minister David Cameron removed it from Cable’s remit and gave it to Jeremy Hunt, Secretary of State for Culture, Media and Sport.

However, during his evidence to the Murdoch showed how both aides in Hunt’s office and people connected to Murdoch had exchanged dozens of communications that repeatedly show Hunt’s obvious bias in favour of the Murdoch bid. Reports mention how “News Corporation released more than 170 pages of ‘evidence’, consisting of internal emails and text messages, detailing the company’s extraordinary efforts to lobby the Government. The emails largely contain messages sent by Frederic Michel, the head of public affairs, to James Murdoch and other senior executives at News Corp detailing his discussions with the Government. The company also released emails and text messages between Mr Michel and Adam Smith, Mr Hunt’s main special adviser. In one message, Mr Michel detailed what the Culture Secretary would say to Parliament the next day on the BSkyB takeover, noting that it was ‘absolutely illegal’ for him to obtain the information”. The article goes on to say how “Another email, dating from January last year, reported Mr Hunt’s belief that it would be ‘game over’ for opponents of the BSkyB takeover once plans to spin off Sky News into a separately listed company were announced. On Sunday, Jan 23 2011, he sent another email to James Murdoch, relating ‘a very constructive conversation with JH’ which mentions a ‘plan’ that would help create ‘game over for the opposition’. Two days later, Mr Hunt said he was minded to refer the BSkyB takeover to the Competition Commission but delayed doing so while he considered proposed concessions from News Corp. Later that day Mr Michel emailed Mr Murdoch to say: ‘JH believes we are in a good place tonight.'” A slew of other contacts between Hunt’s office, Hunt personally, Michel and Murdoch have been released, making simply amazing reading. In effect, Cameron removed the biased Cable, and gave it to the equally biased Hunt.

At the same time, Murdoch gave evidence saying that David Cameron was implicated. This comes just days after Cameron declared that he would do better and put what was seen as a bad month behind him. This was called for, especially when the disastarous budget was taken into account with the so called “granny tax“, hitting those who are the most firm supporters of Cameron’s Conservative party, in addition to making it harder to give to charities as well as Cameron personally hosting dinner for six figure sums with major business figures.

Predictably, and somewhat hypocritically, the opposition Labour party have called for Hunt to resign. Yet, as was thought, his adviser, quit, presumably under pressure in an attempt to keep Hunt in his job. Cameron has backed Hunt, though it is unclear how long this support will last. Indeed, some have acidly, but correctly noted Cameron’s own links to the Murdoch machine.

Yesterday, James’ father, Rupert gave evidence to Leveson saying Gordon Brown was not ‘in a balanced state of mind’. Murdoch Snr also made comments regarding Tony Blair and other governments.

Reports note that James Murdoch “did speak to David Cameron about News Corp’s bid for BskyB at a dinner party held by Rebekah Brooks”. The report adds that “Until now, Mr Cameron has always refused to issue an outright denial that he spoke about BSkyB during the meeting with Mr Murdoch on Dec 23, 2010”. Yet these denials are looking almost impossible to refute. Indeed, the one thing keeping Hunt in his job, for now, is that the scandal is certain to keep going all the way to Cameron himself. Alternatively, Cameron, could sack Hunt in an attempt to look strong, but there would be no guarantee that the party would keep Cameron on for long if he was seen as an electoral liability.

There is of course a wider picture that needs to be addressed. Firstly, like party funding, the role the media plays in a society is far too important to have “the market” play its tricks, with the widely refuted “arguments” it puts forward. Secondly, this continues to show how neoliberalism and morality have no relation to each other, with a heady mix of relativism and greed driving it on to great depths of individualism and immorality all in the name of greater profit, irrespective of the cost to society at large.

In the right company

24/04/2012

Julian Assange begins his TV show by interviewing a terrorist. They must have so much in common.

Emptying pews

22/04/2012

In an unusal move Catholics in the diocese of Trenton, NJ, have participated in market research on lapsed Catholics.

A report in the National Catholic Reporter notes how “Villanova University in Philadelphia asked former Catholics in the Trenton, N.J., diocese why they left the church”. The piece goes on to say that “the study suggests new ways the church can approach Catholics who are dissatisfied with what the church teaches or how it acts — including those so dissatisfied that they have decided to leave”. It goes on to mention how “One of their key recommendations was for pastors, bishops and other church officials to respond consistently to questioning or angry Catholics with constructive dialogue rather than a simple reiteration of church rules or policies”.

It mentions how “Fr. William J. Byron, a professor of business at St. Joseph’s University in Philadelphia — who collaborated in the study with Charles Zech, founder and director of the Center for the Study of Church Management of Villanova’s School of Business — several times cited a response of one disaffiliated Catholic who complained, ‘Ask a question of any priest and you get a rule; you don’t get a ‘Let’s sit down and talk about it’ response.'”

Unsurprisingly the news report goes on to say how “Byron and Zech told conference participants at The Catholic University of America that many of the responses from lapsed or disaffiliated Catholics in the Trenton diocese matched what researchers have known from other surveys: They object to what they see as the church’s unwelcoming attitude toward gays and lesbians or toward the divorced and remarried, they find homilies uninspiring, the parish unwelcoming, the pastor arrogant or parish staff uncaring, or they have suffered terrible personal experiences with a priest or other church official, such as rejection for being divorced”. It goes on to say that “Some of the former Catholics complained of priests being too liberal, while others cited ‘the extreme conservative haranguing’ they heard in homilies – reflecting the intra-Catholic political divisions that reflect similar divisions in the broader U.S. society”.

It says that “Trenton Bishop David M. O’Connell said he invited Byron and Zech to conduct the survey of ex-Catholics in his diocese after reading an article Byron wrote last year in America, a national Jesuit magazine, suggesting that ‘exit interviews’ of former Catholics might help the church to understand better why Catholics leave the church and to respond more effectively to their concerns”.

The article in America that kicked off the desire of Bishop O’Connell is prevalent throughout Europe, most recently in Ireland, and is a direct result of  the Church authorities themselves as much as laity unwilling to accept naked hypocrisy.

A further move that will only infuriate many in Europe and North America is the news from Rocco that, “Citing ‘serious doctrinal problems’ found over the course of a four-year study of the umbrella-group representing the majority of the US’ communities of nuns, the Holy See has announced a thoroughgoing shake-up of the Leadership Conference of Women Religious (LCWR), naming Archbishop Peter Sartain of Seattle as its delegate to conduct an overhaul of the group”. Rocco goes onto note “Despite the lack of official comment, a former LCWR president — and quite possibly the body’s most celebrated member — Benedictine Sister of Erie Joan Chittister told the National Catholic Reporter that ‘When you set out to reform a people, a group, who have done nothing wrong, you have to have an intention, a motivation that is not only not morally based, but actually immoral'”.

Maybe this is exactly want Benedict wants?