The vile bastard Blair has a new book in the shops from today - yet again claiming that New Labour was 100% correct in all its policies and decisions.
Tony Blair on Gordon Brown: 'Analytical intelligence, absolutely. Emotional intelligence, zero'
Tony Blair writes in his memoir that Gordon Brown 'lacked political instinct at the human gut level'
The words black, pot and kettle come to mind, and not just because the eponymous Martin is the author of this piece.
Yesterday Polly Toynbee wrote another excellent column:
Labour's vain, venal has-beens should bow out and shut up
They just can't stop themselves, yesteryear headline addicts, locked in the old quarrels, oozing sectarian malice to their last gasp.
Mandelson's book has been an occasion to reflect on the damage he has done to Labour over the years . . .
Mandelson's sole historic quote – being "intensely relaxed about people getting filthy rich" – became lethally emblematic of New Labour's infatuation with super-money.
Power and money sent their compasses spinning, Blunkett and others were seduced too, so many of the Blair entourage now retired to . . . worlds of lucre.
How could Mandelson be a Labour person, yet spend his leisure hours with tax-exile Tory bankers or powerful Tory society hostesses, Labour's natural enemies? Choosing such friends debased politics – was it just a day job like any other, forgotten in the evenings or on holiday, not a conviction or a way of life? No wonder voters turn cynical if all the party tribalism, the ideology, the fury and passion was only play-acting after all . . .
Why never raise tax on the richest, as boardroom pay rose by 30% a year and bankers' bonuses soared? How did a Labour government let inequality slip backwards in those golden years?
Had Blair taken the Jimmy Carter ascetic route, devoting himself to good works, keeping no more than his sizable pension, he could have done himself and Labour honour. Neither Miliband is tainted with money fascination, but both need to recognise how much of that past needs vocal rejection.
Heterodox economics refers to the approaches, or schools of economic thought, that are considered outside of mainstream, that is, orthodox economics. Heterodox economics is an umbrella term used to cover various separate unorthodox approaches, schools, or traditions. These include institutional, post-Keynesian, socialist, Marxian, feminist, Austrian, ecological, and social economics among others. These views may be contrasted with the framework used by the majority of economists, commonly referred to by its supporters as mainstream and by critics as orthodox or conventional.
Sorry about that. Bear with me.
Ha-Joon Chang (Korean: 장하준, Hanja: 張夏准, b. South Korea in 1963) is one of the leading heterodox economists specialising in development economics. Currently a Reader in the Political Economy of Development at the University of Cambridge, Chang is the author of several influential policy books . . . Wikipedia
Ok - I'll get to the point. Dr Chang has a semi-regular column in the Guardian, and it's well worth reading. Oxzen proposes that anyone who has a vote and who could therefore influence the outcome of the next election has a duty to inform themselves about economics and finance. I'll come to P.J.O'Rourke and his book 'Eat The Rich' later.
In his book Kicking Away the Ladder (which won the European Association for Evolutionary Political Economy's 2003 Gunnar Myrdal Prize), Chang argued that all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing similarly. The World Trade Organisation, World Bank and IMF come in for strong criticism for this kind of ladder-kicking which is, according to Chang, the fundamental obstacle to poverty alleviation in the developing world . . . - Wikipedia
Following up on the ideas of Kicking Away the Ladder, Chang published Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism in December 2008. Chang argues that unregulated international trade (free markets) has very rarely succeeded in producing economic development, and has a far worse record compared to interventionist policies. He cites evidence that GDP growth in developing countries was higher prior to external pressures recommending deregulation and extends his analysis of the failures of free trade to induce growth through privatisation and anti-inflationary policies. Chang's book won plaudits from Nobel prize-winning economist Joseph Stiglitz. - Wikipedia
Dr Chang's latest book is called 23 Things They Don't Tell You About Capitalism.
We lost sight of fairness in the false promise of wealth
Acceptance of inequality rests on assumptions that 'free markets' make us all richer in the end. Growth figures tell it differently
Debates about inequality show no sign of going away. But the moral arguments are rarely extended far enough . . .
Virtually no politician challenges a basic, erroneous premise that inequality is a price worth paying for a more efficient market system that enriches us all.
The simplistic, free-market view of the Thatcher-Major era said equality of opportunity is all we need for a fair society.
If no one had their market participation blocked . . . the result should be accepted as fair. Today many people, both on the left and the right, recognise that this is not enough. We can accept the outcome of a competitive process as fair only when the participants have equality in basic capabilities; the fact that no one is allowed to have a head start does not make the race fair if some contestants have only one leg.
Children who do not have some minimum level of nutrition, healthcare, and education cannot grow into fully capable adults. The Sure Start programme of the last Labour government and the coalition's pupil premium are based on recognition of this fact, although neither are of sufficient scale and depth to make a fundamental difference.
If we accept children should not be penalised for things beyond their control, shouldn't we accept the same for adults? Most people become unemployed through events such as a financial crisis. And yet, despite that, we insist on punishing the unemployed.
But even giving adult workers second chances does not take us far enough towards a fairer society. We have to question an assumption that has dominated economic thinking over the last three decades – namely, the belief that maximising market freedom is the best way to generate wealth.
From this assumption came the argument that even committed egalitarians should let markets rip, because that would give them the maximum wealth to redistribute. In Britain, the natural "progressive" conclusion was the New Labour strategy that you regulate the City as little as possible because that will maximise the wealth it generates, which means more money for equality-enhancing programmes like Sure Start.
Sadly that assumption has been proved wrong. After three decades of deregulation and tax cuts for the rich, growth has slowed down, rather than accelerated, in almost all countries. The world economy, which was growing at about 3% in per capita terms in the "bad old days" of widespread regulation and punitive taxation for the rich in the 1960s and 70s, has grown at about half that rate in the last three decades. In Britain, average annual per capita income growth rate was 2.4% in the 60s and the 70s, when the country was allegedly suffering from the "British disease"; but it fell to 1.7% during 1990 to 2009, after it is supposed to have been cured of the disease thanks to Margaret Thatcher's heroic struggle in the 1980s.
At the heart of this slowdown lies the free-market policy package. In developing countries it has led to breakneck liberalisation of trade, so destroying swaths of "infant" industries. In both developing and developed countries, policies to reduce inflation to very low levels have choked demand and made business loans expensive. And in Britain and the US, financial deregulation has played a crucial role in reducing growth.
Unleashing finance has enormously increased the power of mobile shareholders in pursuit of short-term profits and high dividends. The surest way to deliver these is to minimise long-term investments, such as machinery and research and development. Shareholders have encouraged such behaviour by paying astronomical salaries to managers good at making such cuts, even though they weaken the growth prospect of companies in the long run. Those shareholders don't necessarily care about the long-term future of their companies: they can always sell their shares.
If we cannot assume free-market policies to be the best at generating wealth, the British debate on equality needs a total rethink. We have to debate what our macroeconomic, industrial, financial, or even executive pay policies should be, as their exact shapes significantly affect the scale of wealth that markets create. It cannot be blithely assumed that markets know how to maximise wealth – while all we have to worry about is how to redistribute it through taxes and benefits.
P.J. O'Rourke's book, 'Eat The Rich', is subtitled 'A Treatise On Economics'. It's been sitting unread on my shelf for about 10 years - since I picked it up in the Greenwich cheapo bookshop. PJ used to write for Rolling Stone. Good. He's known as something of a humourist and satirist. Good
O'Rourke was an early proponent of Gonzo journalism. He is considered a libertarian, and is often quoted by libertarian and anti-socialist writers and pundits. During his student days he was a left-leaning hippie, but in the 1970s his political views underwent a volte-face. He emerged as a political observer and humorist with libertarian viewpoints. O'Rourke is well known for his combination of conservative economic views and libertarian views on vice such as sex and drugs. http://en.wikipedia.org/wiki/P._J._O%27Rourke
Not Good, on the whole. (Vice = sex? Sex = vice?)
The reason I've been avoiding this book is because O'Rourke is a smartarse, though nowhere near as smart as he thinks he is. He's a gadfly, a maverick, a jester - but ultimately a conservative stooge who would like to be taken seriously as a social, political and cultural commentator. So why buy the book? Mmmmmm. Important to know your enemy?
Eat The Rich was written in 1997 - just as New Labour were taking power. Capitalism and globalisation were in their pomp - socialism and social democracy were assumed to be defeated and defunct as political forces - especially by New Labour, who of course continued with the Friedman/Hayek/Chicago-School/Thatcher concensus - deregulation, privatisation, promotion of banking and financial 'services', de-industrialisation, etc.
O'Rourke recommended that we read, amongst other neo-conservative tracts, Friedman's books, Free To Choose and Capitalism. He goes on to say in his introduction, "The purpose of this book is to make some broad points about economics, freedom, and responsibility. If the reader examines my work too carefully he may discover I'm only a journalist. This means that when it comes to knowing what I'm talking about, I'm no different from the next person. I just get paid for the talking."
Too damned right.
The book was written as a triumphalist love letter to capitalism and globalisation. Obviously the man knows his market, and there were probably thousands who could be tempted to buy the funnyman's book at its full price. But this was way before the Big Bust, the Financial Crash - before capitalism screwed itself and needed to plead with sympathetic governments to give them lots of free money so that the whole system didn't completely crash and burn and fuck everyone on the planet.
Chapter 2 is called Good Capitalism: Wall Street (!). Chapter 3 is called Bad Capitalism: Albania.
Now here's the funny bit - the really hilarious bit. He says that capitalism works well on Wall Street because it's properly regulated! He goes on to say that capitalism doesn't work in Albania because it's corrupt and was based on an enormous Ponzi scheme!
So let's hear it for Lehman Brothers, AIG, Fanny Mae, Freddie Mac, Northern Rock, RBS, the sub-prime mortgage scandal, the property bubble, and the biggest Ponzi schemer of them all, Bernie Madoff!!!
Bernard Lawrence "Bernie" Madoff is an incarcerated former American stock broker, investment adviser, non-executive chairman of the NASDAQ stock market, and the admitted operator of what has been described as the largest Ponzi scheme in history.
In March 2009, Madoff pleaded guilty to 11 federal crimes and admitted to turning his wealth management business into a massive Ponzi scheme that defrauded thousands of investors of billions of dollars. Madoff said he began the Ponzi scheme in the early 1990s. However, federal investigators believe the fraud began as early as the 1980s, and that the investment operation may never have been legitimate. The amount missing from client accounts, including fabricated gains, was almost $65 billion. The court-appointed trustee estimated actual losses to investors of $18 billion. On June 29, 2009, he was sentenced to 150 years in prison, the maximum allowed.
He was charged with securities fraud, investment advisor fraud, mail fraud, wire fraud, money laundering, false statements, perjury, making false filings with the SEC and theft from an employee benefit plan.
Are we to assume that the rest of Wall Street, and the City of London, was squeaky clean?
Here's what O'Rourke had to say in 1997:
"Albania shows what happens to a free market when there is no legal, political, or traditional framework to define freedoms and protect market places . . . Capitalism conducted in a condition of anarchy produces some unpredictable phenomena. Albania has the distinction of being the only country ever destroyed by a chain letter - a nation devastated by a Ponzi racket, a land ruined by a pyramid scheme."
Not any more it doesn't, PJ. Not any more.
Which is to say, America, Britain and others WOULD HAVE BEEN RUINED had their governments, in the name of their people, not agreed that the banks etc were TOO BIG TO FAIL and handed them billions of OUR money - to do whatever they liked with, unfettered by any further regulations, agreements and promises. Of course there were better solutions to the crisis, such as wholesale nationalisation without compensation, which is what the banks and the bankers deserved, and what the country needed. But we couldn't possibly let CAPITALISM fail, could we? So in the event we only part-nationalised the poor basket cases that couldn't even have saved themselves even if they'd been given lots of free money - on account of holding too much toxic debt.
Of course many of our 'ordinary' people have had their lives ruined and devastated - but what the hell. At least the bankers and the fat cats were OK, even if some of them saw their assets decline in value. Let's face facts - most of the billions of dollars and pounds that were handed to Bernie Madoff and his ilk were really just the spare change of the greedy and the seriously rich. The idea of the rich fleecing those who are even richer is hardly novel. "Let the buyer beware" is the maxim of the market. No wonder Bernie didn't consider himself a bad guy.
A few more quotes to conclude:
"The Albanians didn't believe they were the victims of a scam. They believed they were the perpetrators - this being so different from the beliefs of certain Wall Street bull-market investors in the United States."
"International politicians are crowing about the free-market victories they've achieved . . .
Laissez-faire . . . seems to have displaced central planning, nationalisation, democratic socialism . . .
Stocks are only one way to bliss out with money. The bond market is also huge. Then there are commodities, derivatives, money-market instruments, and just plain money itself. More than $1 trillion of international currency changes hands every day.
You remember how in 1995 a semieducated young wanker in Singapore, fiddling with derivatives, brought England's noble, ancient Barings Bank to its knees . . . "
Indeed we do.
"The investment industry creates euphoria and panic. It moves astonishing amounts of cash around the world at startling speed with shocking results."
If only he knew then just how shocking.
"Then it pays itself fantastic amounts of money."
"Is the investment industry just a bunch of pirates in neckties?"
Do bears shit in the woods?
"Why do we put up with this? The whole business of international finance is dumbfounding. This shit-shower of money flying around the world . . . What's in it for us? Why don't we rise up? Why don't we get rid of the capitalist system and replace it with something that's nicer and more predictable, and gives everybody an even break? What does the investment industry give to society?
"Liquidity," said the $2 billion money manager, the investment banker and the specialist broker.
If we're going to have freedom and the money to enjoy it, we're going to have to put up with the stuff in this chapter . . .
There are alternatives to the free market. Congress could pass stricter investment-industry regulations, more orders and directives . . .
But we wouldn't want that, now would we?
Wall Street's free-market capitalism is doubtless a wonderful thing and a boon to humanity, but it scares me . . . Capitalism scared me despite the fact that I was seeing it operate within a well-defined set of rules (!!) understood by all the players. And I liked the players . . .
But I was still scared.
Free-market capitalism was terrifying under the best circumstances. What it was like under the worst circumstance I couldn't imagine.(!!) And because I couldn't imagine it, I needed to go someplace that had no rules and was full of crooks.(!!) I considered Washington D.C., but Albania looked like more fun . . .
Fun!!! As Bush W apparently said - as the 'markets' were crashing and the banks were going bust, and the entire system seemed to be going belly up - "This sucker could go down!" How much fun was that, PJ? You smug, smartass, complacent, triumphalist fucking idiot. Scared indeed. You ought to be fucking terrified.
I wonder how often he recommends reading Milton Friedman these days.
For the record, a property bubble IS a Ponzi scheme. I thought we'd realised that after the previous property crash, back in the late 80s . . .
You can only make money out of buying and selling property if you can convince people that a) they 'need' to get on the 'property ladder', and b) your property is worth more than you paid for it. If on the other hand, someone thinks your property is about to be washed away in a flood, or flattened by an earthquake, or your neighbourhood is about to be taken over by gangsters and drug addicts, or if no-one can borrow money or get a mortgage any more, then your property is likely to be worth precisely nothing. Or nothing like the amount you paid for it . . .
Part 2. And now for something completely different . . .
Time to lighten up - and it's Zappa time, together with Captain Beefheart - http://www.youtube.com/watch?v=MVUgQEnxC0g