Tuesday, January 31, 2012

Layer 511 . . . Taxing Wealth, Fear of Taxes, US Elections, Global Apocalypse, Carl Jung and Data Pool 3

The thing is, politics is far too important to be left to politicians. That's why we need public intellectuals, capable analysts, and great writers & journalists. And we need the Guardian to give them a creative platform. Here's a selection of what was in the paper yesterday.

[It might seem like dull, dutiful, hard work sometimes to keep up with what's happening in the world, but in times of crisis and change we all have a public duty to pay attention, and to work hard if necessary at knowing what's going on. Otherwise we lose the right to complain when we don't like what's done to us.]
Mysteries of Data Pool 3 give Rupert Murdoch a whole new headache
The arrest of four Sun journalists threatens to open a fresh phase of the scandal surrounding News International
by Nick Davies

On Saturday morning, the police arrested four journalists who have worked for Rupert Murdoch. For a while, it looked as though these were yet more arrests of people related to the News of the World but then it became clear that this was something much more significant.
This may be the moment when the scandal that closed the NoW finally started to pose a potential threat to at least one of Murdoch's three other UK newspaper titles: the Sun, the Times and the Sunday Times.
The four men arrested on Saturday are not linked to the NoW. They come from the Sun, from the top of the tree – the current head of news and his crime editor, the former managing editor and deputy editor.
Taxing wealth? The public mood still escapes the Tories
Ed Miliband's task is to point out where the blame really lies for unfairness in the system
by Polly Toynbee
The Hester bonus retreat marks a seismic political moment, a point of no return. How long it has taken, how slow Westminster has been to respond to public outrage since the crash – but Labour has seized the moment.
Labour's call for a tax on bank bonuses gains real traction as boardroom kleptocracy finally breaks through the political sound barrier. Despite poll after poll showing disgust at top pay, the issue has been ignored at Westminster and was invisible at the last election. Hester's failure to respond in time to public outrage has lit the blue touch-paper. Uncharacteristically, David Cameron missed the public mood, so he looks both weak and in hock to a City that bankrolls his party. Each new bonus announcement will skewer him again and again – one RBS trader gets £4m and on Friday, Barclays' Bob Diamond will swipe £10m: no Cameron nudging is likely to shift his sod-you-all attitude.
Hester has handed Labour the tin-opener to the whole can of worms over boardroom pay. Research from Professor Karel Williams at Manchester University's Cresc shows how far soaring executive pay is unrelated to performance, but how closely related it is to the tiny pool of people sitting on boards, similar earners rubber-stamping one another's ever-rising pay. There is, Williams says, "a very weak link between pay and performance". Most employees know that performance-related pay is largely a chimera: gamed by managers, resented by staff, it corrodes into custom and practice. Let this end the bonus and incentives fallacy in every sphere.
Why are deficit-cutters so afraid to talk about tax?
Reducing public spending is not the only way of balancing the budget, but taxation seems to be taboo for politicians
By Mehdi Hasan
 'I like paying taxes," the US supreme court Justice Oliver Wendell Holmes once remarked, "with them I buy civilisation." As hundreds of thousands of self-assessment taxpayers frantically file their returns to Her Majesty's Revenue and Customs, ahead of 31 January's looming deadline, the late judge's words are worth bearing in mind.
We need to talk about tax. I won't pretend I like paying taxes. I don't. But I agree with the argument that it is taxation that helps civilise our society. Tax revenues fund high-quality public services, the welfare state, our national defence and much-needed infrastructure projects. Progressive taxation of income keeps inequality in check, by redistributing from the rich to the rest.
But taxation also goes to the heart of the current debate over the deficit. In his new and aptly titled Compass pamphlet, White Flag Labour, economist Howard Reed points out that "there are two ways to close a fiscal deficit when the economy is operating at full potential – one is to cut spending, the other is to raise taxes" yet deficit hawks assume that "cutting spending is always and everywhere the preferred route to fiscal balance, rather than raising more revenue via the tax system".
Fiscal policy has been reduced to a sterile debate over public spending in recent years. Our political elites act almost as if taxation doesn't exist. Defending Labour's recent tilt towards cuts, Ed Miliband proclaimed in a speech on 10 January that "the next prime minister will still have a deficit to reduce, and will not have money to spend". Really? Why can't said deficit be reduced through additional tax revenues?
The phrase "deficit reduction" has become a convenient euphemism for cutting public expenditure. It shouldn't surprise us. The biggest myth in British politics is that government borrowing spiralled out of control because of overspending; our record budget deficit, say the Tories and their Lib Dem mini-mes, is the inevitable consequence of Labour profligacy.
It cannot be said often enough: the deficit was caused not by rises in public spending but by a collapse in tax revenues. For example, by 2009-10, the Treasury had received around £112bn less in tax revenues than it had expected to. As Channel 4's FactCheck website decisively concluded earlier this month, "the drop in tax receipts triggered by the economic crisis is what's behind the bulk of the £149bn deficit".
Poll after poll shows overwhelming public support for a tax on bankers' bonuses; a mansion tax on multimillion-pound properties; a windfall levy on the oil and utility companies; a Robin Hood tax on financial transactions; and a one-off wealth tax of 20% on the richest 10% of households (which would raise a whopping £800bn and, according to YouGov, is backed by three out of four voters).
Increasing taxes on the rich to help reduce the deficit isn't "class warfare", as President Obama belatedly argued in his state of the union address last week: it is "common sense". If our leaders want us to believe that they are serious about the deficit, then they have to lift their self-imposed taboo on discussing tax.
The time has come to say the politically unsayable: it is wrong to pretend that cutting spending is the only, best or main method of eliminating the deficit. It isn't. In the long run, once the economy is off its knees and growing again, we need to make much greater use of taxation to balance the budget. Perhaps we can update Justice Holmes's mantra for our age of austerity: I like paying taxes, with them I pay down the deficit.

US elections: no matter who you vote for, money always wins
Dollars play a decisive role in US politics. And more so since the supreme court allowed unlimited campaign contributions
by Gary Younge
Republican presidential debates are not for the faint-hearted. 
Given the general state of the Republican party . . . truth and facts are but two options among many. The party's base, overrun by birthers, climate change deniers and creationists, floats its warped theories and every now and then one makes it to the top and bobs out into the airwaves.
 It is difficult to think of anywhere else in the western world where these debates would have any credibility outside of a fringe party (even if the fringes in Europe are now spreading). Far from indicating America's exceptionalism, it looks more like an awful parody of the stereotypes most outsiders already believed about American politics at its most bizarre. "Those who follow this race daily may have long since lost perspective on how absurd it is," said the German magazine Der Spiegel last week. "Each candidate loves Israel. They all love Ronald Reagan. Each loves his wife, a born first lady, for a number of reasons."
The good news is, with the exception of Perry's demise, the debates have not been pivotal. The bad news is that the truly decisive element has been something even more insidious: money. Lots of it.
The issue here is not class envy, hating rich people because they are rich, but class interests – cementing the advantages of the privileged over the rest. The problem is not personal, it's systemic. In the current climate, it means a group of wealthy people in business will decide which wealthy people in Congress they would like to tell poor people what they can't have because times are hard. And unless the ruling is overturned there is precious little that can be done about it.
Downplaying money's central role at this point merely buys into the illusion of participatory democracy, where ideas, character and strategy are paramount, while others are actually buying the candidates and access to power. The result is a charade. Fig leaf, G-string – name the scanty underwear of your choice. The emperor is butt naked. Whoever you vote for, the money gets in.
"Truth and facts are but two options amonst many."
Great line, and one which is borne out every day here on Cif by the more mendacious right-wingers.
It's difficult to believe that, four years after a financial crisis created by widespread corruption and fraud by banks, not a single person has been jailed either in the US or the UK for perpetuating this fraud.
It's even more difficult to believe that this crisis has been exploited by right-wingers and free market zealots to make the case for a shrinking of the state and greater deregulation in the interests of those who clearly cannot be trusted to regulate themselves.
The neoliberal zealots, for whom truth and facts are simply options, shout down those who call for regulation and controls on irresponsible markets as socialists who will usher us all into the Gulag.
They will have missed the Newsweek report this week which found that there are 6 million people in the US either incarcerated or under some form of criminal supervision.
Newsweek helpfully pointed out that the figure of 6 million, in the Land of the Free, exceeded the total number of people imprisoned or under state supervision in the Soviet Union in the worst years of Stalinist repression.
Meanwhile, there are $18trillion sitting in offshore tax havens, a figure which exceeds the combined debt of the OECD economies.
The truth and the facts show that there is no justification for austerity.
Austerity is simply a policy choice for neoliberals who care more for their own selfish interests than they do for truth and facts.

Davos policymakers are playing Global Apocalypse – and running out of lives
If the world economy was a video game, the central bankers and politicians have been struggling to master the controls – and remain stuck on the first level
By Larry Elliott
Policymakers have put the question of global rebalancing into a box labelled "too hard to deal with", and have been dilatory in sorting out the problems of their financial sectors. Instead, whether through a misguided belief in financial orthodoxy or a fear of the bond markets, they have concentrated on heavy-handed and blanket austerity, something that should have come at the very end of the game.
The result has been sluggish growth in the west because every element of growth – public expenditure, consumer spending and investment – has been choked off simultaneously. If government is to retrench without causing recession, private demand has to rise, but the squeeze on real incomes and a reluctance to invest means this is not happening. The result is an unbalanced global economy, drifting towards a double-dip recession (in the west at least), a dysfunctional financial system and – a new ingredient in the toxic mix – a deeply disaffected public.
Christine Lagarde, the International Monetary Fund's managing director, spent last week rattling the tin in the hope of getting contributions for a $2 trillion (£1.3tn) war chest. European policymakers were trying to put the finishing touches to a Greek debt deal. Draghi made it clear that providing liquidity to Europe's banks would not be enough on its own to bring an end to the crisis.
What does it mean? It means that blanket austerity is not working, and. It means that what was originally a global response to a global crisis has become a series of national responses to national crises. It means that Europe is treating a three-dimensional problem (growth, banks, public finances) with a one-dimensional fix of deficit reduction. It means that the global economy is still struggling to get beyond level one of Global Apocalypse. And if policymakers don't start showing a bit more skill, it will soon be Game Over and time to play Global Apocalypse 2.
This could be Carl Jung's century
The psychoanalyst saw himself as a sort of therapist for western culture, and his diagnosis of its ills resonates today
by Andrew Samuels
If the last century has been called "the Freudian century", there are reasons for thinking that this one could be Jung's. His time does seem to have come.
He had a much more positive view of the human psyche and unconscious than Freud. For Jung, the unconscious is not only full of wild and destructive drives; it is also the source of creativity, spirituality and the capacity for relationships.
What Jung saw in western culture is very familiar to what its contemporary critics perceive. He despaired of the over-rational one-sidedness of western culture, the way it has got cut off from nature (Jung is the pioneer of what is now called ecopsychology). He hit out at the materialism and loss of individuality in our world, focused on the mind-body split, on mechanical approaches to sex, and the west's loss of a sense of existential and spiritual purpose and meaning. 

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