Friday, April 17, 2015

What the Greek Crisis Might Reveal about Global Capitalism

Writing under the pseudonym Tyler Durden (Fight Club fans will recognize that name), the primary author at Zero Hedge has offered an interesting perspective on what the brutally realistic options are for the newly elected Syriza leaders, if the party is to represent the democratic aspirations of the Greek people.  Durden places emphasis on the complexity of the current situation and posits, rightly I think, that the Greek people have yet to be presented with a clear picture of what a Euro-member austerity world looks like, compared with a Euro-Exit world.

Zero Hedge offers an insiders view of financial markets and is written by Wall Street traders, under pseudonym, to protect their identities.  What I find most interesting is that Durden’s analysis is very similar to that of Marxian Economists such as Leon Panich, who have been studying Greece closely and in some cases advising the new Syriza government.

Durden leaves us with his strongly held opinion that Greece will exit the Eurozone financial system. While it is not yet clear that this is a certainty, the inflexible and condescending postures of the IMF and German Finance Minister seem to be pushing Greece closer to the “Grexit” scenario.

The fact that Greece had been ruled by a handful of plutocrat families, who for years were the primary beneficiaries of IMF and Eurozone policies - avoiding taxes and reaping the benefits of debt schemes - seems to have been forgotten.  The moral logic of standard IMF policy is being unwaveringly adhered to in Europe with Germany acting as the moral and fiduciary guardian.

If Marx’s insights gave us nothing else, it is this: there is social cost and social value in all relations, commerce or otherwise.  Neoclassical Capitalism has always struggled with this truth, which never seems to fit into its analytical models.  As we once again watch the failure of market economics put profits into the pockets of elites while passing their massive, accumulated debts on to working people, we have to take measure of the human cost. 


The Syriza leadership seems to be yelling these humane principles into an echo chamber as the EU finance elites talk past them.  The only thing that seems certain now is that whichever decision is taken it will have profound consequences.

Paranoia, Uncomfortable Facts and Elusive Peace

In their 2007 book, the The Sphinx of Tehran, Yossi Melman and Meir Javedanfar built a narrative around the theory, supported by Israeli intelligence given to Melman, that Iranian President Mahmoud Ahmadinejad was a dangerous fanatic whose ideas were framed around a belief in the “Mahdi” and his imminent return.  The Mahdi is the twelfth Imam, the reason we hear the Iranian variant of Shia Islam referred to as “Twelver.”  This theory postulates that Ahmadinejad believed that increased enrichment of uranium could deliver the bomb to the Iranian arsenal by 2007, when Iran would presumably start a war against Israel.  This is an isolated view and the most extreme interpretation of what has been going on inside of Iran; a view not shared by anyone outside of Israel.

As much as Melman’s book offered a great plot for a Ludlum-like thriller, it was severely criticized in the Middle East Policy Council journal that published a review of the book by Gareth Porter.  Porter criticizes the authors for relying too heavily on verbatim Israeli intelligence viewpoints, without critically analyzing them.  He also finds Melman ascribing too much authority to the Iranian president and for equating political campaign rhetoric with actual policy.  Time has proven this view correct as Ahmadinejad has passed from the scene and both rhetoric and actions have changed.

Other odd facts uncomfortably linger:

The Iranian nuclear program was started under the Shah, with support from the United States.

The Ayatollah, Ruholla Khomeini, considered nuclear weapons to be Haram – forbidden under Islamic jurisprudence - and formally proscribed them.

A preexisting, clandestine nuclear program was then shut down.

Iran has publicly and repeatedly renounced weapons of mass destruction and is a signatory to the Nuclear Non Proliferation treaty, The Biological Weapons Convention and the Chemical Weapons Convention.

Iran does not possess nuclear weapons.

Israel is not a signatory to the Nuclear Non Proliferation Treaty or the Chemical Weapons Convention and has never allowed the IAEA to inspect its nuclear facilities at Dimona, in the Negev desert.

Mordecai Vanunu publicly revealed the secret Israel nuclear weapons program in 1986, and the world has known of it since then.
Vanunu's Photograph of Israel Nuclear Equipment

What a framework for peaceful settlement of the dispute over Iran’s nuclear program offers is the opening of a possible détente between the US and Iran, but more importantly the possibility of a détente between Iran and Saudi Arabia.  This would require a great deal of commitment from the US and European allies.  Assuming that the narrow minds of religious extremists will continue to perpetuate a doom-driven status quo demonstrates a lack of imagination and an adherence to the siege mentality of perpetual war. 

Pursuing dialogue and more dialogue, patiently, persistently and rationally, is the only path to peace.

War has become the easy and financially profitable answer to disputes around the world and history has proven that it sits very comfortably within the capitalist system, often serving as a growth engine during recessionary cycles and slumps.  Its social costs are incalculable.

Peace costs much less, but is more difficult to bring about.



Sunday, March 29, 2015

Zeus and Sisyphus

In the Albert Camus version of The Myth of Sisyphus the author has Zeus condemn the truth-telling king to a never-ending cycle of hard work, psychologically justified by the illusion of scaling the heights that he would forever ascend.  For Zeus, the ultimate holder of power, Sisyphus’s truth telling was a deceit and contrary to his interests and therefore the king had to be punished harshly.  There is some irony in this retelling of the Hellenic myth given the locus of today’s latest crisis in global capitalism.

The protracted Greek financial crisis is coming to a critical moment and can be seen in the larger context of a failure of the neoliberal economic project in the EU and its devastating consequences in southern European countries.  How can we make this assessment?  By considering the history of the larger sovereign debt crises and the way critical policy decisions are now being made. The “Troika,” (the IMF, The European Central Bank and the European Commission) has now imposed brutal austerity measures - as a condition of survival - on member countries who followed the EU’s free market dictates during the sovereign debt boom but are now suffering its consequences in a new economic cycle.  Greece is the example being set for any member who is confused about the real aims of the EU financial system.

 In today’s media world of conveniently conflated ideas, we might easily confuse this process for democracy, but in fact the function of these policies is to serve the narrow aims of the neoliberal economic project centered in the US and northern European countries.  This project may or may not exactly fit in with the aims of democracy in various countries, but that is not a serious consideration when capital flows are at stake, as these are the profit centers of banking elites, not working class people. Go ahead, call me a Socialist.  Then give some consideration to these facts.

Lost in this sad story is the history behind the crisis and its connection to the expansion of global capital through leverage and the sale of debt as a vehicle for capital growth, when profits are most easily made by funding the expeditions of elite investors and financial institutions following the guidelines of the IMF, regardless of its effect on the sovereignty of nations.  No matter that a small group of Greek families managed an oligarchic economy in partnership with big banks and no matter that sovereign debt was seen as a good bet by the banks and that billions were made creating it.  Greece and others were following the rules of the game.

Once the financial crisis of 2008 came about, itself a function of neoliberal economic policies that promote moral hazard, this project was no longer profitable for banking elites.  The capital dried up and the remaining accounts deficit and shrinking Greek economy was juxtaposed with rising interest rates, expanding the debt even further.  Exactly how are Greek workers responsible for this?  The machinations of big banks are not easily understood by voters in general and corporate media does nothing to educate voters so that they understand what unelected policy elites are doing behind the scenes in the “service” of national aspirations.

The Germans for their part, have done a good job of promoting the concept of Schulden; basically, “your debt, your problem,” as The Economist has pointed out.  This kind of false moralism, placing the blame for economic crises created by big banks and financial institutions, on the shoulders of working people and the poor is part of the central myth underlying the presumed integrity of the current system of financial capital.  Contradictions abound, but are buried beneath the linen tablecloths at the World Economic Forum.  The fact that numerous economists from across the spectrum have pointed out that austerity creates the opposite of economic growth, which is a prerequisite for realistic and sustained debt service, is obscured by the banking interests at play.  This is at the expense of serious core economic reform, human rights and democracy.  Did Keynes ever imagine that “economic discipline” meant cutting off food stamps for the poor, allowing taxpaying citizens to go without heat or lose their homes as a result of moral hazard?  Of firing public sector workers and cutting those remaining workers’ wages?   Of saddling workers with higher taxes, while allowing oligarchs to not pay taxes at all?

Media pundits in the service of financial capital can make various Neo-Keynesian arguments for why the Greeks need to accept responsibility for their runaway debt and failure to implement adequate controls and financial reforms “consistent” with those of countries vastly different from them in culture, geography, natural resources and productive capacity.  Most of these arguments are coherent within the context of global capitalism and IMF policy.  They are also based on a false premise: that Greek workers created the crisis.

What about democracy and sovereignty?

The The SYRIZA Statute  (the link is translatable in Chrome), reads like a modern day International, having reach far beyond the shores of Greece. This extraordinary document of principles might seem out of step to most Americans, but can be understood as a profound expression of universal democratic principles and ideals.  That it emerges from Greece, the birthplace of Pericles and the Golden Age, stands in stark contrast to what the purported norms of modern democracy have become.  That capitalism as-it-actually-exists has subsumed and perverted core principles of democracy, is no longer a secret in southern Europe.
Syriza's Thessaloniki Programme is exciting to read but after doing so and then looking at the brutal economic regime being forced on the Greek people, it makes me shed tears.  It seems to have the social character of what may have existed in Spain before the various Republican factions were crushed by Franco.  It is a call to reason, fairness and justice, but finds no kin in the centers of power in Brussels.


Meanwhile, Germany and the northern EU countries appear unconcerned with the rise of fascism in Greece even though a failure of the Syriza project may bring it to the fore.  Greece is not the only country experiencing this phenomenon and France and Germany should be acutely aware of the danger.  That the EU seems to be backing Syriza into a corner to bring about its failure says something profound about the neoliberal economic system that dominates international relations.  Syriza needs all of the help, sympathy and good will they can get from the rest of the world, but actually existing capitalism almost ensures that media companies will keep that sympathy from developing.

Despite the fact that austerity will shrink the Greek economy further and reduce revenues making it impossible to retire a corruptly landed debt, the Troika will force this great nation into squalor.  Zeus is no mood for mercy.

Perhaps a successful and peaceful exit from the eurozone can be made.  Let us hope. This is painful to watch.

Thursday, March 26, 2015

Neoconservative Nihilism is Alive and Well

Today’s New York Times Op-Ed column by former US Ambassador John Bolton reminds us that neoconservative policy forces are alive and well and pressing hard for more, not less, violent, global conflict.  Specifically, Bolton calls for US bombing of Iran, an illegal and reckless act of war.  And in a remarkable act of selective judgment, Mr. Bolton takes speculation as a form of argument to new heights.

“In theory, comprehensive international sanctions, rigorously enforced and universally adhered to, might have broken the back of Iran’s nuclear program. But the sanctions imposed have not met those criteria. Naturally, Tehran wants to be free of them, but the president’s own director of National Intelligence testified in 2014 that they had not stopped Iran’s progressing its nuclear program. There is now widespread acknowledgment that the rosy 2007 National Intelligence Estimate, which judged that Iran’s weapons program was halted in 2003, was an embarrassment, little more than wishful thinking.”

Yes, but what is the nature of the enrichment program?  Mr. Bolton cites the National Intelligence Estimate 2014 as evidence, but that report, written by James Clapper, explicitly states "we do not know if Iran will eventually decide to build nuclear weapons."  The unsupported presumption by Bolton is that nuclear weapons are being developed, or that their development could be imminent, an assertion for which there is no evidence and which his own sources refute.  While Mr. Bolton relies on speculative articles written in the Guardian, he misuses them and conveniently overlooks a front page article by that same paper, written this February, referring to leaked documents from Israel’s Mossad, which contradict his own speculations.  In order to accept Bolton’s premise, we have to view Iran through the narrow and troublesome lens of demonization, while ignoring other relevant factors, such as Iran’s national aspirations and need to develop as other nations do.  Conveniently overlooked are any rational factors related to Iran’s energy needs. 

We must also ignore existing deterrents, like the fact that Iran is surrounded by fixed and floating US Military bases and installations and would face immediate extinction if it even attempted to deploy nuclear weapons. 

Despite Iran’s oil production capacity, it has virtually no petroleum refining industry and relies utterly on imports for gasoline and diesel fuel.  The import of nuclear medicines for use in advanced diagnostics and the treatment of numerous cancers has been limited due to blistering sanctions and these do not factor into Bolton’s calculus either.  Never mind that tens of thousands of Iranians await cancer treatments.

Once we have overlooked these countervailing factors, it is easier to accept what amounts to blatant fear mongering.

“Even absent palpable proof, like a nuclear test, Iran’s steady progress toward nuclear weapons has long been evident. Now the arms race has begun: Neighboring countries are moving forward, driven by fears that Mr. Obama’s diplomacy is fostering a nuclear Iran. Saudi Arabia, keystone of the oil-producing monarchies, has long been expected to move first. No way would the Sunni Saudis allow the Shiite Persians to outpace them in the quest for dominance within Islam and Middle Eastern geopolitical hegemony. Because of reports of early Saudi funding, analysts have long believed that Saudi Arabia has an option to obtain nuclear weapons from Pakistan, allowing it to become a nuclear-weapons state overnight. Egypt and Turkey, both with imperial legacies and modern aspirations, and similarly distrustful of Tehran, would be right behind.”

This is highly speculative and Mr. Bolton is asking us to commit an illegal act of war on the basis of his unfounded assertions.  It should be noted that Iran is a signatory to the Nuclear Non-Proliferation Treaty.  He presumes to speak on behalf of Egypt and Turkey, while it is clear that those countries can speak for themselves and have made their own views clear to the US and the UN.  The “source” that Bolton uses (“analysts have long believed”) is actually not a source but an article written in the Guardian by its diplomatic editor.  The article itself is speculative and its primary thrust is to call into question the likelihood of Egypt moving forward with a nuclear program, while it discounts the possibility that Turkey will build nukes.  The article then focuses on purported discussions between the Saudis and Pakistan with regard to Pakistan providing ready-made nuclear weapons to Saudi Arabia under certain conditions that might emerge in the future.  The editor then goes on to question whether Pakistan would actually take such a risky step.  Never mind.  This is not important to Bolton who will grasp at straws and twist media reports to justify more illegal military action in the same way he did in the run up to the Iraq war.  

It seems that we need to be reminded of the speculation and trumped up evidence that was used to justify the Iraq war.  Ironically, Bolton’s Op-Ed appears in the same week as a new report by the Physicians for Social Responsibility detailing their comprehensive examination of deaths related to the Iraq war.  The report, using very conservative estimates, places the death toll at 1.3 million, with a more likely figure being two million, figures significantly higher than those used by the US government and mainstream media thus far.

What are the likely consequences of an illegal military attack on Iran?  Bolton doesn’t say.  Recent history should offer a renunciation of such posturing, but as historian Barbara Tuchman and others have demonstrated, history is no antidote to the march of folly.

What is most remarkable about Bolton is that he is a former ambassador and an expert in foreign policy who was given important responsibility as a diplomat.  Diplomacy is often our only alternative to war and those given such responsibility are tasked with using their skills and imagination to engage friend and foe alike in order to secure peace and normalized relations to the greatest extent possible.  Not only does Mr. Bolton exhibit a remarkable lack of imagination, he invites us to be as incurious as he is in pursuing alternatives to war.  The specter of unending war is, on its face, unsustainable and has been proven to increase chaos, instability, violent extremism, massive loss of civilian life and human suffering. 

The beneficiaries of such policies are few and powerful.  Lockheed Martin, Boeing and Raytheon, the largest producers of arms in the world, collectively represent slightly more than 1% of the US $10 Trillion GPD, thanks to US taxpayers. 

While we can rail against the likes of Mr. Bolton, we must also recognize our own complicity in Perpetual War, Inc., whether benign or otherwise.

“One of the most horrible features of war is that all of the war-propaganda, all the screaming and lies and hatred, comes invariably from people who are not fighting.” - George Orwell