September  1, 2018

Crisis: Greenwald & Gomes, Well Educated Poor, Capitalism & Deregulation, Corruption, The Crash


1. Summary
Crisis Files
     A. Selections from September 1, 2018

This is a Nederlog of Saturday, September 1, 2018.

1. Summary

This is a crisis log but it is a bit different from how it was until 2013:

I have been writing about the crisis since September 1, 2008 (in Dutch, but since 2010 in English) and about the enormous dangers of surveillance (by secret services and by many rich commercial entities) since June 10, 2013, and I will continue with it.

On the moment and since more than two years (!!!!) I have problems with the company that is supposed to take care that my site is visible [1] and with my health, but I am still writing a Nederlog every day and I shall continue.

2. Crisis Files

These are five crisis files that are mostly well worth reading:

A. Selections from September 1, 2018:
1. Interview With One of Brazil’s Leading Presidential Candidates, Ciro

2. The Collapse of the Middle Class and the Rise of a New 'Precariat'
3. Capitalism Is Beyond Saving, and America Is Living Proof
4. It’s the Corruption, Stupid
5. Ten Years After the Financial Crash, the Timid Left Should be Full of
The items 1 - 5 are today's selections from the 35 sites that I look at every morning. The indented text under each link is quoted from the link that starts the item. Unindented text is by me:

1. Interview With One of Brazil’s Leading Presidential Candidates, Ciro Gomes

This article is by Glenn Greenwald (who lives in Brazil) on The Intercept. It starts as follows:
Brazil’s October 7 presidential election is rapidly approaching, and perhaps its most remarkable aspect is the utter lack of clarity about the likely outcome. The world’s fifth-most populous country is mired in so many sustained and entrenched crises — economic, political, judicial, cultural, and an endless corruption scandal — that all previous rules for understanding political dynamics seem obsolete. And for that reason, and several others, the dynamic of Brazil’s presidential race has international relevance: it illustrates the chaos and extremism that can ensue when a large sector of the population, for valid reasons, loses all faith in institutions of authority and in the political class.

Mixed into all of those crises is enduring anger, and growing regret, over the 2016 impeachment of the elected center-left President Dilma Rousseff, in favor of a center-right coalition that has proven to be criminally corrupt, led by an installed President Michel Temer. (..) Temer is now, far and away, the most unpopular president in Brazil’s history.
Yes, and while I knew all of that, Greenwald knows a great lot more about Brazil, because he speaks Portuguese and lives there since quite a few years.

Here is more:
Add to all of that the bizarre fact that the clear poll leader — Lula, the country’s former two-term president — is virtually certain to have his candidacy judicially barred due to the fact that he’s currently in prison after a criminal corruption conviction: the result of a judicial process that even many of his critics who believe him to be corrupt regard as a highly flawed and politically motivated trial and appeal. If Lula were to run, it is close to certain that he would win.
I have an addition to this: Meanwhile, Lula has been barred judicially from taking part in the Brazilian elections.

Here is more:
One of the leading contenders for that second spot is the Democratic Labor Party (PDT)’s Ciro Gomes, a mostly left-wing politician who insists, for strategic reasons, on being called “center-left.” Gomes is a remarkable paradox in many ways. For one, he has been at the highest levels of Brazilian politics for decades — as mayor, as governor of Ceará, a large and poor state in the Northeast, a minister in two prior presidential administrations, including Lula’s successful first term — yet has the comportment of, and is widely perceived as being, an outsider and somewhat of a rebel. He is also extremely erudite and well-educated, a professor of Constitutional Law who has studied at Harvard, yet styles himself as a plain-talking “man of the people” who has become notorious among Brazil’s conservative media for his “unpresidential” behavior and temperament.
Two precisifations.

First, of the several presidential candidates that Greenwald mentioned (read the article if you want to see them), Gomes is the only one who is not a rightist or a fascist. And I also admit I never heard of him.

And second, the second place in the elections for president is quite important, because the presidential elections in Brazil is a two-stage process, that seems similar to France: First the first two are selected; then there is a choide out of these two.
Whatever else one might think of him, Gomes is a very astute and insightful thinker, and his answers offer insight not only into the Brazilian election but the challenges of liberalism and democracy generally throughout the western world:
This is the end of Greenwald's article in so far as the text is concerned. In fact, it continues with an edited interview with Gomes, that is also subtitled (in English). This is a recommended article.

2. The Collapse of the Middle Class and the Rise of a New 'Precariat'

This article is by Robert Scheer on Truthdig. It starts as follows:
The numbers speak for themselves. Since the Great Recession, which saw unemployment explode and millions of Americans lose their homes to foreclosure, the net worth of the top 10 percent is up 26.6 percent and down for American families, just over 30 percent. During that time, the 1 percent’s control of overall wealth has climbed precipitously. As Alissa Quart writes in her new book, “Squeezed,” the result has been the formation of an entirely new class—a group she has dubbed “the middle precariat.”
Yes indeed. Also, as far as Alissa Quart is concerned, I do not doubt that Scheer likes her book, which I haven't read, but she is not quoted in what follows simply because she doesn't say anything interesting in this interview, whereas Scheer does.

Here is more:
Robert Scheer: Hi, I’m Robert Scheer, and this is another edition of Scheer Intelligence. My guest today is Alissa Quart, who’s written a really important book called Squeezed: The High Price of the American Family. And I just have – Let me just be presumptuous and sort of give an overall thesis, the way I read the book. You’re basically saying that the DeToqueville dream of an ever-expanding middle class of opportunity and stakeholders, that was sort of the basic assumption of the American republic and democracy, is really over. And we have a new class, the precariat–I don’t know if you coined the term or it’s been around before–of people who think they’re in the middle class, and they have the education, very often, and the skill set that used  to be associated with a rising income and opportunity, and they find themselves in this incredibly precarious position of living paycheck to paycheck, and depressed, and having children is a disaster because you have to pay for child care and you can’t afford it.
The summary of Quart's book is quite interesting, and it requires several comments.

First, De Tocqueville. I have read - at least three decades ago, I admit - the two volumes of his Democracy in America, and I was quite impressed, both by the style and also by the accuracy and farsightedness of many of his expectations. Also, I can recommend it to everyone interested in the social sciences or in the USA.

Then again, I do not recall "
the De Toqueville dream of an ever-expanding middle class of opportunity and stakeholders". I may be mistaken, and De Tocqueville was for the middle class, but the attributed dream of his requires more than economical changes, namely political changes, and legal changes to bind and guide some of the economical changes.

Second, the precariat. I don't like the term, for one thing, but that may be purely personal and is not important. Then again, I also do not like the term because it will need explanations, whereas there is a perfectly adequate term for them: Well Educated Poor (WEPs if you must insist on abbreviations).

But yes, the rest is quite true, and here is more:
RS: Yeah. But let’s talk about this notion of class. Because you know, the whole assumption of a middle class has always been a confusing one; is it aspirational, does it mean opportunity, the meritocracy gets involved with that. And what you’re really talking about here are people who did work hard, and they played by the rules, and what happened was that they got degrees in subjects that should be important [but were not - MM], or got jobs that just don’t pay enough to live on. Meritocracy today doesn’t mean being good in school and having a good skills set; it means servicing and providing skills that Google wants, or some other large corporation. Isn’t that the reality here? The very idea of a meritocracy has broken down.
Yes indeed, and this requires several clarifications.

First, the whole notion of "social class" is very vague. That there are several social classes was argued by Karl Marx and adopted by most socialists and all communists, and an important reason for them to do so was their idea that the proletarians of all countries (say, the poor) would feel a strong solidarity with each other, that would strongly outrank their positive feelings for their exploiters (say, the rich) and their nationalistic feelings.

You may think this is a plausible thesis, but I think it was massively falsified by the First World War, where millions upon millions of the poor of one country were slaughtered by the poor of other countries, and conversely.

If you want more of this, you should read "The Irrational in Politics" by Chris Palis, a prominent British neuroscientist and anarchist, which is quite good and strongly recommended.

Second, something similar holds for the notion of "middle class": It is so extremely vague, indeed in considerable part because virtually everyone wants to be part of it, and very many pretend they do, though in fact they are either too poor or too rich.

Third, on meritocracy: I mostly agree with Scheer (i) because I do believe there is a rather small group of persons who are quite talented, and who work hard (and no: they are not the intellectual equivalents of people without high school and and IQ of 80), and (ii) because I agree with Scheer
that those who are now highly evaluated are not those with a wide and extensive knowledge of civilization, culture, the sciences and the arts, but those who are good at programming and willing to work for Google, Facebook, Microsoft and Apple.

There is more below, because I think this is quite important. This is the last bit that I'll quote from this interview
RS: The breakdown, it seems to me, is it goes to this word meritocracy–we no longer think it’s important to educate the population, including the young. We no longer think the arts are important, literature is important, understanding your political system is important. And really, what we have is an extension of this free-market, libertarian model that the merit you’re looking for is merit to be able to work for some very successful cartel or corporation like Google or Apple. And the rest of it, what society needs, is gone.
I quite agree, and I start with quoting the best bit again, because I can date these changes quite precisely: "we no longer think it’s important to educate the population, including the young. We no longer think the arts are important, literature is important, understanding your political system is important."

Yes indeed (except that neither Scheer nor I nor others think so, so "we" is a bit misleading). And I can date these changes quite precisely, at least in Holland:

It started in 1971, when the Dutch minister of education (I believe) Veerman, introduced a law - mostly because he wanted to prevent attempted social revolutions like the French one of 1968 - to effectively give all Dutch universities to the students, and to reorganize the structure of the universities rather like that in Dutch politics:

Every faculty had its council, which had to be voted for every year (like cities); every university had its university council, that also had to be voted every year (like Holland); there was a small government next to the university council that consisted of three men in the "University" of Amsterdam; and in the university the vote of every employee or student - professor, lecturer, academic, secretary, toilet cleaner and student - counted as one.

Also, all these elections were effectively faught by parties, of which there were some 8, of which two or three were student parties. And because there are far more students than employees, the students always had the majority, and in Amsterdam that meant that the student organization the ASVA had the majority, I think from 1971 till 1995.

Now the ASVA was in fact an organization led by the Dutch Communist Party and it also had one dominant end: To make gaining an M.A. degree as easy as possible. That is: They did not say they were against education, science, civilization, literature and art; they just wanted to exclude all difficult parts.

When I arrived from Norway on August 15, 1977 - the greatest mistake I ever made in my life: returning to Holland - I was soon taken apart by some students who had studied there a few years. I said (not wishing to speak of my heroic communist father, grandfather and my own communist education) that Yes, I know Marx, but I like Charles Sanders Peirce better as a philosopher. (Literally.)

They thought a moment; discussed in whispers and then said: Peirce was an American, wasn't he?
Yes. Well, because the Americans are behaving like fascists in Vietnam, and because you like this American, you must be something like a fascist. (Almost literally, in translation.)

I was somewhat flabbergasted because this was the first time ever I had been called "a fascist" (with a communist father knighted for making an exhibition about concentration camps - of which he had survived four, in 3 years and 9 months - and the resistance) and because the argument was utterly and evidently totally fallacious, and in fact simply utterly crazy.

But then, it seems mostly because I created a student party that opposed the all-powerful ASVA and that wanted real and difficult studies instead of unreal diploma-mills (my party got all of 5% of the votes), I have been called "a fascist", "a dirty fascist" and "a terrorist" (in 1988) for the next 11 years when I entered the "University" of Amsterdam (where I did not study a number of these years because my ex and I both had and have ME/CFS since 1979), and indeed was removed from the faculty of philosophy in 1988 and denied the right to take an excellent M.A. in philosophy because I had had the temerity of publicly criticizing my utterly incompetent and extremely lazy "teachers" of philosophy.

Also, by 1984 the average IQ of all students was at least 40 points lower than mine (115), which probably explains why my ex (IQ 142) and I did get good and excellent M.A.s in the faculty of psychology, without ever following lectures. By now, it is probably 105, whereas the universities in Holland - that reverted in 1995 to their old extremely authoritarian structure - are 20 to 50 or more times as expensive as they were.

Anyway... there is much more to say, but this is not the place for it, and this is a strongly recommended article.

3. Capitalism Is Beyond Saving, and America Is Living Proof

This article is by Jacob Bacharach on Truthdig. It starts as follows:

Policies that fail in the same way over and over are not failing. Someone is lying
about their intent. The drug war didn’t fail to stem the flow of banned narcotics and to stop epidemic abuse and addiction; it succeeded at building a vast carceral and surveillance apparatus targeted at people of color as a successor to Jim Crow.

The war in Iraq didn’t fail to bring democracy to the Middle East; it smashed an intransigent sometimes-ally in the region, and deliberately weakened and destabilized a group of countries whose control of, and access to, immense oil reserves was of strategic American interest.

The “end of welfare as we know it” didn’t fail to instill in the nation’s poor a middle-class sense of responsibility; it entrenched a draconian regime of means-testing and a Kafkaesque bureaucracy for access to even meager social benefits for a rapidly shrinking middle class.

It’s not that “Capitalism isn’t working,” as Noah Smith recently argued in Bloomberg. It’s that it’s working all too well.

I mostly quite agree, but I have a remark on capitalism: If "capitalism" is defined in economic terms, like so

Capitalism: Society in which the economy is based on the private initiative of individual entrepreneurs or limited companies, and where the prices of goods are determined by the forces of the - supposedly free - market.

then Bacharach is quite right. But a society does not reduce itself to its economy (except in fairly primitive Marxism), because there always also are laws and politics, and more, of which especially the two named ones may have strong influences on how economical capitalism can and cannot be run.

Then again, one of the things Bacharach may have in mind was discussed in my Crisis: It's the deregulation, stupid! and that is that mostly corrupt politicians have diminished the influence of reasonable laws, and indeed often of laws, by the process of deregulation, which in effect means that the rich get the powers the government once had.

Here is more - and these are consequences of deregulations since Reagan was president:

Real wage growth has been nonexistent in the United States for more than 30 years. But as America enters the 10th year of the recovery—and the longest bull market in modern history—there are nervous murmurs, even among capitalism’s most reliable defenders, that some of its most basic mechanisms might be broken. The gains of the recovery have accrued absurdly, extravagantly to a tiny sliver of the world’s superrich. A small portion of that has trickled down to the professional classes—the lawyers and money managers, art buyers and decorators, consultants and “starchitects”—who work for them. For the declining middle and the growing bottom: nothing.

Quite so. Here is more:

Capitalism isn’t broken; it’s working precisely as it’s supposed to: generating surpluses and giving all of them to a small ownership class. The New Deal and postwar prosperity, which barely lasted until 1980, represent historic outliers—the one significant period in which growth at the top was somewhat constrained and a relatively large share of wealth went to the middle. It was possible only through massive government intervention and redistribution, combined with a powerful labor sector backed by that same federal government. It took the collective power of entire societies to briefly restrain capitalism, which, left to its own devices, will do what it has always done: make the already very rich infinitely richer. Capitalism is “working” just fine.

Yes, again - and to put the following in my terms: Prosperity in the West including the USA "was possible only through massive government intervention and redistribution, combined with a powerful labor sector backed by that same federal government" i.e. was done by massive government legal regulations plus protected labor unions.

Here is the last bit that I quote from this article:

In America today, supposedly the most prosperous society ever to exist on earth, nearly a third of families report experiencing economic hardship. Sixty percent—60 percent!—say they could not cover an unexpected expense of $1,000, and nearly 40 percent have less than $500 in savings. People with good insurance get billed $100,000 for having a heart attack. People commute four hours a day because they can’t afford to live in the cities where they work.

The barbarians aren’t at the gates. They’re already here in the boardrooms; they’ve been here all along.

Quite so, although I should add that they are protected and promoted and voted for by the vast majority of American politicians. This is a strongly recommended article.

4. It’s the Corruption, Stupid

This article is by Bob Burnett on Common Dreams. It starts as follows:
As we head for the November 6th midterm elections, it's worth remembering that Donald Trump was elected President because he promised to "drain the swamp." Instead of doing that, Trump has unleashed a tidal wave of corruption. Over the next two months, Republican corruption is the key topic Democrats must talk about.
Well... with Hillary and Bill Clinton as extremely corrupt persons ("earning" over $100 million after Bill's presidency), and - who knows - with Hillary Clinton as (again) Democratic presidential candidate?!

You must be joking - and besides, I don't think it will happen, simply because the Democrats may be a little less corrupt than the Republicans, they are quite corrupt, and none of the corrupt ones, of either party, wants to see his or her corruption discussed in public.

Here is the last bit that I quote from this article:
The most recent USA Today/ Suffolk University poll asked: "During the 2016 campaign, Donald Trump promised to 'drain the swamp'—to reduce corruption in Washington. Which comes closer to your view?"  57 percent of poll respondents said, "The swamp has gotten worse during the Trump Administration."

A recent Pew Research poll found, "about half of Americans (54%) say they trust what Trump says less than they trusted what previous presidents said while in office." (In the latest Washington Post/ABC News poll, 60 percent of respondents disapproved of Trump's job performance.)

As a consequence of Trump's diminished credibility, voters have begun to label Republicans as the Party of corruption.
Nah. They could almost just as well call the Democrats the Party of corruption, especially because the Democrats, unlike the Republicans, pretend to be there (among other things) to protect the interests of the poor and the middle class.

5. Ten Years After the Financial Crash, the Timid Left Should be Full of Regrets

This article is by Larry Elliott on Common Dreams and originally on The Guardian. It starts as follows:

Placards are being prepared. Photo-opportunities are being organised. A list of demands is being drawn up by a coalition of pressure groups, unions and NGOs. Yes, preparations are well under way for protests to mark next month’s 10th anniversary of the collapse of Lehman Brothers – the pivotal moment in the global financial crisis.

Make no mistake, the fact that events will take place in all the world’s financial centres is no cause for celebration. On the contrary, it is a sign of failure. The banks were never broken up. Plans for a financial transactions tax are gathering dust. Politicians toyed with the idea of a green new deal and then promptly forgot about it. There never was a huge swing of the pendulum away from the prevailing orthodoxy, just a brief nudge that was quickly reversed. The brutal fact is that the left had its chance, and it blew it.

Well... yes and no. I mostly agree, but my question is: Did "the left" really have its chance, or did this just appear so, but did not work out (at all) simply because most of the Democrats are corrupt? In any case, they mostly voted as if they were, that is, for the banks and against the non-rich, and this is also why almost nothing changed in a positive (leftist) way, and why none of Wall Street's criminals had any problem with the police or with justice.

Here is more:

Ten years on, international finance is as powerful as it ever was. There has been only cosmetic reform of the banking industry. Corporate power is ever more concentrated. The benefits of the weakest global recovery from recession in living memory have been captured by a tiny minority. Wages and living standards for the majority in developed countries have grown only modestly, if at all.

September 2008 was a near-death experience for global capitalism. At one point there were fears for the entire western banking system; when the recession was at its worst, industrial production was collapsing more quickly than it had in the early stages of the Great Depression. It was that bad. The moment was ripe for politicians brave enough to state the obvious: that the crisis was the result of removing all the shackles on global financial capitalism put in place for good reason in the 1930s. But social democratic parties failed miserably to come up with a progressive response to the crisis that would have involved redressing the imbalance between capital and labour.
Yes, with the qualification that the social democratic parties (Elliott is British and writes for a British daily) may have failed miserably because they were stimulated financially to do so (in secret). Which is corruption.

Now, I do not know what percentage of the American Democrats, or the Dutch social democrats, or the German social democrats is corrupted, may be corrupted, or has been corrupted, and I do not know because all these things are kept secret. I do know that corruption is a fine explanation for the fundamentally quite strange fact that the "
social democratic parties failed miserably to come up with a progressive response to the crisis".
The contrast between Franklin Roosevelt in the 1930s and Barack Obama is telling. Both men arrived in the White House in desperate times. Both had a mandate for change. Roosevelt thought reform was necessary to save capitalism from itself. It was this intellectual framework that resulted in the Glass-Steagall Act to separate banks’ investment and retail operations; public works schemes for the unemployed; and laws to make it easier for trade unions to organise. Obama, like most of his fellow centre-left politicians 10 years ago, was a technocrat who broadly accepted the status quo and never seriously contemplated taking on finance. Wall Street detested Roosevelt. It found Obama much more amenable.
Yes, this is true, although I believe Eric Holder, one of Obama's key men, was corrupt, and should have appeared himself in court for refusing to prosecute large criminals on Wall Street.

Here is the last bit that I quote from this article:
The left remains divided between those who think – as Bill Clinton and Tony Blair did – that the only choice was to work with the grain of global capitalism; those who think, as Roosevelt did, that a more root-and-branch approach is needed; and those who think capitalism is so rotten it is beyond saving.
Well... Clinton and Blair apparently both had it as their personal end in life to become quite rich, and they succeeded very well. Both are strong supporters of capitalism, and indeed also of deregulated capitalism. Roosevelt was a liberal and meant well, but it is true that one of his major ends was to save capitalism by various legal, economic and political means.

Finally, there is another position, and I do not know whether it is shared by many leftists:
Undoing most of the deregulations that were made by Reagan, Clinton, Bush Jr, Obama and Trump.

There are nearly all legal changes. I think they are quite possible, but I have no idea of probable they are, and I fear they are rather improbable. Anyway... this is a recommended article.

[1] I have now been saying since the end of 2015 that is systematically ruining my site by NOT updating it within a few seconds, as it did between 1996 and 2015, but by updating it between two to seven days later, that is, if I am lucky.

They have claimed that my site was wrongly named in html: A lie. They have claimed that my operating system was out of date: A lie.

And they just don't care for my site, my interests, my values or my ideas. They have behaved now for 2 years as if they are the eagerly willing instruments of the US's secret services, which I will from now on suppose they are (for truth is dead in Holland).

The only two reasons I remain with xs4all is that my site has been there since 1996, and I have no reasons whatsoever to suppose that any other Dutch provider is any better (!!).
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