Monthly Archives: January 2017

Trump will not be drawn by neo-conservatives

In a sign that Donald Trump will not be drawn into another neo-conservative nightmare, two of his most powerful supporters, Robert Mercer and his daughter Rebekah, are being frozen out of future Trump organisations. They had been pushing John Bolton as Secretary of State, and then after Rex Tillerson became Trump’s appointee, they pushed for him as number two.

 

Watershed al-Jazeera documentary on the Israeli lobby in Britain

The al-Jazeera documentary based on recordings made by an undercover operative working with the Labour Friends of Israel laid bare the machinations surrounding the bogus Anti-Semitism allegations against Jeremy Corbyn and more generally the aggressive and direct methods used by the Israeli Embassy to get results favourable to Israel in British political decision-making by whatever means.

Although this merely confirms everybody’s suspicions about how Israel operates, and therefore hasn’t generated the level of outrage that similar behaviour on the part of a different foreign country would have, the very fact of getting all this down on tape has subtly changed the landscape. The very fact that there is a fight back against the decades of continuous ‘post-truth’ manipulation of British public opinion, is finally denying propagandists for Israel the easy ride they have enjoyed all these years. See the 4 part documentary below:

Part 4: The Takedown; Part 3: The Anti-Semitism battle; Part 2: The Training session; Part 1: Young Friends of Israel

Trump’s poor grasp of economic reality, and the prospective failure of his economic populism

There are three factors that will ultimately make Trump economics an event limited in time that will add to Central Bank debt and be followed by crisis and stagflation:

  1. His tax cuts mean that Trump will have to rely on monetary expansion. The Fed’s Jan 19 announcement of rising interests rates to bring sanity back to the capital markets, will conflict with the need to fund expenditures through tax credits as seems to be the plan. The whole thing relies on a replay of the old Reagan-Thatcher ‘trickle-down’ nonsense, which has been thoroughly discredited. As Ha-Joon Chang has explained, Western economies are undermining productivity by massively scaling back welfare while reducing purchasing power by squeezing wages.
  2. Falling unemployment figures under Obama, which have been used to show us a successful neoliberal trajectory to have hidden a dark truth. Although I list Joseph Stiglitz’s articles on Trump economics below because he talks a lot of sense about upcoming problems, his statement that Trump inherits a vibrant economy from Obama is wrong. The reason that trump has come to power is that the mass of the population is desperate and tired out. So Trumpist antiwelfarism will add insult to an already massive injury.
  3. Trump idea that he can bring jobs back to the US has to face technological realities. The industrial landscape has changed fundamentally, and both Stiglitz and Gwynne Dyer write eloquently about these difficulties. Trump economics cannot, given the political and economic structures in place at the moment, drive money into the hands of the middle classes: it is merely continue, if not accelerate the transfer of wealth to the top.  Unless Trump suddenly becomes a ‘national socialist’, his project will founder.

Joseph Stiglitz writes:

The only way Trump will square his promises of higher infrastructure and defense spending with large tax cuts and deficit reduction is a heavy dose of what used to be called voodoo economics. Decades of “cutting the fat” in government has left little to cut: federal government employment as a percentage of the population is lower today than it was in the era of small government under President Ronald Reagan some 30 years ago.

the increase in infrastructure spending is likely to be accomplished through tax credits, which will help hedge funds, but not America’s balance sheet: such programs’ long track record shows that they deliver little value for money. The cost to the public will be especially high in an era when the government can borrow at near-zero interest rates. If these private-public partnerships are like those elsewhere, the government will assume the risks, and the hedge funds will assume the profits.

The debate just eight years ago about “shovel-ready” infrastructure seems to be a distant memory. If Trump chooses shovel-ready projects, the long-term impact on productivity will be minimal; if he chooses real infrastructure, the short-term impact on economic growth will be minimal. And back-loaded stimulus has its own problems, unless it is managed extremely carefully.

Read full article here

Gwynne Dyer writes:

Neither Donald Trump nor his new appointment of Andrew Puzder as Secretary of Labor understands the significance of their forthcoming collaboration.

Puzder bears a large part of the responsibility for fulfilling Trump’s election promise to “bring back” America’s lost industrial jobs: seven million in the past 35 years. That’s what created the Rust Belt and the popular anger that put Trump in power. But Puzder is a fast-food magnate who got rich by shrinking his costs, and he has never met a computer he didn’t like.

He tells us: “They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age-, sex-, or race-discrimination case”.

But it isn’t evil foreigners who “stole” seven million jobs, and will probably eliminate up to 50 million more in the next 20 years. It’s the robots and computers that Puzder is so fond of. As automation moves up the skill sets, self-driving cars will annihilate another four million jobs. A 2013 study concluded that 47 percent of existing jobs in the United States are vulnerable to automation in the next 20 years, and the numbers are as bad or worse for the other developed countries.

This is what is really driving the “populist revolution” that caused two of the world’s oldest democracies to make bizarre, self-harming political choices in the past year. First Brexit, then Trump. Neo-fascism looms as we fear  a re-run of the 1930s. Economic growth has slowed since the crash of 2008, and unemployment is much higher than it looks. The official US unemployment figure is only 5 percent, but almost one-third of American men between the ages of 25 and 54 are “economically inactive.” So angry populist leaders are popping up again all across the developed world.

The “Dirty Thirties” ended in the Second World War, and there are obvious parallels today. TheEU is fraying at the edges, and Donald Trump has talked about curtailing US support for NATO. He has also threatened to slap huge tariffs on Chinese exports to the US, and it’s probably a bad idea to push China too hard when it is already in grave economic trouble.

But this is not the 1930s. There are no ranting dictators promising revenge for lost wars, and government benefits mean that unemployment is no longer a catastrophe for most people in Western countries. The old white working class (and some of the middle class) are angry because jobs are disappearing and because immigration is changing the ethnic balance in their countries, but they are not angry enough to want a war.

Trump’s election means that we are in for a wild ride in the next four years, but he will ultimately disappoint his supporters because he is barking up the wrong tree. He cannot bring back the jobs that were lost, because most of them were not lost to his favorite culprits: Free trade and uncontrolled immigration. Even if Trump understood this, he could not admit it in public, because there is nothing he can do about it.

Read full article here. Dyer’s article reiterates some of Joseph Stiglitz’s earlier warnings.

 

Kerry’s speech and the vanishing mirage of the two state solution

The two state solution was a figment of the Western mind conjured up and carefully maintained to assuage its conscience about the Frankenstein monster it has created and nurtured in the Middle East these past 65 years. Kerry’s speech on UNSC Resolution 2334 has set out the stark fact that Israel can no longer be considered a democratic state, even in the delusory ruminations of Western politicians.

That’s fine in the sense that it is in tune with the new neo-fascist zeitgeist and incoming Trumpism.  What’s not fine is that the aggressive reaction of Israel to this clearing of the air is laying the ground for a new regional and international counter-reaction and a new conflict, the sparks of which the incoming Trump administration seem dead set to fan into all-consuming flames.

Bush Jr brought us Iraq, Obama Syria and now Trump, Israel-Iran: a new a deadlier conflict for 2017 for which Iran is preparing with deadly seriousness. UNSC Resolution 2334 is a kind of ‘non est mea culpa‘ from a dying liberal internationalist ideology, which is – if you consider the wording of the resolution carefully – entirely absorbed with the past:

The Security Council,
Reaffirming its relevant resolutions . . . Guided by the purposes and principles of the Charter of the United Nations, and reaffirming, inter alia, the inadmissibility of the acquisition of territory by force, . . .
Condemning all measures aimed at altering the demographic composition, character and status of the Palestinian Territory occupied since 1967, including East Jerusalem . . . .
Expressing grave concern that continuing Israeli settlement activities are dangerously imperilling the viability of the two-State solution based on the 1967 lines, . . .
Recalling also the obligation . . .  for the Palestinian Authority Security Forces to maintain effective operations aimed at confronting all those engaged in terror and dismantling terrorist capabilities, including the confiscation of illegal weapons,
Condemning all acts of violence against civilians, including acts of terror, as well as all acts of provocation, incitement and destruction,
Reiterating its vision of a region where two democratic States, Israel and Palestine, live side by side in peace within secure and recognized borders . . .
1. Reaffirms that the establishment by Israel of settlements in the Palestinian territory occupied since 1967, including East Jerusalem, . . . constitutes a flagrant violation under international law . . .
2. Reiterates its demand that Israel immediately and completely cease all settlement activities in the occupied Palestinian territory. . .
3. Underlines that it will not recognize any changes to the 4 June 1967 lines, including with regard to Jerusalem, other than those agreed by the parties through negotiations;
4. Stresses that the cessation of all Israeli settlement activities is essential for salvaging the two-State solution . . .;
5. Calls upon all States . . .  to distinguish, in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967;
6. Calls for immediate steps to prevent all acts of violence against civilians, including acts of terror, as well as all acts of provocation and destruction, calls for accountability in this regard, and . . . for the strengthening of ongoing efforts to combat terrorism, including through existing security coordination, and to clearly condemn all acts of terrorism;
7. Calls upon both parties to act on the basis of international law, . . .  to observe calm and restraint, and to refrain from provocative actions, incitement and inflammatory rhetoric, with the aim, inter alia, of de-escalating the situation on the ground, rebuilding trust and confidence, demonstrating through policies and actions a genuine commitment to the two-State solution, and creating the conditions necessary for promoting peace;
8. Calls upon all parties to . . .  launch credible negotiations on all final status issues in the Middle East peace process . . . ;
9. Urges . . . the intensification and acceleration of international and regional diplomatic efforts and support aimed at achieving, without delay a comprehensive, just and lasting peace in the Middle East on the basis of the relevant United Nations resolutions . . . and an end to the Israeli occupation that began in 1967; and underscores in this regard the importance of the ongoing efforts to advance the Arab Peace Initiative, the initiative of France for the convening of an international peace conference, the recent efforts of the Quartet, as well as the efforts of Egypt and the Russian Federation;
10. Confirms its determination to support the parties throughout the negotiations and in the implementation of an agreement;
11. Reaffirms its determination to examine practical ways and means to secure the full implementation of its relevant resolutions; . . . .
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