Category Archives: Socialism

Michael Hudson dissects the European vote

And he gets right to the heart of it in this Anon Waronczuk interview for The Real News Network.

The most dramatic results of the European parliamentary elections consisted of the repudiation of the the austerian policies imposed by the neoliberalist of Brussels and national governments — including those dominated by socialist-in-name only parties.

Votes for outsiders and massive refusal to vote were the chief characteristics of the election, says University of Missouri-Kansas City economist Michael Hudson [previously], who notes that Europeans have abandoned “socialist parties” because they have swap their nominal socialism for the austerian imperatives pushed by corporateers and banksters.

We doubt you’ll find a better analysis of the elections anywhere else.

From The Real News Network:

Voters Reject Traditional Left Parties In EU Parliament Elections

Note: There’s no transcript posted yet, but when there is, we’ll update with the link.

Video report: Chinese ‘reforms’ as neoliberal looting

In an interview with Paul Jay of The Real News Network, Minqi Li, assocate professor of economics at University of Utah, rases most of the points we’ve been raising about the just-announced Chinese reforms, namely that they are manifestations of a neoliberal economic structure designed by and for the benefit of the rich.

Chinese Reforms Make Rich Even Richer

From the transcript:

LI: And there is nothing in the decision that would suggest the Party cares very much about a possible income redistribution that is in the favor of labor. Instead, it appears most of the decisions are targeted towards raising the income for the capitalist. And so that would be against the possible macroeconomic and the social rebalancing of the Chinese economy.

JAY: By reducing the role of the state, and particularly in the banking sector, they seem to be going more and more to essentially and actually an American model of capitalism, which is not some great success here.

LI: Yes. And one of the surprising thing is that there’s no reflection of the failure of global neoliberalism in this Party decision at all.

And, of course, in one of the decision, it does say it’s going to raise the dividend payment by the state-owned enterprise to the government, which is supposed to be used for social welfare. But that is actually going to be quite insignificant. The overall Chinese economy right now is between 50 trillion to 60 trillion yuan. And then the total before-tax profits from the state-owned sector right now is only about 1 trillion yuan. So it’s only about 2 percent of China’s GDP. And then the state-owned enterprises already pay about one-third income tax on their profits. So if you just take about 30 percent from the after-tax profits, that may be just 0.5 percent of China’s overall GDP. So that’s not going to really increase the social welfare a lot.

Quote of the day: Asking the right questions

From economist Richard D. Wolff, writing in The Guardian:

Capitalists know their system is unstable. They have never yet prevented recurring crises. They rely instead on policies to “manage” them. The two-step hustle – borrowing for stimulus and bailouts and then austerity – usually does the job. Keynesians promote the borrowing and then seem surprised, even outraged, when austerity follows.

Corporations and the rich should not have escaped taxation in the first place because they helped to cause the crisis; they enriched themselves the most in the decades before the crisis; and they can best afford to pay to overcome the crisis. Had they been taxed to pay for stimulus and bailout, no need would have arisen for borrowing or austerity.

Taxing corporations and the rich would have consequences too, but they would generate far fewer social costs and fall mostly on those best able to cope with them.

But any organized opposition strong enough to make corporations and the rich pay for capitalism’s crises would likely also question capitalism itself. Emerging from nearly six years of crisis, the question “can’t we do better than capitalism?” pushes forward, demanding discussion, debate, and democratic decision.

Read the rest.

Chart of the day: GOP cold shoulders Canada

Should Canada and the U.S. merge.? Democrats say yep, but not the GOP. Probably that socialized medicine, eh? Although like a certain conservative Canadian mayor, a lot of GOPers sound like they’ve been smokin’ crack. [But unlike the GOP, he mayor has apologized.]

From YouGov:

BLOG O Canada

Tea Party shutdown, an interview with Paul Street

Journalist and activist Paul Street has written extensively about the rise of the latest incarnation of Republican Party, media-fueled nationalist populism

In this two-part discussion with Jessica Desvarieux of The Real News Network, Street explores the role the Tea Party played in the current federal shutdown and delves into its origins and the motive of the folks working so hard to promote their agenda.

From The Real News Network. . .

Part I: Gov’t Shutdown Reflects Struggle Within Capitalist Republican Elite

Tea Party candidates strong desire to roll back New Deal comes out of the GOP establishment’s own creation

An excerpt from the transcript:

The vote two days ago to deny the continuing resolution, you know, to fund the government unless Obama care was repealed (you know, an incredible demand, right, to roll into a budget process) was 231 House votes in support of that. And that’s far more than the numbers of people in the Tea Party Caucus, which I think is about 45, 50 at the most. [incompr.] pretty much a straight-line party vote. The vote yesterday to deny continuing resolution unless Obamacare was delayed for one year was 228 votes — again, much bigger. And this was also true during the debt ceiling crisis. It was pretty much a rump vote of a much broader right-wing House Republican group that’s much larger than just the Tea Party phenomenon.

We forget how far to the right — admittedly, what the Tea Party — very much in sort of the shock troop vanguard ever since 2009–but how far to the right the Republican Party — and in fact the whole party system in this country — has been moving over the last three decades plus of neoliberal politics in the United States. There was a government shutdown in the mid 1990s carried out by Tom DeLay and Newt Gingrich. They didn’t call themselves Tea Party. In many ways they might as well have. I’ve been calling the Republicans half jokingly for the last few years the Teapublicans.

That said, there is no doubt that the Republican right in the age of Obama, [incompr.] to some extent before that, in its desire to roll back what’s left of the welfare state, what’s left of the New Deal, and back in the Reagan era, in order to crush what was left of the New Deal era, did call, has called into being an almost Frankenstein-like monster in the form of Fox News, a far right-wing talk radio network, and has really created a kind of almost frothing constituency in these very tightly gerrymandered, often rural, white congressional districts.

Part II: Who is Behind the Tea Party?

From the transcript:

The big elite interests behind both of the parties, the ones with the most money, are more multinational and they tend to be more tied to Wall Street, and they think more in global terms than in terms of the overall health of the national economy. A lot of these elite interests, the very top sort of multinational financial corporate elites on the Republican side were willing to bring these sort of shock troops, this sort of frothing base funded by the Koch brothers and the rest into being in order to smash labor, in order to smash the welfare state, in order to go after Social Security, and basically [incompr.] to undo the last remnants of a social and welfare state, of the Great Society, of the New Deal, and so on, that’s fine, you know, willing to sort of bring these people into being as sort of proto-fascists, proto-fascistic shock troop. But at a certain point they go too far, and now they’re stepping back and being almost sort of horrified by this Frankenstein that they brought into creation. I mean, basically you sort of–it’s like the old the John Birch Society of the late ‘50s and the 1960s now has its own television network and its own talk radio network and this whole huge, vast, well-funded foundation network. And those folks, those far-right shock troops, are, you know, stand your ground. They are ready to go all the way to the wall and don’t seem to [incompr.] to shut this government down in ways that only financial interests just don’t find functional and in fact find dysfunctional.

I think this shutdown right now that we’re in, there have been 15 of these in American history, and they tend to be fairly sort. And, of course, not the entire — the entire federal government hasn’t been shut down, so-called nonessential services. It’ll probably be a fix of some kind in the not so distant future.

What I think really horrifies elite interests is the notion that the right, in its ideologically, culturally driven paranoid obsession with supposedly socialist Obamacare will refuse to allow the raising of the debt ceiling. And I think that’s when things really get serious, because then you’re talking about the undoing of America’s status as the investment location of last resort for multinational capital. And you’re talking about undoing the favored status of Treasury bills and you really start attacking financial institutions. And so, you know, the capitalist elite is sort of caught in the conundrum, on the contradictions of its own cultivation of these horrific elements, these paranoid elements who now threaten to bring down the whole house in ways that the elites never had in mind and they’ve never wanted. And so you hear these sort of horrified comments from people like McCain.

Headlines of the day III: Econ, environs, Fuku

Even with Greece broken out for an earlier post, there’s still lots to report, and a lot of it focuses on growing class divisions. There’s Fukushimapocalypse Now!, the latest from China, and lots more after the jump.

First up, Salon debunks that myth loot-o-crats use to justify their Brobdingnagian greed:

Executive stress is a myth!

How tough is it to be the boss? Not nearly as tough as the Wall Street Journal and Forbes would have you believe

And then there’s this, from Business Insider:

Economist Wins Genius Grant For Proving That Most Traders Are Idiots

From Bloomberg, guess where most of it went?:

Household Net Worth in U.S. Increases by $1.3 Trillion

Meanwhile, there’s this from 24/7 Wall St.:

Seven States Slashing School Spending

Bloomberg again, sounding a sour note:

Demand for U.S. Capital Goods Climbs Less Than Forecast

Orders for goods such as computers and machinery rose less than forecast in August, showing a pickup in U.S. business spending will take time to develop.

Similarly sour, from the London Telegraph:

US consumer confidence slips as house prices rise at the fastest rate in seven years

US consumer confidence fell slightly in September as Americans grew more wary about the outlook in coming months, according to a closely watched report.

From Reuters, chop chop:

Citigroup to cut 1,000 mortgage jobs, mostly in Las Vegas

Bloomberg reports another form of chopping. [By way of disclosure, we once reported for McClatchy’s flagship paper, the Sacramento Bee]:

McClatchy to Shut Down Retirees’ Health-Care Plan by End of 2014

Bloomberg again, with another discordant note:

Wal-Mart Cutting Orders as Unsold Merchandise Piles Up

From NBC News, the search for profits turns to catering to the elite:

Luxury tampons? Companies spurn middle class – to everyone’s loss

Reuters offers Banksters Behaving Badly:

‘Massive fraud’ at center of trial against BofA over U.S. mortgages

Bank of America Corp’s Countrywide unit placed profits over quality in a “massive fraud” selling shoddy mortgages to Fannie Mae and Freddie Mac, a U.S. government lawyer said on Tuesday.

And from Zero Hedge, ominous news:

The Credit Bubble Is Not Only Back, It Is 94% Bigger Than In 2007

My Budget 360 raises another alarm:

Debt serfdom via student loans: A new class of indentured servants now carry the $1.1 trillion student loan bubble and cracks are already plaguing the system.

While MercoPress reports good news mixed with small numbers for those who cater to the real high-flyers:

IATA forecasts a strong 2014 for the industry, but airlines on average only retain 5 dollars per passenger

The International Air Transport Association (IATA) has revised its 2013 global industry outlook downwards to 11.7 billion on revenues of 708 billion dollars, but anticipates that all regions during 2014 will see improved profitability, with divergence in performance and with strong emphasis in North America with 6.3 billion net profits.

And off to Europe. . .

We begin with a Troikarch’s demand from the London Telegraph:

Eurozone governments must give up more power to avoid another crisis, say IMF economists

Eurozone governments must cede more of their sovereignty, create a joint budget and move towards issuing eurobonds to complete a fiscal union and avoid another crippling debt crisis, according to an International Monetary Fund report.

Now add this dimension from New Europe:

Industrial output continues to divide Europe

A two-tier Europe continues in the field of its industrial base, according to new statistics.

Then factor in this from EUbusiness:

Industry on worrying slide in EU, warns report

Industry in the European Union is in a “worrying” state with crucial ground being lost on productivity and employment, the European Commission warned on Wednesday.

Euobserver inspires con-fidence:

ECB hires controversial consultancy for bank audit

The ECB has hired the same consultancy that overlooked Ireland’s banking problems to help with an audit of the eurozone’s 130 largest banks.

Reuters points to an even bigger worry:

Top EU banks have Basel capital shortfall of 70 billion euros

The top 42 banks in the European Union would need an extra 70.4 billion euros ($95 billion) of capital to comply with new rules that take full effect in 2019, the bloc’s banking watchdog said on Wednesday.

Furthermore consider the evolution of a supra-national regulatory regime. From EurActiv:

EU-US trade talks delve into regulatory maze

A gulf has opened up in the approaches taken by the two sides in the transatlantic trade talks, with the European Union wanting sector-specific commitments and the United States leaning towards rules that would apply across industries, EurActiv has learned.

Then recall how this record of how previous supranational regimes played a major role in precipitating the global economic crisis. From Sky News:

Libor Scandal: ICAP Fined Amid Criminal Probe

  • A broker known as Lord Libor and promises of Ferrari gifts emerge in the latest rate-rigging scandal allegations.

  • The London-based brokerage ICAP has been fined £55m and told three individuals will face criminal charges in connection with the Libor rate-rigging scandal.

And from Ireland via Vice, just like old times:

Angry Communists Are Returning to the Streets of Working-Class Belfast

More signs of division from MercoPress:

Germany’s ‘Mom’ Angela no darling for the EU Mediterranean members

Southern Europeans are facing four more years of ‘mutti’ (Mom) Angela Merkel — whether they like it or not. Majorities of 82% in Spain, 65% in Portugal and 58% in Italy repudiate the German leader’s handling of the Euro area’s debt crisis, blaming her for drastic cuts in social services, recession and record unemployment, according to a German Marshall Fund poll released last week.

Call this one a Franco-Bunga-Bunga Bump for a supranational player, albeit one facing pimping charges [really], from FRANCE 24:

Ex-IMF chief Strauss-Kahn takes job as bank boss

Disgraced former IMF chief Dominique Strauss-Kahn appears to be making a career comeback after he was named head of a multinational investment firm. The news comes just weeks after Serbia announced that he had been hired as a government advisor.

The South China Morning Post plays it another way:

Disgraced former IMF boss Dominique Strauss-Kahn set to become bank chairman

Next, from Reuters, a shrieking French alarm:

Euro crisis over? Think again. France “100%” set to implode

France, Indian worries, Chinese rumblings, Fukushimapocalyse Now! after the jump. . . Continue reading

Cuba at the crossroads: The rise of the co-op

In the aftermath of the 1917 revolution in Russia, Vladimir Lenin aggressively nationalized industry and merchandising, a policy that quickly led to popular

“Socialist Russia will come from NEP.” —Lenin Source.

“Socialist Russia will come from NEP.” —Lenin

discontent. The Party’s response was to allow small-scale private enterprises and food production, a policy known as the New Economic Policy, or NEP.

But the NEP was brutally destroyed by Stalin after his consolidation of power after Lenin’s death, with the program declared finished in 1928.

In 1959, when Fidel Castro’s revolutionary took control of the Cuban government, both of the world’s leading self-declared communist states were still in the throes of Stalinist central control, though Nikita Khrushchev had loosened the reins a bit in the Soviet Union.

Castro, financially supported by the Soviets, adopted a modified version of the Moscow system, which was maintained trough the collapse of the Soviet system, then modified creatively and by necessity when the flow of Soviet cash and oil evaporated — leading to, among other things, the world’s most productive system of urban agriculture.

Cuban adapted and endured, and despite the decades-long economic embargo by the United States and a ban on U.S. tourism — once an economic mainstay of the island nation.

Now Cuba is embarking on what might be described as its own version of the NEP, most notably in agriculture.

Now the Cuban experiment is treated to coverage by only major international power claiming the communist mantle, China — which has traveled much farther down the market economy road than Cuba.

Here’s the coverage by CCTV’s Americas Now:

Cuba Shifting from State-Operated Establishments to Private Co-Ops

The program notes:

In 1968, Cuba nationalized its businesses, adopting a Soviet style system that had all enterprise controlled by the state. CCTV correspondent Michael Voss finds that conditions appear to be changing.

We love that 1951 Chevrolet driving by the food co-op manager, an amazing testament both to the durability of Detroit’s vintage iron and to the spirit of the Cuba people in keeping it running for the last 62 years.